BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the drawer may issue other cheques which bear a date prior to the date of such a cheque and if the balance is insufficient, the bank may be held liable
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an Attachment Order may be received attaching the balance in the account
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the drawer may stop payment
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All of the above
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Detailed explanation-1: -This situation represents a risk to the check recipient, since the passage of time may result in there being no cash left in the issuer’s bank account to be used to pay the amount listed on the check when it is eventually presented to the bank for payment.
Detailed explanation-2: -But in reality, it is not always advisable to issue a post-dated cheque. This is because there could be possibilities that you may not be able to honour the cheque on the given future date. The possible reason could be expected funds have not come into the bank.
Detailed explanation-3: -A post-dated cheque is not eligible for clearing and therefore should not be deposited before the due date. However, given the large volume of cheques and the degree of automated cheque processing, some post-dated items may inadvertently be posted.
Detailed explanation-4: -According to the meaning of post-dated cheque itself, once PDC becomes a cheque i.e. from the date it is payable on demand, it is then applicable as issued to meet a legitimate liability. But only due to insufficient funds or the reasons specified in the Act, will the cheque be dishonoured.