A bounced cheque, also known as a rubber cheque or a returned cheque, is a cheque that cannot be processed by the bank due to insufficient funds in the account of the person who issued the cheque.
When a cheque is presented to a bank for payment, the bank first verifies if there are enough funds available in the account to cover the amount mentioned on the cheque. If there are insufficient funds, the bank will return the cheque unpaid, and it is considered bounced.
Bouncing a cheque is a serious offense and can have legal consequences. It is considered a form of fraud or deceit, as it intentionally promises to pay when the funds are not available. The consequences of bouncing a cheque can include penalties, fees, and legal action, depending on the jurisdiction and the circumstances.
The consequences for the person who issued the bounced cheque can include damage to their credit score and reputation. The person or business trying to receive payment through a cheque may need to pursue legal action or alternative means to recover the owed amount.
It is important to ensure that there are sufficient funds in the bank account before issuing a cheque, to avoid the embarrassment and legal ramifications associated with a bounced cheque.
Explain bounced cheque
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