Question
State FOUR reasons why a cheque may be dishonored by a bank.
Answer
- If the drawer has insufficient funds in his / her account
- If the amount in words differs from the amount in figures
- When the cheque is post - dated i.e presented for payment before the date written on it.
- When the cheque is stale i.e presented for payment after the expiry date( normally six months from the date of issue)
- If the signature of the drawer differs from the specimen in the bank
- If the cheque has be altered and the drawer has not signed against alteration
- When the drawer instructs the bank to stop payment
- When the cheque is defaced or mutilated thus rendering the contents illegible
- When the bank learns about the death, insanity or bankruptcy of the drawer.
- If the drawer has closed his / her account with the bank
- If the cheque contains errors which need to be corrected
- When a customer is presenting a crossed cheque to be paid a cross the counter
- If the amount in words differs from the amount in figures
- When the cheque is post - dated i.e presented for payment before the date written on it.
- When the cheque is stale i.e presented for payment after the expiry date( normally six months from the date of issue)
- If the signature of the drawer differs from the specimen in the bank
- If the cheque has be altered and the drawer has not signed against alteration
- When the drawer instructs the bank to stop payment
- When the cheque is defaced or mutilated thus rendering the contents illegible
- When the bank learns about the death, insanity or bankruptcy of the drawer.
- If the drawer has closed his / her account with the bank
- If the cheque contains errors which need to be corrected
- When a customer is presenting a crossed cheque to be paid a cross the counter
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