Why Did My Cheque Get Rejected? 88+ Return Codes Explained

Vardhaman Raj12/31/2025

120 14 minutes read

Why Did My Cheque Get Rejected 88+ Return Codes Explained

A cheque returned unpaid isn’t just an inconvenience—it’s a rejection slip that can damage your creditworthiness, trigger legal consequences, and create friction in business relationships. But understanding why a cheque bounced is the first step toward preventing it from happening again.

Banks don’t simply say “sorry, we can’t process this.” Instead, they provide specific return codes that explain exactly what went wrong. With over 40 standardized reasons catalogued by the Reserve Bank of India, the system is comprehensive—sometimes frustratingly so.

This guide walks you through every category of cheque return codes, explains what each reason means in plain language, and shows you how to respond appropriately.

What Happens When a Cheque Is Returned?

When you deposit a cheque and the drawee bank (the bank that holds the issuer’s account) can’t honor it, they issue a cheque return memo—an official document that states the exact reason for rejection using a standardized code.

The process is straightforward:

You deposit the cheque for payment
The payee bank sends it to the drawee bank for clearing
The drawee bank refuses to pay and returns it with a code
You receive the cheque back along with a memo explaining the code

The critical distinction is this: some return codes indicate temporary issues that can be resolved by resubmission, while others are permanent, requiring you to contact the issuer for a replacement cheque.

The 9 Official Categories of Cheque Return Codes

Indian banks follow the Uniform Regulations and Rules for Bankers’ Clearing Houses established by the RBI. These codes are organized into nine categories, each with specific numeric ranges:

Category 1: Funds (Codes 01-03)

These are the most common reasons for cheque rejection, all related to insufficient money in the account.

Code 01 – Funds Insufficient
The issuer’s account doesn’t contain enough money to cover the cheque amount. This is the primary reason for cheque bounces in India and the only reason that triggers Section 138 criminal liability under the Negotiable Instruments Act.

When a cheque bounces for insufficient funds, the payee can send a legal notice demanding payment within 15 days. Failure to pay can result in criminal prosecution with penalties of up to twice the cheque amount or imprisonment up to two years.

Code 02 – Exceeds Arrangement
The cheque amount exceeds the overdraft or credit limit that the drawer has arranged with the bank. For example, if your overdraft facility is ₹50,000 but you issue a cheque for ₹75,000, it will be returned with this code.

Code 03 – Effects Not Cleared, Present Again
The issuer’s account has funds, but not yet in cleared form. For instance, if someone deposited a cheque into their account yesterday, that money is still in the clearing process. When presenting a cheque today, the bank may return it if cleared funds aren’t available, though the instruction is to try presenting again.

What to do: Check with the issuer on their expected cash position. Request resubmission once funds clear.

Category 2: Reference to Drawer (Codes 04-05)

These codes mean the bank cannot process the cheque and the issuer needs to be consulted.

Code 04 – Refer to Drawer
The bank’s system flagged an issue but isn’t specifying the exact problem. This is typically used for technical issues not covered by other codes or when the bank needs clarification from the issuer.

Code 05 – Kindly Contact Drawer/Drawee Bank and Please Present Again
Similar to Code 04, this indicates a temporary issue that might be resolved if you resubmit the cheque or contact both the issuer and their bank for clarification.

What to do: Contact the issuer’s bank directly to understand the exact issue before attempting resubmission.

Category 3: Signature Issues (Codes 10-17)

Banks maintain a specimen signature recorded when an account is opened. Any discrepancy triggers rejection. Signature mismatches account for a significant portion of technical cheque rejections.

Code 10 – Drawer’s Signature Incomplete
Part of the signature is missing or only partially visible on the cheque.

Code 11 – Drawer’s Signature Illegible
The signature is so unclear that the bank cannot compare it with the specimen.

Code 12 – Drawer’s Signature Differs
The signature on the cheque doesn’t match the specimen held by the bank. This is the most frequent signature-related rejection.

Code 13 – Drawer’s Signature Required
The cheque is unsigned—the signature field is blank.

Code 14 – Drawer’s Signature Not as Per Mandate
For accounts with multiple signatories or special authorization requirements, the wrong person signed or the required number of signatures is missing.

Code 15 – Drawer’s Signature to Operate Account Not Received
The bank hasn’t received formal authorization for the person whose signature appears on the cheque to operate the account.

Code 16 – Drawer’s Authority to Operate Account Not Received
Formal authorization documentation is missing from the bank’s records.

Code 17 – Alteration Requires Drawer’s Authentication
The cheque contains alterations (corrections, crossing-outs, overwriting), and these changes must be authenticated (signed and dated) by the drawer on the cheque itself.

What to do: Request the issuer to reissue a fresh cheque with a clear signature. Banks will not accept cheques with unsigned alterations.

Category 4: Stop Payment (Codes 20-25)

These codes indicate the drawer has explicitly instructed the bank not to honor the cheque.

Code 20 – Payment Stopped by Drawer
The issuer has directly requested their bank to stop payment on the cheque. This might happen if goods were defective, the recipient was fraudulent, or the payment was made in error.

Code 21 – Payment Stopped by Attachment Order
A court has ordered that the account be attached (frozen) in connection with legal proceedings—typically a civil case or debt recovery.

Code 22 – Payment Stopped by Court Order
A court has issued a specific order preventing payment of the cheque, often in connection with criminal or civil litigation.

Code 23 – Withdrawal Stopped Owing to Death of Account Holder
The cheque drawer has died, and the bank has frozen the account pending legal instructions from the estate.

Code 24 – Withdrawal Stopped Owing to Lunacy of Account Holder
The drawer has been declared mentally unsound under the Indian Penal Code, and a legal guardian is managing the account.

Code 25 – Withdrawal Stopped Owing to Insolvency of Account Holder
The drawer is undergoing insolvency proceedings, and the bank has restricted account access.

What to do: Contact the issuer to understand the reason. If it’s Code 20, request an alternative payment method. For Codes 21-25, legal intervention is necessary—consult an advocate.

Category 5: Instrument Issues (Codes 30-42)

These codes relate to problems with the cheque itself—format, legibility, dating, or physical condition.

Code 30 – Instrument Post Dated
The cheque is dated for a future date and you’ve presented it before that date. Cheques cannot be cashed before the date printed on them. If the date is January 31 and you deposit it on January 20, it will be rejected. Present it again on or after the specified date.

Code 31 – Instrument Out Dated/Stale
The cheque is more than six months old from its issue date and is considered stale. Indian law treats cheques as valid for exactly three months from the date of issue. After that, they must be reissued.

Code 32 – Instrument Undated/Without Proper Date
The date field is blank, illegible, or filled incorrectly (e.g., written as “31-13-2025” for an impossible date).

Code 33 – Instrument Mutilated; Requires Bank’s Guarantee
The cheque is damaged, torn, stained, or otherwise physically compromised, making details unclear. The bank may require a written guarantee from the issuer’s bank before accepting it.

Code 34 – Cheque Irregularly Drawn/Amount in Words and Figures Differs
A critical discrepancy exists between the amount written in words and the amount written in figures. For example, if the cheque shows “Rupees Five Thousand” but the figure shows “50,000,” banks will reject it. The two amounts must match exactly.

Code 35 – Clearing House Stamp/Date Required
The cheque lacks the required clearing house stamp or validation mark.

Code 36 – Wrongly Delivered/Not Drawn on Us
You’ve presented the cheque to the wrong bank. The cheque is drawn on a different bank or branch than where you deposited it.

Code 37 – Present in Proper Zone
The cheque wasn’t presented in the correct geographic zone or clearing region. Each bank branch has a defined clearing area.

Code 38 – Instrument Contains Extraneous Matter
The cheque has unwanted writing, markings, or foreign matter that creates ambiguity.

Code 39 – Image Not Clear, Present Again with Paper
The cheque image captured by the Cheque Truncation System (CTS) is of insufficient quality for processing. Present the original paper cheque.

Code 40 – Present with Document
The cheque must be presented along with supporting documentation (court orders, insurance certificates, etc.).

Code 41 – Item Listed Twice
The same cheque has been presented multiple times in the same batch. You’re attempting to clear a duplicate.

Code 42 – Paper Not Received
The physical cheque paper hasn’t been received by the drawee bank despite the image being processed.

What to do: For most of these, request a fresh cheque from the issuer. For Code 39, try resubmitting with the original paper cheque. For Code 36, deposit at the correct bank.

Category 6: Account Issues (Codes 50-55)

These codes indicate problems with the account from which the cheque is drawn.

Code 50 – Account Closed
The account holder closed their account before the cheque was presented. Any cheques drawn on a closed account are automatically rejected.

Code 51 – Account Transferred to Another Branch
The account has been transferred to a different branch, but the cheque clearing system hasn’t updated the routing information.

Code 52 – No Such Account
The bank has no record of the account number printed on the cheque. Either the account number is incorrect, or the account never existed.

Code 53 – Title of Account Required
The account title (name) is needed for verification and is missing from the bank’s records or doesn’t match the cheque.

Code 54 – Title of Account Wrong/Incomplete
The account holder’s name in the bank’s records doesn’t match the name on the cheque. For example, the account might be in the name “Rajesh Kumar” but the cheque is signed by “R. Kumar.”

Code 55 – Account Blocked
The account has been frozen or blocked, typically due to court orders, regulatory action, or compliance issues.

What to do: Contact the issuer to verify account details and request a fresh cheque from the correct account.

Category 7: Crossing and Endorsement Issues (Codes 60-68)

Cheques can be “crossed”—marked with two parallel lines—to restrict payment. These codes relate to crossing and endorsement problems.

Code 60 – Crossed to Two Banks
A cheque that’s crossed (restricted for deposit only) shows two different banks as intended recipients—a physical impossibility.

Code 61 – Crossing Stamp Not Cancelled
The crossing mark should be cancelled by an authorized person if conditions are met, but this hasn’t happened.

Code 62 – Clearing Stamp Not Cancelled
The clearing house stamp should be cancelled under certain circumstances but hasn’t been.

Code 63 – Instrument Specially Crossed to Another Bank
The cheque is crossed and restricted to a specific bank, but you’ve deposited it in a different bank.

Code 64 – Amount in Protective Crossing Incorrect
The amount mentioned in a protective crossing doesn’t match the cheque amount.

Code 65 – Amount in Protective Crossing Required/Illegible
A protective crossing should show an amount, but it’s missing or illegible.

Code 66 – Payee’s Endorsement Required
The cheque is made out to someone else, and the payee’s signature on the back (endorsement) is needed to transfer ownership.

Code 67 – Payee’s Endorsement Irregular/Requires Collecting Bank’s Confirmation
The payee’s endorsement on the cheque is unclear or doesn’t match the payee’s name.

Code 68 – Endorsement by Mark/Thumb Impression Requires Attestation by Magistrate with Seal
If the payee used a thumbprint or mark instead of a signature (due to illiteracy), a magistrate must attest to it with an official seal.

What to do: Ensure all crossing and endorsement requirements are met. Request a fresh cheque if necessary.

Category 8: RBI and Government Issues (Codes 70-76)

These relate to regulatory requirements or issues between banks.

Code 70 – Advice Not Received
The bank hasn’t received the necessary advice or authorization from the RBI or another authority.

Code 71 – Amount/Name Differs on Advice
Information in the advice received from the RBI differs from what’s on the cheque.

Code 72 – Drawee Bank’s Fund with Sponsor Bank Insufficient
An inter-bank settlement issue—the drawee bank doesn’t have sufficient funds in its account with the sponsor bank.

Code 73 – Payee’s Separate Discharge to Bank Required
A separate document from the payee confirming receipt is required before the bank can process it.

Code 74 – Not Payable Till 1st Proximo
The cheque is marked as payable only from the first day of the next month and has been presented early.

Code 75 – Pay Order/Cheque Requires Counter Signature
For high-value instruments, a second signature from an authorized officer is required.

Code 76 – Required Information Not Legible/Correct
Critical information on the cheque (account number, amount, date) is unclear or incorrect.

What to do: Most of these require coordination between banks or with the RBI. Contact the issuer’s bank directly.

Category 9: Miscellaneous and Technical Issues (Codes 80-92)

This catch-all category covers uncommon reasons and technical problems.

Code 80 – Bank’s Certificate Ambiguous/Incomplete/Required
A certificate from the bank is needed but is missing, incomplete, or unclear.

Code 81 – Draft Lost by Issuing Office; Confirmation Required
A bank draft (not a cheque, but similar instrument) was lost, and confirmation is needed before reissuing.

Code 82 – Bank/Branch Blocked
The issuing bank or branch is blocked from clearing operations due to regulatory action or system issues.

Code 83 – Digital Certificate Validation Failure
For electronically transmitted cheques, the digital security certificate failed validation.

Code 84 – Other Reasons – Connectivity Failure
A technical issue—typically a network or system connectivity problem—prevented processing. Resubmit once systems are restored.

Code 85 – Alterations on Instrument (Other Than “Date” Field)
The cheque contains unauthorized alterations, corrections, or overwriting on fields other than the date. These require the drawer’s authentication.

Code 86 – Fake/Forged/Stolen—Draft/Cheque/Cash Order/Interest Warrant/Dividend Warrant
The cheque is counterfeit, forged, or stolen. This is a serious issue with potential criminal implications.

Code 87 – ‘Payee’s A/C Credited’—Stamp Required
A specific stamp or notation indicating the amount has been credited to the payee’s account is required.

Code 88 – Other Reasons (Please Specify)
The bank couldn’t fit the reason into any of the above categories and has provided a custom explanation.

Code 92 – Bank Excluded
A rare code indicating the bank is excluded from clearing operations, typically due to regulatory suspension.

What to do: For Codes 84 and 88, contact the bank for clarity. For Code 86, this signals fraud—consult law enforcement and an advocate immediately.

How Return Codes Map to Legal Consequences

Not all cheque bounces carry the same legal weight. The distinction is critical:

Criminal Liability (Section 138 of Negotiable Instruments Act)

Only bounces due to insufficient funds (Codes 01-03) trigger criminal liability under Section 138. If a cheque bounces for technical reasons like signature mismatch, wrong date, or physical damage, Section 138 does not apply.

When a cheque bounces for insufficient funds, this legal process applies:

Payee sends notice (within 30 days of receiving the bank’s return memo)
Drawer has 15 days to make payment or arrange settlement
If payment isn’t made, the payee can file a criminal complaint with the magistrate
Punishment if convicted: imprisonment up to 2 years, fine up to twice the cheque amount, or both

The offense is bailable and compoundable, meaning the parties can settle the case even after formal charges are filed.

Civil Remedies

For cheques returned due to technical reasons, the payee cannot file a criminal case under Section 138. Instead, they can:

Demand that the issuer reissue a correct cheque
File a civil suit for damages
Recover costs and interest through the civil courts

RBI Regulations on Cheque Returns

The Reserve Bank of India has established standardized procedures to ensure fairness and consistency. Key regulations include:

3-Month Validity Rule
Cheques are valid for exactly three months from the date of issue. A cheque dated January 10 is valid until April 10. After that, it’s stale and will be returned.

Representation Policy
If a cheque is returned, banks automatically attempt to represent it (present it again) up to two times, typically within a few days. This gives issuers a chance to deposit funds before the cheque is finally dishonored.

Return Limits
Banks are instructed to keep their cheque return rate below 10% of total cheques presented. High return rates trigger regulatory scrutiny.

Positive Pay System
To reduce fraud, banks implement a “Positive Pay” system where issuers confirm cheque details before they’re processed.

Cheque Truncation System (CTS)
Modern banks use image-based clearing where cheques are scanned and transmitted electronically. Physical cheques are retained at the issuing branch. This speeds up clearing but requires clear image quality.

What to Do When Your Cheque Is Returned

Step 1: Check the Return Code
The cheque return memo clearly states the code. Cross-reference it above to understand what went wrong.

Step 2: Determine If It’s Permanent or Temporary

Temporary issues (can be resubmitted):

Code 03 (effects not cleared) – resubmit after funds clear
Code 05 (contact drawer) – obtain clarification and resubmit
Code 30 (post-dated) – submit after the specified date
Code 39 (image quality) – resubmit with original paper
Code 84 (connectivity) – retry once systems are restored

Permanent issues (require a new cheque):

Code 01 (insufficient funds) – issuer must deposit funds and reissue
Codes 10-17 (signature issues) – issuer must sign a new cheque
Code 34 (amount mismatch) – issuer must write amounts correctly on a new cheque
Code 50 (account closed) – issuer must issue from an active account

Step 3: Contact the Issuer (If Necessary)
For any permanent issues, inform the issuer immediately. Provide the return code and request a replacement cheque.

Step 4: Follow Up on Legal Action (For Insufficient Funds)
If the cheque bounced for insufficient funds and you believe it was intentional:

Document the date you received the bank’s intimation
Send a formal notice within 30 days (template available from the court or an advocate)
Give the issuer 15 days to pay
If unpaid, file a criminal complaint under Section 138 within 30 days

Frequently Asked Questions

Can a bounced cheque be resubmitted?
Yes, but only if the issue is temporary. If the cheque was post-dated, present it after the date. If funds weren’t available, the issuer can deposit funds and you can resubmit. For technical issues like signature mismatch or amount discrepancy, the issuer must write a fresh cheque.

How many times will a bank retry a bounced cheque?
Banks typically attempt to represent (resubmit) a cheque up to two times over several days. After the second rejection, most banks will not attempt further clearance without explicit instruction.

Can I file a police complaint if a cheque bounces?
You can file a formal complaint under Section 138 of the Negotiable Instruments Act before the magistrate. This is a criminal matter, not a police case. Alternatively, under Section 420 of the IPC, if there’s evidence of cheating or fraud, you can file a police FIR.

What if the cheque bounced but the issuer had sufficient funds?
If the bank made an error, contact the issuer’s bank to investigate. If it was indeed an error, the bank can reauthorize the cheque. Keep documentation of all communications.

Are there penalties for the bank if they wrongly return a cheque?
If a bank wrongly dishonors a cheque (when funds are available), the account holder can sue the bank for damages including compensation for reputational harm and financial loss. This is a civil matter against the bank.

What happens to my credit score if a cheque bounces?
A bounced cheque doesn’t directly appear on your credit report like a loan default. However, if the matter escalates to a judgment against you in court, it can affect your creditworthiness. Additionally, some financial institutions flag customers with repeated cheque bounces.

Can a company be liable if its cheque bounces?
Yes. Under Section 148 of the Negotiable Instruments Act, if a company issues a cheque that bounces for insufficient funds, both the company and the directors responsible for issuing it can face criminal proceedings.

Key Takeaways

Cheque return codes are standardized – The RBI maintains a list of over 40 codes organized into nine categories.
Not all bounces are equal – Only insufficient funds (Codes 01-03) trigger criminal liability under Section 138.
Cheques are valid for three months – After that, they’re stale and will be rejected.
Signature mismatches are common – Many bounces occur because signatures don’t match the specimen held by the bank.
Amount discrepancies matter – If words and figures don’t match, the bank will reject the cheque.
Some bounces are fixable – Temporary issues like post-dating or image quality can be resolved by resubmission.
Legal action has timelines – A notice must be sent within 30 days, and the drawer has 15 days to respond.
Prevention is the best medicine – Maintain sufficient funds, verify all details before issuing, and communicate with payees about any delays.

Understanding why your cheque bounced—and what the return code actually means—gives you the clarity to resolve it quickly and, more importantly, prevent it from happening again. Whether it’s a simple signature mismatch or a serious insufficient funds issue, knowing the exact reason puts you in control of the next steps.

Disclaimer: This article provides general information about cheque return codes and Indian banking regulations. It is not legal advice. For specific legal concerns regarding cheque bounces, insufficient funds, or criminal proceedings under Section 138, consult a qualified advocate who can review your individual circumstances and provide professional guidance tailored to your situation.