Civil Law

Banking Fraud & Cheque Bounce

The banks are the lifelines of the economy and play a catalytic role in activating and sustaining economic growth, especially, in developing countries and India is no exception. Fraud is defined under section 421 of the Indian Penal Code and Section 17 of the Indian Contract Act. Fraud considered as cheating, concealment, forgery-counterfeiting and breach of trust.

Fraud is a real operational risk for the banking system. The Reserve Bank of India (RBI) has defined 'Fraud' as "A deliberate act of omission or commission by any person, carried out in the course of a banking transaction or in the books of accounts maintained manually or under computer system in banks, resulting into wrongful gain to any person for a temporary period or otherwise, with or without any monetary loss to the bank."

Banking Fraud!

Reserve Bank of India introduced some guidelines for protection of this different geographical areas were situated it is very difficult to check money laundering transactions, to solve this problem reserve bank of India introduced legal entity identifier, it checks and prevents banking fraud in India.

Reserve bank of India has mandated a phase-wise implementation of Legal entity identification for all borrowers of banks in India. Legal Entity Identification is 20 digital global reference number which uniquely identifies foundation is the regulator of legal entity identification.

Cheque Bounce!

A cheque bounce is a criminal offence stipulated under Section- 138 of the Negotiable Instruments Act, 1881. However, in case of a cheque bounce, the aggrieved party can file a criminal as well as a civil suit against the accused.

The responsibility of lawyer is not just to accumulate the relevant information for his client in relation to the cheque bounce case but also manage all the paperwork that allows enough time to focus on his business and other considerations.

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