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Wednesday, 12 September 2012

On which grounds a banker can terminate the payment of a cheque or Under what circumstances is a banker authorized to terminate the payment of cheque

On the following grounds a banker can terminate the payment of a cheque :

1. Countermand Of Payment :-
The drawer of a cheque can stop the payment of a cheque by informing the banker either on telephone or through message. The banker will suspend the payment.

2. Customers Balance :-

The banker can refuse to make the payment of a cheque if his balance is not sufficient to cover the cheque. While one draft facility case is different.

3. Payment In Due Course :-
The banker can refuse to make the payment of cheques which is not according the instructions of the drawer or it is presented after the office hours.

4. Marking Cheques :-
A drawer may get a particular cheque marked from his banker. The banker will retain the amount in order to honour the marked cheques. Bankers always honours these cheques first and other cheques at the end.

5. Forgery Of The Drawer Signature :-
If the bank is doubtful about the signature of the cheque then he will refuse the payment.

6. Notice Of The Customers Death :-
The banker will terminate the payment of a cheque if he receives the notice of the customers death.

7. Making Of Receiving Order :-

If the court satisfied that the customer appears to be insolvent it will issue a receiving order and banker will refuse to make the payment.

8. Trust Funds :-
If the banker is satisfied that his customer by breach of trust is crediting the trust funds to his account, the banker may refuse to make the payment.

9. Instruments Other Then Cheque :-
The banker can refuse to honour the instruments other than cheque.

10. Torn Or Cancelled Cheque :-

If the cheque is torn or cancelled the banker may refuse the payment for a cheque.

11. Out Dated :-
If the cheque is post dated the bank will not honour the cheque.

12. Difference In Word sand Figures :-
If the amount stated on cheque differ from the amount expressed in figures, the banker will refuse the payment or a cheque.

13. Particular Branch :-
The bank will refuse to make the payment of a cheque if it is presented at a branch at which the customers account is not available.

14. Lost Or Stolen :-
If a cheque is lost or stolen and drawer informs the bank well in time, the bank will refuse to honour the cheque.

15. Irregular Endorsement :-
If the endorsement in the cheque is irregular the bank will not make the payment of the cheque.

16. Joint Account :-
If the cheque is not drawn according the account holders instructions, or at the death of one party, the banker can refuse to make the payment and he will decide about the payment according the instructions.

17. Partnership Account :-

The banker will not make the payment unless the cheque is signed by the all partners. The death of partner dissolves the partnership.

18. Company Account :-
At the time of opening an account company provides a copy of resolution passed by the directors. According to the resolution authorized person can operate the account. If unauthorized person draws a cheque the banker will dishonour the cheque.


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