Kathmandu, July 1:  In Kathmandu, cases of cheque bounce—or “cheque dishonour”—are rapidly increasing, highlighting a growing trend of financial misconduct.

A recent incident involved a woman originally from Madhes Province, currently residing in Tripureshwar, Kathmandu, who issued a cheque of Rs 1.5 million to a man, dated Falgun 19, 2081 BS, from Prime Commercial Bank. When the recipient attempted to cash it, the cheque bounced due to insufficient funds. After three failed attempts, the man filed a complaint with the District Police Office in Bhadra Kali. The District Government Attorney's Office later registered a banking offence case against the woman at the Kathmandu District Court.

Prosecutors have demanded the recovery of Rs 1.5 million, interest from the cheque issuance date, a 5% penalty, and imprisonment. Compensation to the victim under the Crime Victim Protection Act has also been sought.

In another case, a man from Belauri in Sudurpaschim Province issued a cheque worth Rs 900,000 to a known acquaintance for payment via Agriculture Development Bank. The cheque, dated Kartik 11, 2081 BS, also bounced due to lack of funds. A police complaint led to formal charges being filed.

These are just a few representative examples. Such incidents are rising sharply as individuals issue cheques without ensuring sufficient account balances. As a result, Kathmandu District Court receives banking offence filings almost daily.

In the first 15 days of Asar alone, 202 cases were registered at the Kathmandu District Court, reflecting the seriousness of the issue. Court official Tirtha Raj Bhattarai confirmed a sharp increase in such cases, with over 10,000 cheque-related offences currently pending in the court.

Due to frequent absconding by the accused, hearings are delayed. For instance, in cooperative fraud cases involving hundreds of complainants, collecting statements and completing legal procedures takes time—especially when some defendants remain at large.

As of now, there are 26,000 active cases in the Kathmandu District Court. The target is to reduce them to 24,000 by the end of Asar, though over 2,000 cases are already older than two years.

Even serving court summons is difficult in cheque dishonour cases, as locating the accused often proves challenging. Previously, such cases were handled only by the Patan High Court. However, since last year, jurisdiction has expanded, allowing all district courts to register cheque-related banking offence cases.

What Does the Law Say?

According to Section 3 of the Banking Offences and Punishment Act, 2064 BS, it is illegal to issue a cheque without sufficient funds or to demand payment through such cheques. If a cheque presented for clearance lacks necessary funds, the bank must return it to the bearer.

The law requires the bank to notify the account holder—by any means—within 45 days to deposit the required amount and maintain a record of that notification. If the amount is not covered, the account holder faces interest charges, a 5% penalty on the bounced amount, and jail time. Penalties under the law are as follows: For amounts up to Rs 1.5 million: up to 1 month imprisonment; From Rs 1.5 million to Rs 5 million: 1 to 3 months imprisonment; Rs 5 million to Rs 10 million: 3 months to 1 year; Rs 10 million to Rs 100 million: 1 to 2 years; Over Rs 100 million: 2 to 4 years imprisonment

The growing number of such cases points to the urgent need for financial accountability and stricter enforcement to restore trust in cheque-based transactions.

People’s News Monitoring Service