Despite the increasing popularity of digital payments and electronic transfers like UPI & NEFT/RTGS, issuance of Cheques continue to play a significant role in business transactions in India for several reasons:
- Wide Acceptance: Cheques are widely accepted by businesses and individuals across various sectors, including trade, services, and retail as they offer a simple and convenient method of payment.
- Credit Terms: Many businesses prefer using cheques as they provide a form of credit, allowing the recipient to defer depositing the cheque until a later date. This is quite common in transactions where credit terms are involved.
- Legal Validity: Cheques are legally recognized as most convenient form of negotiable instruments. This gives them a formal status and clear legal framework for enforcement in case of disputes.
- Documentation: Cheques provide appropriate paper trail and documentation of transactions, which can be useful for accounting, auditing, and legal purposes.
- Trust and Tradition: In many business systems, especially among small and medium enterprises (SMEs), there is a trust factor associated with cheques. They are perceived as a secure and reliable method of payment.
Despite their advantages, Cheque Bounce cases remain a prevalent issue due to various factors such as insufficient funds, mismatched signatures, or closure of bank accounts. As digital payment methods continue to evolve and gain acceptance, it will be interesting to observe how their adoption impacts the prevalence and dynamics of cheque usage in business transactions over time.
From
M.K.SETHI, Advocate
Cheque Bounce Case Recovery Expert
