BANKING AFFAIRS

Detailed explanation-1: -When you cash or deposit a check and there’s not enough funds to cover it in the account it’s drawn on, this is also considered non-sufficient funds (NSF). When a check is returned for NSF in this manner, the check is generally returned back to you. This allows you to redeposit the check at a later time, if available.

Detailed explanation-2: -A cheque bounce is an offence under Section 138 of the Negotiable Instruments Act, 1881 (“Act”) punishable with a fine which can extend to twice the amount of the cheque or imprisonment for a term not more than two years or both.

Detailed explanation-3: -Personal, business, and payroll checks are good for 6 months (180 days). Some businesses have “void after 90 days” pre-printed on their checks. Most banks will honor those checks for up to 180 days and the pre-printed language is meant to encourage people to deposit or cash a check sooner than later.

Detailed explanation-4: -As per the Negotiable Instruments Act, 1881, if a cheque is dishonoured by the bank due to insufficient money in the bank account of the drawer then it is a criminal offence. In such a case, the drawee bank issues a ‘Cheque Return Memo’ to the payee’s bank mentioning the reason for non-payment.