Return promptly, then preserve an auditable reason
For commercial banks within the scope of RBI’s Responsible Business Conduct Directions, paragraph 144 requires dishonoured instruments to be returned or dispatched to the customer promptly and, in any event, within 24 hours. A cheque presented directly to the paying bank for transfer between two accounts in that bank is subject to the immediate-return requirement in paragraph 145. Paragraph 146 requires the paying bank’s return memo or objection slip to carry the reason code and the prescribed official signature or initial. The consolidated Directions supply these controls.
This article is checked on 25 October 2026 against RBI’s version updated on 1 October 2026. It concerns bank operations, customer evidence and management reporting. It does not calculate Negotiable Instruments Act prosecution/notice deadlines, decide civil liability or promise a fixed compensation amount for every delayed return. RBI’s text distinguishes return/dispatch from eventual courier delivery; retain evidence of both.
Keep the timestamp trail separate from the money trail
Capture the dishonour event, receipt of the return information by the relevant unit, instrument handling, customer communication and actual return or dispatch. Identify the responsible bank and operational facts before alleging a breach. A courier label generated in advance does not necessarily prove dispatch. Equally, a courier taking longer to deliver does not alone prove that dispatch occurred outside 24 hours.
The general text in paragraph 144 says 24 hours; this article does not insert a blanket “working hours” or holiday exclusion into it. Immediate same-bank return should not be turned into permission to hold a directly presented cheque until the next day. The worked timing cases assume agreed timestamps in the same time zone and no factual dispute over when the return obligation arose.
Read the reason code, not just a charge description
An account entry called “cheque return charges” does not explain the underlying dishonour. Obtain the return memo, instrument reference, reason code and relevant official authentication. Match the code to the transaction and investigate a mismatch or unclear notation. Keep the actual message and document history when the bank later corrects a code.
Paragraphs 147–149 require a transparent, fairly implemented policy approved by the Board or its Committee. It should address misuse while avoiding penalising unintended dishonours, and include preventive controls against collusion or deliberate delay in informing the payee. It also covers frequent dishonours below ₹1 crore and ECS/NACH mandates. These provisions should not be presented as one universal return-charge tariff or a fixed number of dishonours after which every account must be closed.
Apply the two MIS populations independently
Paragraph 150 requires data on each dishonoured cheque of ₹1 crore or above to form part of the bank’s MIS on constituents, with branch reporting to the controlling office or Head Office. The threshold is tested per instrument. Several smaller cheques do not become one ₹1-crore cheque through addition.
Paragraph 151 separately covers cheques drawn in favour of stock exchanges and dishonoured, irrespective of their value, for the bank’s broker-entity MIS and Head/Central Office reporting. A cheque can be in both populations. Tag both categories, but de-duplicate any overall total of unique instruments. Paragraph 152 calls for quarterly consolidated data before the Audit/Management Committee. Reporting is not itself an adjudication that a customer committed fraud.
Build an evidence request that the bank can answer
A useful customer or internal-audit request identifies the cheque, amount, deposit/direct-presentation details, return event, memo and desired missing evidence. Ask for the actual dispatch or handover record and the applicable policy where timing or treatment is disputed. Paragraph 153 requires full cooperation and documentary proof of dishonour for the complainant’s proceedings before the specified forums and competent authorities. Preserve that proof without assuming it establishes every other ingredient of a separate legal claim.
A bank control review should sample high-value returns, stock-exchange payees, repeated smaller returns and same-bank direct presentations. Reconcile source-system return records to both reports and the quarter’s committee material. Missing records, duplicate counts, wrong payee tagging and unproved dispatch timestamps deserve separate findings; collapsing all of them into one “bounce” total hides the operational cause.
Six worked illustrations
All facts and amounts below are fictional. Assumptions describe the model, not additional statutory rules.
Illustrative example 1: Dispatch within the outer interval
Assume the return obligation arises at 10:00 on 5 October 2026 and the instrument is actually dispatched at 09:30 on 6 October. Elapsed time is 23 hours 30 minutes, leaving 30 minutes before the 24-hour outer interval. This checks that outer interval only; “promptly” and the actual circumstances still matter.
Illustrative example 2: Dispatch exceeds 24 hours
Using the same 10:00 start, dispatch at 11:15 the following day takes 25 hours 15 minutes. That exceeds 24 hours by one hour 15 minutes. A customer SMS sent at 16:00 on the first day is useful communication evidence but is not, by itself, proof that the instrument was returned or dispatched then.
Illustrative example 3: Direct presentation within the same bank
A cheque for transfer between two accounts in the paying bank is directly presented and dishonoured at 12:00. The bank hands it back at 14:00, two hours later. Paragraph 145 requires immediate return on these facts. The reviewer cannot certify compliance simply because two hours is below the general 24-hour interval; there is no numerical safe harbour for “immediately” in this illustration.
Illustrative example 4: Per-cheque ₹1-crore boundary
Three dishonoured cheques are ₹99,99,999, ₹1,00,00,000 and ₹1,25,00,000. Paragraph 150’s high-value population includes the latter two: count 2 and aggregate ₹2,25,00,000. The first is ₹1 below the boundary. It may still require other monitoring; absence from this one population is not exemption from all policy controls.
Illustrative example 5: Small stock-exchange cheques
Three dishonoured cheques drawn in favour of stock exchanges are ₹20,000, ₹50,000 and ₹1,00,000. Paragraph 151 captures all three, totalling ₹1,70,000, despite each being below ₹1 crore. A filter selecting only high-value instruments would omit this entire population.
Illustrative example 6: Overlap without duplicate overall totals
A quarter contains four unique dishonoured cheques: A, ₹1,20,00,000 to an ordinary supplier; B, ₹1,10,00,000 to a stock exchange; C, ₹40,000 to a stock exchange; and D, ₹60,000 to a stock exchange. High-value reporting contains A and B: 2 instruments. Stock-exchange reporting contains B, C and D: 3. The combined category count is 5, but unique instruments number 4 because B overlaps. Unique value is ₹2,31,00,000; adding the two population values would incorrectly give ₹3,41,00,000.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Confirm the regulated-bank scope | Identify the bank and applicable current Directions before applying commercial-bank instructions. |
| 2 | Identify the presentation route | Distinguish normal collection from direct same-bank transfer presentation. |
| 3 | Capture the return event | Retain the source-system event and agreed responsibility/timestamp facts. |
| 4 | Obtain the return memo | Match instrument reference, amount, payee and reason code. |
| 5 | Check official authentication | Verify the prescribed signature/initial and investigate incomplete evidence. |
| 6 | Verify return or dispatch | Use handover or dispatch proof rather than merely a generated label or notification. |
| 7 | Read the approved policy | Review fair treatment, repeat dishonours, communication and preventive controls. |
| 8 | Test high-value reporting | Select each cheque at ₹1 crore or above and reconcile branch/head-office reporting. |
| 9 | Test stock-exchange reporting | Capture dishonoured stock-exchange-payee cheques irrespective of value and reconcile overlaps. |
| 10 | Close the quarterly evidence | Match committee reporting, exception actions, customer proof requests and corrected records. |
Sixteen practitioner FAQs
1. Does the 24-hour rule mean delivery to the customer must always finish in 24 hours?
The text concerns return or dispatch. Keep actual dispatch and delivery evidence distinct.
2. Can a pre-generated courier label prove timely dispatch?
Not by itself. Retain evidence that the instrument was actually handed over or sent.
3. Is a customer SMS the same as returning the cheque?
No. Communication and physical/documentary return evidence answer different questions.
4. Can the general 24 hours automatically be read as working hours?
This article does not add that qualification to paragraph 144. Examine the actual applicable instruction and facts.
5. What changes for a direct same-bank transfer presentation?
Paragraph 145 requires immediate return of the dishonoured cheque to the payee/holder; the general outer interval is not a waiting allowance.
6. What should appear on a return memo?
The reason code and prescribed official signature or initial, with enough matching information to identify the instrument.
7. Does every return code imply insufficient funds?
No. Read the actual code and underlying record rather than inferring a cause from a generic ledger description.
8. Does RBI prescribe one charge for every dishonour in these paragraphs?
No universal tariff is established by the provisions discussed. Review the applicable policy and the actual basis of the charge.
9. Must a bank close every account after the same fixed number of returns?
These paragraphs leave the response policy to the bank subject to the stated governance and fair-treatment controls; they do not supply that universal numerical rule.
10. Is exactly ₹1 crore inside high-value MIS?
Yes. Paragraph 150 covers ₹1 crore and above.
11. Can several smaller cheques be combined to satisfy that instrument threshold?
No. Test the amount of each dishonoured cheque for that population.
12. Are sub-₹1-crore returns outside every monitoring requirement?
No. The policy also addresses frequent smaller dishonours and the separate stock-exchange population has no such minimum.
13. Why identify stock-exchange payees separately?
Paragraph 151 requires their dishonoured cheques to be consolidated irrespective of value for the specified broker-entity reporting.
14. Can an instrument belong to both MIS populations?
Yes. Preserve both category flags and remove overlap only when calculating overall unique totals.
15. How often is consolidated data placed before the committee?
Paragraph 152 specifies quarterly placement before the Audit/Management Committee for the covered matters.
16. Does documentary proof of dishonour guarantee success in litigation?
No. Paragraph 153 supports obtaining proof; a separate claim or prosecution has additional facts, legal requirements and deadlines.
Conclusion
Review dishonoured-cheque handling through timestamps, authenticated return memos and two distinct RBI MIS populations. Separate dispatch evidence from delivery and reporting from liability.