BankerIn which of the following cases, the banker MAY refuse to honour the cheque?(I) When the cheque's legality is doubtful.(II) When the customer has given notice of assignment of the credit balance of his account.(III) When the cheque is presented a br (2024)

FAQs

When a banker may refuse to Honour the cheque? ›

(I) When the cheque's legality is doubtful. (II) When the customer has given notice of assignment of the credit balance of his account. (III) When the cheque is presented at a branch where the customer has no account. (IV) When the holder's title is defective and the banker comes to know of it.

When the cheque has been allowed to become stale. When the banker receives notice of customer's insanity. When the banker has no sufficient funds of the drawer with him. When the cheque is ambiguous or otherwise materially altered.

A bank can refuse to make the payment mentioned on a cheque due to various reasons. Some of them are mentioned as follows: Insufficient funds in the payer's bank account. Signature missing or mismatch.

In the following circ*mstances, the bank's duty to honour a customer's cheques and repay deposits can end entirely: (1) the bank closes an account on its own (unilaterally); (2) the bank gives reasonable notice that it will not be permitting overdrafts anymore; (3) the bank is justified in closing an account ...

Cheques may be dishonoured by a financial institution because: There are insufficient cleared funds in the account to cover the value of the cheque. The account holder has instructed the bank not to pay the cheque (called a stopped cheque). The account holder's funds have been frozen.

Some reasons why a bank won't cash a check include not having a proper ID, not having an account with that bank, the check is filled out incorrectly, or the check being too old. Ensure you comply with all the required criteria before attempting to deposit a check.

Cheques can bounce for various reasons, including: Not enough funds on the drawing account. A block/marker on the drawing account preventing transactions. The cheque is returned by request on the day of presenting.

The check payment may have been rejected for a variety of reasons including: incorrect bank routing and account information on check payment, insufficient funds to cover check payment amount, or using accounts that are not authorized for check payments.

If you present a cheque which is payable to someone else or appears to belong to someone else, the bank may, in its discretion, refuse to accept that cheque for deposit, refuse to cash that cheque or may require you to comply with some conditions before it will accept that cheque for deposit or cash it.

A bank sets its own policy whether to accept or reject third-party checks and is not legally required to accept them. For instance, if the bank accepts the check, the bank can require the payee to be present to verify the signature.

What 6 reasons can a bank give for not accepting a check? ›

Your bank can only refuse to make a payment if: you don't have enough money available in your account.

According, to section 31 of the negotiable instruments act 1881 the banker is liable to compensate the drawer for any loss and damage caused by a default on his part in dishonoring the cheques without sufficient reason.

A bank may choose to dishonor an instrument due to insufficient funds at any time between the receipt of that instrument and the time that the payer bank returns the instrument or when it gives notice of dishonor.

banker has an obligation to honour cheques of its customer, drawn on him and presented for payment, subject to the condition that there are sufficient funds in the accounts and the cheque is in order.