BANKING AFFAIRS

Detailed explanation-1: -Technically speaking, cheques don’t have an expiry date. But, in practice, banks will usually reject a cheque if you try to pay it in or cash it more than six months from the date of issue – that’s the date written on the cheque.

Detailed explanation-2: -Accordingly, cheques, Drafts, Pay Orders and Banker’s Cheques are “valid for 3 months from the date of instrument”, with effect from 01.04.

Detailed explanation-3: -The date of validity of the cheque is initiated by the Reserve Bank of India (RBI) with effect from 1 April 2012. After 3 months, the cheque becomes a stale one, which is equal to a dead cheque in the sense that it is no longer valid. Banks will not honour such cheques.

Detailed explanation-4: -Although, there are several cheque bounce reasons to be considered such as incorrect date mentioned on the cheque, signature mismatch, mismatch of the amount and figures, damaged cheque, overwriting of the cheque, etc. The principal reason for a cheque bounce is insufficient funds.