List of Cheque Return Reasons – Both for Instrument and Image-based Cheque Clearing

 

It is estimated that 10% of the cheques get returned in the clearing cycle. The reasons for cheque return are varied, and bank customers would be interested to know the possible cheque return reasons.

With Cheque Truncation System (CTS) spreading its wings all over the country, new cheque return reasons have been introduced, keeping in view the CTS specialties

The following are the Cheque Return Reasons – Both for Instrument and Image-based Cheque Clearing

To ……….Bank

The enclosed cheque / refund order / pay order /. . . . . is / are returned for the following reason(s)

Code No. Reason for Return

(01-03) Funds

01 Funds insufficient (no funds in the debit bank account, for the cheque amount)

02 Exceeds arrangement (normally applicable to Overdraft accounts, the cheque amount exceeds the Overdraft limit for the debit account)

03 Effects not cleared; present again (cheques in debit account are in clearing cycle, fate is still unknown)

(04-09) Refer to Drawer

04 Refer to drawer

05 Kindly contact drawer / drawee bank and please present again

(10-19) Signature

10 Drawer’s signature incomplete

11 Drawer’s signature illegible

12 Drawer’s signature differs

13 Drawer’s signature required

14 Drawer’s signature not as per mandate

15 Drawer‟s signature to operate account not received

16 Drawer‟s authority to operate account not received

17 Alterations require drawer’s authentication (Under CTS only alteration in date is permitted, in case of any alteration, the cheque will be returned)

(20-29) Stop Payment

20 Payment stopped by drawer

21 Payment stopped by attachment order

22 Payment stopped by court order

23 Withdrawal stopped owing to death of account holder

24 Withdrawal stopped owing to lunacy of account holder

25 Withdrawal stopped owing to insolvency of account holder

(30-49) Instrument

30 Instrument post dated (Eg: Today’s date is 23/04/2013, and the cheque date is after 23/04/2013)

31 Instrument out-dated / stale (Eg: Today’s date is 23/04/2013, and the cheque date is prior to 22/01/2013)

32 Instrument undated / without proper date (Date column on cheque is blank)

33 Instrument mutilated; requires bank’s guarantee

34 Cheque irregularly drawn / amount in words and figures differ

35 Clearing House stamp / date required

36 Wrongly delivered / not drawn on us

37 Present in proper zone

38 Instrument contains extraneous matter

39 Image not clear; present again with paper (Exclusive CTS return reason)

40 Present with document (Exclusive CTS return reason)

41 Item listed twice (presenting bank has presented the same instrument twice, this happens when first the cheque is presented via MICR and the second time via CTS or vice-versa)

42 Paper not received (Exclusive CTS return reason)

50-59 Account

 

50 Account closed

51 Account transferred to another branch

52 No such account (this happens, when the account number is printed, and the account number written by hand illegible)

53 Title of account required

54 Title of account wrong / incomplete

55 Account blocked (situation covered in 21-25)

60-69 Crossing / Endorsement

60 Crossed to two banks

61 Crossing stamp not cancelled

62 Clearing stamp not cancelled

63 Instrument specially crossed to another bank

64 Amount in protective crossing incorrect

65 Amount in protective crossing required / illegible

66 Payee‘s endorsement required

67 Payee‟s endorsement irregular / requires collecting bank’s confirmation

68 Endorsement by mark / thumb impression requires attestation by Magistrate with seal

(70-79) RBI / Government

70 Advice not received

71 Amount / Name differs on advice

72 Drawee bank’s fund with sponsor bank insufficient

73 Payee’s separate discharge to bank required

74 Not payable till 1st proximo

75 Pay order / cheque requires counter signature

76 Required information not legible / correct

(80-99) Miscellaneous

80 Bank’s certificate ambiguous / incomplete / required

81 Draft lost by issuing office; confirmation required from issuing office

82 Bank / Branch blocked

83 Digital Certificate validation failure

84 Other reasons-connectivity failure

85 Alterations on instrument-Other than “Date” filed (Alteration/correction on instruments are prohibited under Cheque Truncation System. Return reason code applicable to instruments presented in CTS)

86 Fake / Forged / Stolen- draft / cheque / cash order / interest warrant / dividend warrant

87 „Payee’s a/c Credited’ – Stamp required

88 Other reasons (Please specify)

92 Bank excluded

Cheque No.(s)….. Amount Rs. . . . . . . . .

Date of return: ………. Signature & Stamp of returning bank …….

Related articles

• CBN reviews bank charges, introduces N200 per leaflet fee for cheques (vanguardngr.com)
• Cash or cheque? (bluedeckshoe.com)
• Banks, customers go slow in adopting new cheque book (thehindu.com)
• City’s courts see a rise in cheque bounce cases (thehindu.com)
• New cheques to be issued for bank account holders in India (expertscolumn.com)
• But ulitmately it’s all about my department (sorabhbajaj.wordpress.com)