What are the reason for dishonouring cheque?
What are the reason for dishonouring cheque?
Cheques are dishonoured by the bank if there are insufficient funds, a signature mismatch, overwriting or a stale date.
When can a banker legally Dishonour a cheque?
Insufficient Funds in the customer’s account to meet the demand-In Osawaye V National Bank for Nigeria and in the case of Savannah Bank V Salami, the Supreme Court noted that where the amount standing in the customer’s account is not up to the amount sought to be withdrawn, the bank can dishonour the cheque.
Under what circumstances a reducing bankers can Dishonour a cheque?
A banker must also refuse payment of cheques when its customer has been adjudged insolvent or has become insane since in such cases its original authority to pay on behalf of the customer ceases to exist. A fresh authority is required on those accounts.
What is reason 88 for cheque return?
Return Reason 88 will be a technical return reason, and will have to re-present by the Presenting Bank, without the physical cheque being returned to the customers.
What is meant by cheque Dishonoured?
In an ideal situation, the payer’s bank transfers the funds from the payer’s account to the payee. However, there are times when the payer’s bank or the payee’s bank refuses to honour this commitment. The reasons for this ‘decline’ may vary. In such a case, the cheque bounces and is called a ‘dishonoured cheque’.
What is the difference between Cheque Dishonour and cheque bounce?
Difference between Cheque Bounce & Cheque Dishonour The concept of cheque Dishonour and cheque bounce is almost the same, but the only difference is that cheque Dishonour occurred due to distinctive signature, wrong date etc. But the cheque bounce occurred only due to insufficient funds in drawer’s account.
Who can countermand the payment of a cheque?
In the case of check payments, a customer can countermand the payment at any time before the check is presented, through a stop-payment order.
What is reason 84 for cheque return?
(b) After exhausting all avenues if it is necessary to return the cheque due to link failure, it may be returned under Reason Code 84 (Other reasons-Connectivity Failure), with no charges to be debited to the payee’s account.
What is 88 other reasons Please specify meaning?
One of such reason codes is 88 – “Others”. This reason is expected to be used only under exceptional circumstances wherein. the return reason is not covered by the list provided under URRBCH.
What are the consequences of dishonour of cheque?
According to Section 138 of the Act, the dishonour of cheque is a criminal offence and is punishable by imprisonment up to two years or with monetary penalty or with both. If payee decides to proceed legally, then the drawer should be given a chance of repaying the cheque amount immediately.
What is the new rule of cheque bounce?
A cheque bounce is an offence under Section 138 of the Negotiable Instruments Act, 1881 (“Act”) punishable with a fine which can extend to twice the amount of the cheque or imprisonment for a term not more than two years or both.
What happens if a cheque is dishonoured?
If a cheque is dishonoured When a cheque is dishonoured, the drawee bank immediately issues a ‘Cheque Return Memo’ to the banker of the payee mentioning the reason for non-payment. The payee’s banker then gives the dishonoured cheque and the memo to the payee.
