Waiver of Check Bounce Charges: Letter Templates for Bank and EMI Bouncing Charge Waiver

Cheque bounce charges and EMI bounce charges are penalties imposed by banks or financial institutions when a cheque or an EMI payment fails to clear.

A cheque bounce occurs when a cheque issued by a customer is returned unpaid due to reasons such as insufficient funds, signature mismatches, or technical errors. EMI bounce charges, on the other hand, are levied when an Equated Monthly Instalment (EMI) payment fails due to inadequate funds or other payment-related issues.

These charges are not only financial penalties but can also have legal and credit-related consequences. The financial penalties usually range from Rs. 200 to Rs. 750 per instance, depending on the bank or lender. Repeated instances of cheque or EMI bounces can negatively impact your CIBIL score, making it harder to secure loans in the future. It is crucial to address such issues promptly to maintain a healthy financial profile.

Common reasons for cheque dishonour in India

Here are some common reasons why cheques may be dishonoured in India:

• Insufficient funds in the account: The most common reason for cheque bounces is a lack of adequate balance in the issuer’s account.
• Signature mismatch or technical errors: A cheque may bounce if the signature on the cheque does not match the signature on record with the bank.
• Stopping payment instruction by the issuer: If the cheque issuer has instructed the bank to stop the payment, the cheque will be dishonoured.
• Damaged or expired cheques: A cheque that is torn, damaged, or past its validity period (usually three months) will be rejected by the bank.

Step-by-step guide to request a waiver of cheque bounce charges

Requesting a waiver of cheque bounce charges can be a straightforward process if done correctly. Here is a step-by-step guide to help you:

1. Log in to your bank’s customer portal: Use your registered mobile number and OTP authentication to access your account.
2. Navigate to the waiver request section: Look for the ‘Service Requests’ or ‘Dispute Resolution’ section in the portal.
3. Submit your request: Provide the necessary details, such as account number, cheque details, and the reason for the cheque bounce. Attach supporting documents, if applicable.
4. Contact customer care if needed: If you face any issues or discrepancies, contact your bank’s customer care team for clarification or assistance.
5. Follow up on your request: Banks may take a few days to process your waiver request. Ensure you follow up for updates.

While submitting your request, remember that banks are not obligated to approve waivers, especially if the cheque or EMI bounce was due to negligence.

Letter template: Waiver of cheque bounce charges letter to bank

Below is a sample letter template you can use to request a waiver of cheque bounce charges:

[Your Name]
[Your Address]
[Date]

To,
[Bank Name]
[Branch Address]

Subject: Request for Waiver of Cheque Bounce Charges

Dear [Bank Manager's Name],

I am writing to request a waiver of cheque bounce charges levied on my account [Account Number] on [Date of Bounce]. The cheque was dishonoured due to [briefly explain reason, e.g., technical error, insufficient funds due to unforeseen circumstances].

I kindly request you to review my history as a customer and reconsider the charges. Attached herewith are supporting documents for reference.

Thank you for your time and assistance.

Warm regards,
[Your Name & Contact]

For EMI-related charges, you can use the following template:

[Your Name]
[Your Address]
[Date]

To,
[Lender Name]
[Branch Address]

Subject: Request for Waiver of EMI Bounce Charges

Dear [Manager's Name],

I am writing to request a waiver of EMI bounce charges levied on my loan account [Loan Account Number] on [Date of Bounce]. The payment failed due to [briefly explain reason, e.g., insufficient funds caused by unexpected expenses].

I have since resolved the issue and ensured sufficient funds are available for future payments. I kindly request you to reconsider the charges. Attached herewith are the relevant documents for your reference.

Thank you for your understanding and support.

Warm regards,
[Your Name & Contact]

Does a waiver of bouncing charges affect your CIBIL score?

The waiver of bouncing charges itself does not directly impact your CIBIL score. However, the circumstances leading to the bounce, such as insufficient funds or late payments, can negatively affect your credit history.

When a cheque or EMI payment fails, it is recorded in your credit report. Repeated instances of payment failures signal financial irresponsibility, which can lower your credit score. On the other hand, requesting and receiving a waiver is more about resolving the penalty rather than erasing the record of the bounce.

To maintain a healthy CIBIL score, it is crucial to ensure timely payments. Even if a waiver is granted, the bounce event may still reflect in your credit history, so it is always better to avoid such situations altogether.

Difference between cheque bounce and EMI bounce

Tips to avoid cheque and EMI bouncing in the future

• Maintain adequate balance: Ensure your account has sufficient funds before issuing cheques or EMI due dates.
• Set reminders: Use apps or calendars to set reminders for EMI payments and cheque clearances.
• Track account activity: Regularly monitor your account to avoid unexpected issues.
• Use auto-debit facilities: Authorise auto-debit for EMI payments to reduce the risk of missing due dates.
• Communicate with your lender: If you foresee payment difficulties, inform your lender in advance to explore possible solutions.