Photo Credit: Indiatimes

In a new measure post demonetisation, the government is planning to amend a new law to introduce harsher punishments for defaulters in cheque bounce case starting next year.

The suggestions were put forth as part of a pre-budget exercise when finance ministry officials met delegations of traders' associations. The recommendations were made by the traders' associations to ensure that payments made through cheques were more secure.

Traders, who now have to move towards cashless transactions or non-cash methods, raised concerns as they are wary of accepting bounced cheques from customers. To cope with the situation, the traders have asked for stringent laws for people issuing such cheques.

Traditionally considered as BJP's vote bank, traders have been severely hit by the currency ban announced by Prime Minister Narendra Modi.

As per a media report, if the proposal given by the traders are taken into consideration, the government could amend a new law with regards to cheque bouncing cases. The legislation is likely to be brought in during the budget session of Parliament.

It has been learnt that the government will give such cheque issuers a month's time to settle the dispute, and take action if no steps have been taken during the stipulated period. Now, with the cash crunch still continuing even as the 50-day window, stipulated by the PM, draws to a close, the traders are looking to use more of bank cheques, but with additional guarantees.

It is being seen as a move to soothe traders, who have been hit hard by the cash crunch, ahead of state polls in a string of states, including Uttar Pradesh and Punjab.