Reasons for Dishonour of Cheque
- If the cheque is overwritten.
- If the signature is absent or the signature in the cheque does not match with the specimen signature kept by the bank.
- If the name of the payee is absent or not clearly written.
- If the amount written in words and figures does not match with each other.
What is the meaning of Dishonour of Cheque?
Now after know about cheque, next question that arises is what is dishonour of cheque. So on presenting a cheque if the bank refuses to pay the amount mentioned on the cheque to the payee due to certain reasons then it is said to be an dishonoured cheque. Dishonoured cheque cannot be further be used.
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 will happen if a cheque bounces?
The punishment for cheque bounce is imprisonment for a term not more than two years or a fine that can extend to twice the amount of the cheque or both. A civil suit can also be instituted against the drawer for payment of the cheque amount.
When can a Cheque be rejected?
1) Insufficient funds: The cheque amount is more than the free balance available in the drawer’s bank account. 2) Irregular signature: The signature of the drawer on the cheque does not match the specimen signature available with the bank.
What does it mean when a check is dishonored by a bank?
Any check (cheque) that cannot be redeemed for money from a bank is called a dishonored check (cheque). Why a bank will dishonor a check (check) If the drawer’s account has been frozen then the check cannot be redeemed for money. The drawer is the person writing the check.
Why is my bank not honoring my check?
But there are certain reasons that will prevent a bank from honoring the check (cheque). Any check (cheque) that cannot be redeemed for money from a bank is called a dishonored check (cheque). If the drawer’s account has been frozen then the check cannot be redeemed for money.
When to give notice of dishonour of cheque?
The payee has an option to resubmit the cheque within three months of the date specified on the cheque after fulfilling the reason for the dishonour of cheque. Moreover, the payee has to give a notice to the drawer within 30 days from the date of receiving “Cheque Return Memo” from the bank.
Why was my cheque dishonoured by fingyan bank?
If you are one of the those whose cheque has been bounced and are wondering what could be the reason for dishonour of cheque, then we are here to help you find out that reason. Read on to find out 7 reasons why your cheque is dishonoured. What Is A Cheque?
