‘Cheque Bounce’ Fraud Cases On The Rise

August 5, 2021 | Investopaper

Lately, the fraud related to cheque bounce has increased in Nepal. This has led to an increase in overall banking malpractice. A total of 9,721 banking offenses have been committed in the last five fiscal years. Meanwhile, police have arrested 3,964 accused. Foreign nationals have also been arrested in which 51 men are involved. Similarly, 3,481 Nepali men were arrested for the crime while 51 were women.

The increase in the number of people bouncing checks without money in their bank accounts has increased the crime of banking malpractice. At the same time, the number has increased in the last three fiscal years, especially due to the proliferation of transactions, fraud, forgery, and even the misuse of online transactions.

There were 93 complaints of banking malpractice in the fiscal year 2073/74 BS. Of these, 73 accused were arrested by the police. The number of such complaints has been steadily increasing in recent years. This number increased to 776 in FY 2074/75. Of these, 315 accused have been arrested. In the fiscal year 2075/76, the number of banking offenders reached 3167. Of these, 2,957 accused were arrested and action was taken against them. Of the 3,309 banking offenders in the fiscal year 2076/77, police have arrested 436. Last year, however, such numbers have declined slightly. It has reached 2,376 out of which only 184 have been arrested.

The Banking Offence and Punishment Act 2073 prohibits unauthorized borrowing or lending, unauthorized account opening or demand for payment, misuse of electronic means or unauthorized payment, misuse of credit, banking resources and property, etc. The act has mentioned that those who act against this provision are banking offenders.

What Does Check Bounce Mean?

The check bounces if there is no cash amount in the bank account as written by the person issuing the check. Returning a check from a bank for payment is a ‘check bounce’. Most of the time, giving such checks intentionally has become a part of the crime.

Also, the check bounces even if the bank account holder differs in the date, number, and manner written on the check. So it is important to pay attention to such things. You have to be very careful while writing the check. If the check bounces, the person who issues the check will be punished according to the prevailing law in Nepal.

Initially, the check bearer can blacklist the issuer of the check by informing the bank within a week of the check bouncing. The person will not be allowed to open a bank account or take a loan until he is on the blacklist. S/he will also be deprived of government services.


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