Question

List/Mention any two/three circumstances under which a bank can refuse payment or dishonour a cheque.

For what reasons can a bank refuse to honour a customer's cheque?

List any two circumstances under which a bank can refuse payment of cheque.

Answer 1

1. When the funds to the credit of the drawer are not sufficient to make payment of the cheque.
2. When the cheque is postdated and is presented for payment before the date it bears.
3. When the cheque is stale, i.e., more than three months old.
4. When the drawer has stopped payment of the cheque.
5. When the cheque is altered and alterations are not signed.
6. When the cheque is mutilated.
7. When the signature of the drawer on the cheque does not tally with his specimen signatures in the records of the bank.
8. When the amounts in figures and words differ.