Cheque Bounce & Debt Recovery Published & Fact-Checked 1 Sept 2026

What is Section 25 of the Payment and Settlement Systems Act (NACH / Auto-Debit Bounce)?

When an electronic ECS / NACH auto-debit for an EMI or loan bounces due to insufficient funds, the lender can initiate criminal prosecution under Section 25 of PSS Act 2007, carrying penalties identical to Section 138 NI Act (imprisonment up to 2 years or fine up to 2x amount).

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