Bounced Cheque From a Business Customer in Singapore: How to Recover the Money

Short answer: If a business customer’s cheque bounces in Singapore, tell the customer in writing at once, keep the original cheque and the bank’s return document, and demand payment. You can sue on the cheque itself under the Bills of Exchange Act 1949, and these claims often suit summary judgment. A bounced cheque is not a crime by itself.

A bounced cheque in Singapore usually reaches the finance team as an image return document from the bank, with a short reason code and no money. For a supplier owed money by a customer company, that document matters. A dishonoured cheque gives you a claim on the cheque itself, alongside the claim on the unpaid invoice, and the law presumes the cheque was given for value. The end of SGD corporate cheques on 31 December 2026 also makes speed especially important this year.

Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.

What does it mean when a cheque bounces in Singapore?

A cheque bounces when it is dishonoured by non-payment: it was duly presented and payment was refused or could not be obtained. Under section 47 of the Bills of Exchange Act 1949, dishonour gives the holder an immediate right of recourse against the drawer, which is the customer company whose account the cheque is drawn on.

Most cheques in Singapore are cleared by image rather than paper (section 89). If the cheque is dishonoured, your bank issues an image return document (IRD) unless it returns the cheque itself (section 90). The IRD states the return reason. Keep it: presenting the IRD to the drawer is sufficient notice of dishonour in form (section 49(g)).

The first four reasons below appear in return reasons published by Singapore banks; the last arises where the customer stops payment.

What is the legal basis for suing on a bounced cheque?

The drawer of a cheque is liable to the holder if the cheque is dishonoured, provided the steps required on dishonour, mainly notice, are properly taken. This claim on the cheque is separate from your claim on the unpaid invoice.

• Section 55(1)(a): by drawing the cheque, the drawer engages that, if it is dishonoured, it will compensate the holder, provided the requisite proceedings on dishonour are duly taken.
• Section 38(1)(a): the holder may sue on the cheque in its own name.
• Section 30: every party whose signature appears on a bill is presumed to be a party for value, and every holder is presumed to be a holder in due course. The burden shifts only if fraud, duress or illegality is admitted or proved.
• Section 57: damages are a liquidated amount, being the amount of the cheque plus interest from presentment (which the court may withhold if justice requires) and any expenses of noting.

Because the amount is fixed and value is presumed, a cheque claim is usually easier to prove than a claim for goods or services. That is why bounced cheque claims are often suitable for summary judgment. Under Order 9 Rule 17 of the Rules of Court 2021, a claimant may apply for summary judgment after the defence has been filed and served, on the ground that the defendant has no defence to the claim or part of it. Magistrate’s Court claims follow the simplified civil process, and the solicitor will advise which applications are available there.

Act quickly on notice. Under section 48, a drawer who is not given notice of dishonour is discharged from liability on the cheque:

• Timing: where both parties are in the same place, notice should be given or sent in time to reach the drawer on the day after dishonour, unless special circumstances apply (section 49(m)).
• Form: notice can be in writing or by personal communication, need not be signed, and returning the dishonoured cheque is sufficient in form (section 49(e), (f) and (h)).
• Exception: notice is dispensed with as regards the drawer where the drawer has countermanded payment (section 50(3)(c)(v)).
• Presentment: a cheque should be presented within a reasonable time of issue. If it is presented late, the drawer is discharged only to the extent it suffers actual damage from the delay (section 74).

An action founded on a contract generally cannot be brought more than 6 years after the cause of action accrued (Limitation Act 1959, section 6(1)(a)), but evidence fades and assets move long before then.

Is issuing a bounced cheque a crime in Singapore?

No. Issuing a cheque that bounces is not, by itself, a criminal offence in Singapore. It may form part of cheating under section 415 of the Penal Code 1871 only where the person deceived the recipient with fraudulent or dishonest intent.

Section 415 illustrates the point with a person who pays using a bill drawn on a bank where he keeps no money, expecting it to be dishonoured and intending not to pay. That person cheats. The same section states that a mere breach of contract is not of itself proof of an original fraudulent intent. A customer who paid in good faith and then ran short of cash has a civil debt problem. Whether facts amount to cheating is for the police and prosecutors, so speak to a lawyer before alleging dishonesty in writing.

How does the end of corporate cheques in Singapore affect recovery?

From 1 January 2027, banks in Singapore will stop processing SGD corporate cheques, regardless of when they were issued. Any SGD corporate cheque, including one you re-present, must be deposited by 31 December 2026, subject to your bank’s cut-off time.

• 5 December 2024: MAS and the Association of Banks in Singapore (ABS) announced that banks would stop issuing new corporate cheque books by 31 December 2025, and extended the deadline to cease processing corporate cheques to 31 December 2026.
• From 1 January 2026: all banks stopped issuing new SGD corporate cheque books, bulk cheque services and cheque self-printing services.
• From 1 January 2027: banks will not process SGD corporate cheques, even if otherwise valid.

Source: the ABS FAQ on sunsetting SGD corporate cheques, updated 21 July 2026. Retail cheques, cashier’s orders and USD cheques remain available. If a customer promises a re-deposit will clear, agree a date well before 31 December 2026, or ask for FAST, PayNow or GIRO instead. The ABS FAQ says payees who miss the deadline will need to make alternative payment arrangements with the payer. The debt itself does not disappear on 1 January 2027; the simple route of re-depositing does.

For future contracts, replace “payment by cheque” with bank transfer. Where you used to accept post-dated cheques, consider Electronic Deferred Payment (EDP), the banks’ digital alternative to post-dated cheques.

How do you recover a bounced cheque in Singapore, step by step?

Keep a written record of every contact.

1. Read the IRD and secure the original. Note the return reason, cheque number, date of dishonour and amount. Keep the IRD or returned cheque safe, with a scan.
2. Give notice of dishonour the same or next day. Email and courier a short letter identifying the cheque, stating it has been dishonoured, and enclosing a copy of the IRD.
3. Ask for payment by transfer within a short, fixed period. If the customer asks you to re-deposit, get that in writing and check the cheque is within its 6-month validity and can be deposited before 31 December 2026.
4. Check your own records. Confirm invoices, delivery records and credit terms, note any complaint the customer has raised, and run an ACRA business profile search to confirm the customer’s legal name, status and registered office.
5. Send a formal letter of demand on the cheque and the invoice, with a deadline and a statement that proceedings will follow.
6. Consider a statutory demand. If the company owes more than S$15,000 and the debt is not disputed, a statutory demand under section 125(2)(a) IRDA left at its registered office creates a presumption of inability to pay if unpaid after 3 weeks. It can lead to winding up and is unsuitable where the debt is disputed in good faith.
7. File in the right forum. Claims on a contract for goods or services up to S$20,000 (S$30,000 with written consent) may go to the Small Claims Tribunals. Otherwise the solicitor files in the Magistrate’s Court (up to S$60,000), District Court (over S$60,000 up to S$250,000) or General Division of the High Court (above S$250,000), as set out by the Singapore Courts.
8. Obtain judgment and enforce. If the customer does not respond, judgment in default may follow; if it defends without a real answer, the solicitor may seek summary judgment. An unpaid judgment can be enforced against the company by seizure and sale, attachment of debts or examination of its officers.

Court proceedings are conducted by a Singapore Advocate and Solicitor. If you are unsure whether to claim on the cheque, the invoice or both, speak to a lawyer before the letter of demand goes out.

What documents do you need for a bounced cheque claim?

You need the cheque or IRD, proof of dishonour and notice, and the commercial documents behind the debt.

How long does recovery take and what drives the cost?

A customer who pays after a firm notice can settle within days; a defended claim takes months. Cost depends on the forum, whether the claim is defended and how much enforcement is needed.

Assumptions: one cheque, a Singapore-registered customer and no counterclaim. Official court and tribunal fees are published by the Singapore Courts and change from time to time, so check the current schedule. A successful claimant usually recovers only part of its legal costs. Our free tools can help with related company calculations.

What does the CSP prepare and what does the solicitor file?

A corporate service provider handles company records and evidence; the solicitor advises and runs the court case. Raffles Corporate Services does not give legal advice or act in court.

What common mistakes should you avoid?

• Delaying notice. A same-day email and letter avoids any argument that the drawer was discharged.
• Re-presenting a stale cheque. Banks process cheques only within 6 months of the date on them.
• Planning to re-deposit in January 2027. SGD corporate cheques will not be processed at all from 1 January 2027.
• Losing the original cheque or IRD. You can still sue, but the court may require an indemnity (section 70), and a duplicate from the drawer can require security (section 69).
• Suing the wrong party. The drawer is the company, not the director who signed. Check the name and UEN on ACRA.
• Threatening a police report as leverage. A bounced cheque alone is not a crime.
• Accepting a replacement cheque or instalments without written terms. Prefer bank transfers.

Frequently asked questions

Can I re-deposit a bounced cheque in Singapore?

Sometimes. An IRD can be re-presented only if your bank states on it that it is valid for presentment and you present it within the stated period (section 90(4)). Confirm with the customer first, and for SGD corporate cheques do it before 31 December 2026.

Can I charge interest on a bounced cheque?

Section 57 of the Bills of Exchange Act 1949 allows the holder to claim interest from presentment, although the court may withhold it where justice requires. Your contract may also provide for late payment interest on the invoice.

Can I sue the director who signed the cheque?

The claim is normally against the company that owns the account and drew the cheque, not the individual who signed for it. Directors are personally liable only in limited situations, which a solicitor can assess.

What if the customer says the goods were defective?

The law presumes every party who signed the cheque did so for value (section 30), which helps the holder. The customer can still try to prove a defence, so keep delivery records and correspondence ready.

Should I file a police report for a bounced cheque?

A bounced cheque is not an offence by itself. Cheating under section 415 of the Penal Code 1871 requires deception with fraudulent or dishonest intent. For most business customers, civil recovery is the route to getting paid.

Does the claim end when corporate cheques are phased out?

No. The phase-out stops banks processing SGD corporate cheques from 1 January 2027. It does not cancel the debt or your right to claim it, but payment must come by another method.

Last reviewed: 19 October 2026. The Editorial Team, Raffles Corporate Services.