Most cheques that come back unpaid are not short of money. They are returned because of something on the cheque itself: words and figures that disagree, an overwritten date, a signature that does not match, a damaged code line. Banks return these cheques because they cannot be sure what the drawer meant, and in image-based clearing they will not guess.
Below are thirteen mistakes that get cheques rejected or returned, the Indian return reason code where one applies, and how to avoid each one. At the end you will see which of them printing removes completely and which still depend on you.
Returned is not the same as bounced for funds
People say a cheque "bounced" for both kinds of return, but the two are very different. A cheque returned for insufficient funds (code 01 in India) is the one with the most serious legal consequences: in India it can lead to a case under Section 138 of the Negotiable Instruments Act. A cheque returned for a technical reason is a defect in how it was written. It causes delay, return charges and embarrassment. You can usually fix it by issuing a fresh cheque. For the full list of causes on both sides, see why cheques bounce.
| Technical return | Return for insufficient funds | |
|---|---|---|
| Cause | A defect on the cheque | Not enough money in the account |
| Typical fix | Issue a corrected cheque | Fund the account and pay |
| Legal exposure | Usually low once a corrected cheque is issued, though in India a "signature differs" or "account closed" return can still found a Section 138 case | Can be significant, depending on the country |
| Preventable by careful writing or printing | Almost always | No |
The codes quoted below come from the standard list Indian banks use in CTS clearing, which appears on the SBI reason-for-return page. Gulf banks use their own return reasons, but the underlying problems are the same.
The 13 mistakes
1. Amount in words and figures do not match
This is the most common technical return (code 34, "amount in words and figures differs"). It usually starts with a slip such as "Fifteen thousand five hundred" written beside 15,050, or a lakh/million mix-up. Banks will not pick one figure over the other. Write the words first, then check them against the figures. Our amount in words tool shows the correct wording for any figure.
2. Overwriting or corrections
Since 1 December 2010, the RBI has prohibited alterations and corrections on cheques cleared through the Cheque Truncation System. The only exception is the date: banks generally accept a date correction authenticated with your full signature. Change the payee or amount and the cheque will come back (code 85, "alterations on instrument other than date field"). Initialling the change does not help. Gulf banks are just as strict in practice. If you make a mistake, cancel the leaf and start again.
3. Missing, incomplete or impossible date
An undated cheque, a date without a year, or an impossible date such as 31 June will be returned (code 32, "instrument undated / without proper date"). Use the date format your bank expects. Indian CTS cheques have boxed date digits, and some Gulf cheques do too. Write one digit per box.
4. A stale cheque
Presented after its validity period, a cheque is returned as "out of date / stale" (code 31). In India that period is three months from the date on the cheque. Under UAE law a cheque must be presented within six months of its date. Ante-dating a cheque shortens the payee's window without either of you noticing.
5. A post-dated cheque presented early
A post-dated cheque deposited before its date is returned as "instrument post dated" (code 30). This is usually the payee's mistake, but it often comes from a cheque dated in the wrong month or year, such as January cheques written with the old year.
6. Signature mismatch or incomplete signature
Codes 10 to 14 cover a signature that is incomplete, illegible, different from the specimen, missing, or not as per the account mandate. Signatures drift over the years, and a hurried signature on the twentieth cheque of a batch can drift further. On joint and company accounts, a cheque signed by the wrong person or by one signatory where two are required is returned under "not as per mandate". See who can sign a cheque.
7. Leaving out "only" or leaving gaps
A missing "only" after the amount in words, or a gap before the figures, is rarely a return reason in itself. It is an open invitation to alter the cheque, though. "Ten thousand" can become "Ten thousand five hundred" if there is space. Start writing at the left edge, end the words with "only", and draw a line through any remaining space. The amount in words rules cover this in detail.
8. Wrong payee name
On an account payee cheque, the payee name must match the name on the account it is paid into. A cheque made out to "ABC Traders" cannot go into the account of "ABC Trading LLC" without problems. The collecting bank may refuse it, or it may come back from the paying bank. Ask the payee for the exact account title, especially for companies.
9. Damaged MICR band
The MICR band at the bottom of the cheque is read by machines. Staple pins, folds, tears, a signature that dips into the band, or ink and stamps over the characters can make the cheque unreadable. The result is a return such as "image not clear, present again with paper" (code 39), or the cheque is rejected at capture. Keep the bottom strip completely clean.
10. Crossing errors
A cheque crossed to two different banks is returned (code 60). Under CTS, "opening" a crossing is itself an alteration, so the safe fix is a fresh cheque. A crossed cheque cannot be paid in cash at the counter, so crossing a cheque meant for cash withdrawal defeats its purpose. Decide on the crossing before you write, not after.
11. Wrong decimals for KWD, BHD or OMR
The Kuwaiti dinar, Bahraini dinar and Omani rial divide into 1,000 fils or baisa, not 100. A cheque for 250.5 written as "250.50", or words that say "fifty fils" when the figures show .500, give the bank a mismatch. Always write three decimals for these currencies, and make sure the words agree. See writing KWD, BHD and OMR amounts in words.
12. Writing on an old cheque book from a merged bank
When banks merge, the old cheque books stop working after a cut-off date. In India, cheque books of banks merged in 2020 such as Oriental Bank of Commerce, United Bank of India, Andhra Bank and Corporation Bank became invalid from 1 April 2021. Syndicate Bank's lasted until 30 June 2021. Mergers elsewhere, including in the Gulf, usually come with a similar cut-off, so check with your bank. Cheques from old books are returned however carefully they are written. If your cheque book carries a bank name that no longer exists, ask for a new one.
13. Extra writing on the cheque
Notes such as an invoice number across the front, a rubber stamp over the amount box, or anything outside the fields can trigger "instrument contains extraneous matter" (code 38). Put references on the back or on a covering voucher.
What printing fixes, and what it does not
Printing a cheque from software removes the mistakes that come from handwriting. Of the thirteen above:
- Removed by printing: words and figures mismatch (the words are generated from the figures), overwriting, illegible or impossible dates, missing "only" and gaps (ChequeMaster can add "**" before and after the amount and print in uppercase), wrong decimals (set two or three decimal places per currency), text straying into the MICR band (once the layout is aligned), and stray writing on the face.
- Reduced: wrong payee names, because each payee is saved once and reused, and stale or early-presented cheques, because every cheque is recorded with its date and can be searched later.
- Still up to you: the signature, the crossing choice, keeping money in the account, and using a current cheque book.
ChequeMaster prints onto your bank's own cheque leaves with any ordinary laser or inkjet printer. You set the A/C Payee and Bearer text once for each cheque book. See what ChequeMaster does.
A 30-second check before you hand it over
- Date: complete, correct year, inside validity, not earlier than intended.
- Payee: exactly as the account title.
- Words and figures: identical, with "only" and no gaps.
- Crossing: present, and correct for how the payee will bank it.
- Signature: matches the specimen, and the right people have signed.
- Bottom strip: clean, unfolded, no staples.
