GK
BANKING AWARENESS AND SEBI
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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When a bank returns a cheque unpaid, it is called-
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drawing of the cheque
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payment of the cheque
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cancelling of the cheque
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dishonour of the cheque
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Explanation:
Detailed explanation-1: -Cheques may be dishonoured by a financial institution because: There are insufficient cleared funds in the account to cover the value of the cheque. The account holder has instructed the bank not to pay the cheque (called a stopped cheque).
Detailed explanation-2: -A bounced check is slang for a check that cannot be processed because the account holder has non-sufficient funds (NSF) available for use. Banks return, or “bounce", these checks, also known as rubber checks, rather than honoring them, and banks charge the check writers NSF fees.
Detailed explanation-3: -Cheques are dishonoured by the bank if there are insufficient funds, a signature mismatch, overwriting or a stale date.
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