Understanding the Basics of Cheques: Types, Parties, and Honor
Learn about the characteristics, parties, types, and regulations surrounding cheques, including material alteration, honoring, and precautionary measures for payment to enhance your financial knowledge and security.
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Presentation Transcript
ARULMANI. R ASSISTANT PROFESSOR, DEPARTMENT OF MANAGEMENT STUDIES BON SECOURS COLLEGE FOR WOMEN, THANJAVUR.
CHEQUE A cheque is a peace of paper issued by the bank, to an account holder of that bank to allow the account. To pay third parties for accounts, bills and payments to avoid the necessity of using cash. A cheque as a Bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand .
CHARACTERISTICOFCHEQUES In Writing Express order to pay Definite and Unconditional Order Signed by the Drawer Order to pay Certain Sum Order to pay Money Only Certain Three Parties Drawn upon a Specified Banker Payable on Demand
PARTIES OF CHEQUE Drawer Drawer is the person who draws the cheque, i.e., the depositor of money in the bank. Drawee Drawee is the drawer s banker pm whom the cheque has been drawn. Payee Payee is the person who is entitled to receive the payment of a cheque.
TYPES OF CHEQUES Open cheque Crossed cheque Bearer cheque Order cheque Other types of cheques Multilated cheques Stale Cheques Anti-dated Cheques Post-dated cheques Travelers cheques
MATERIAL ALTERATION Material alteration is that change in the negotiable which causes it to speak a different language in legal effect from which it had originally spoken. MARKETING OF CHEQUES Making a cheque means the cheque being marked or certified by the banker, to state that it is good for payment .
HONOR OF CHEQUES A banker having sufficient funds of the customer, properly applicable to the payment of cheques, is duty bound to honor his customer s cheque PAYMENT OF CHEQUES Honoring of cheques drawn by his customer is very important obligation of a banker.
PRECAUTION FOR PAYMENT OF CHEQUES Proper form Open or Crossed Cheque Place of Presentment of Cheque Date of the Cheque Multilated cheque Words and Figures Alteration and Over writings Proper Endorsement Sufficiency of Funds Verification of Drawer s Sognature
DISHONOR OF CHEQUE According to Section 92 of the Act, A promissory note, bill of exchange or cheque is said to be dishonored by non-payment when the maker of the note, acceptor of the bill or drawee of the cheque makes default in payment upon being duly required to pay the same . TYPES OF DISHONOR Rightful dishonor Wrongful dishonor
WHEN A BANKER MUST REFUSE PAYMENT OF CUSTOMER S CHEQUE When the Customer Countermands the Payment Notice of the Customer s Death Notice of Customer s Insanity Notice of the Customer s Insolvency Receipt of the Garnishee order Notice Of Assignment Trust Accounts Suspicion about the Title over the Cheque
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