In a letter to Secretary in the Department of Financial Services Sanjay Malhotra recently, PHD Chamber of Commerce and Industry (PHDCCI) said the industry has raised issues regarding the bouncing of cheques.
“As the Government of India is focusing on ease of doing business to boost the economy, it is very important to take into consideration the issues related to bouncing of cheques, which creates mistrust between buyer and seller,” said PHDCCI Secretary-General Saurabh Sanyal.
The chamber also suggested that the bank should make payment of bounced cheque first before making any other payment from the account of the cheque issuer, if possible within the banking system.
For bounced cheques, the payee needs to start litigation, which hardly results in the payment, it said, adding that bounce cheque litigation is costly for MSMEs as lawyers charge a hefty sum.
Asserting that everybody is getting benefitted from the current law, except possibly the payee, PHDCCI observed that the law, meant to improve ease of doing business, maybe actually reducing the same. So, the objective of the law is not being met.
“The objective of the law should be that Cheque commands the same respect as a Banker’s Cheque,” the industry body said in the letter.
There are reportedly over 33 lakh cheque bounce cases, clogging India’s legal system.