industry body PhDCCI has urged Finance Ministry To take measures like compulsorily suspending bank withdrawals for a few days to hold check issuers accountable for their actions in case of check bounce. The Chamber has suggested that the government should enact a law that the dispute between the two parties should be settled through arbitration within 90 days from the date of the check bounce.

In a recent letter to Sanjay Malhotra, Secretary, Department of Financial Services, the PHD Chamber of Commerce and Industry (PHDCCI) said that the industry has taken up the issue of bounced checks.

“As the government India PHDCCI Secretary General Saurabh Sanyal said that while the focus is on ease of doing business to boost the economy, it is very important to consider the issues related to check bounce, which creates mistrust between buyer and seller.

The Chamber also suggested that the bank should pay the bounced check before making any other payment from the check issuer’s account, if possible within the banking system.

For a bounced cheque, the payer is required to initiate litigation, which results in payment being difficult, adding that bounced check litigation is costly for MSMEs as lawyers charge a hefty amount.

Stating that everyone is benefiting from the current law, except possibly the recipient, the PHDCCI said the law, meant to improve ease of doing business, is probably actually reducing it. Therefore, the purpose of the law is not being served.

“The object of the law should be that checks should be treated with the same respect as bankers’ cheques,” the industry body said in the letter.

33 lakhs reportedly. are more than check bounce Cases, blocking the legal system of India.