What is a post-dated cheque? Can I deposit or cash a post-dated cheque? Is post-dating a cheque illegal?
A post-dated cheque is a cheque issued with a written date in the future or dated after the date of issue.
If a bank notices
||Section 13 (2) of Bills of Exchange Act 1949 (Act 204)
A bill is not invalid by reason only that it is ante-dated or post-dated...
a post-dated cheque presented for payment before the date appearing thereon, the cheque will be returned marked post-dated or the bank will hold on to the cheque until it is able to be cashed in. The greatest danger
lies in the banker paying a post-dated cheque and subsequently dishonouring another cheque which ought to have been paid but had to be returned due to lack of funds.
Therefore, the practice of issuing or accepting a post-dated cheque is not
encouraged. This is to avoid any incidence of returned cheque due to insufficient funds and the resulting penalty charges. It causes inconvenience to all parties - drawer, drawee and payee.
The following consequences may also ensue before the due date:
- Drawer may stop payment [Section 75(a) of Bills of Exchange Act 1949 (Act 204)]
- Drawer may die [Section 75(b) of Bills of Exchange Act 1949 (Act 204)] or become mentally incapacitated
||Section 75 of Bills of Exchange Act 1949 (Act 204)
Revocation of banker' s authority
75. The duty and authority of a banker to pay a cheque drawn on him by his customer are determined by:
(a) countermand of payment;
(b) notice of the customer's death.
- There may be a garnishee order on the drawer's account.
With the advent of internet banking, customer can set up scheduled automated payments or direct credit. Simply call your bank for more information.
- Drawer means the person who draws a cheque.
- Drawee banker or paying banker means the banker on whom the cheque is drawn.
- Payee means the person to whom the cheque is drawn payable.
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