cpc

self cheque not honoured by bank


Is there any rules by RBI that a company can't issue a " SELF" cheque to withdraw cash from his current account for company's expenses purpose. One of the Reputed Bank has denied to accept "Self" cheque theough there was bearers signature on back side of the cheque with proper endrosement by Authoried person.

I want to know when other bank accept the SELF cheque in same manner why the SBI has not accepted the SELF cheque?

SBI has  advised the name of the bearer should be on the cheque but as per best of my Knowledge " Bearer cheque and SELF cheque are different in nature technically.

Is there any body who can really focus on the matter?

 

 
Reply   
 
ADVOCATE./LAWYER

SIR,

KINDLY NOTE THAT ,

DUE TO SEVERAL CASES OF CHEATING AND FRAUD, BANKS ARE TAKING PRECAUTIONS TO SAFEGUARD THE INTEREST OF ACCOUNT HOLDERS.AND HENCE SOMETIMES INCONVENIENCE IS CAUSED TO EVEN GENUINE PERSONS.

1. FROM THE GIVEN FACTS YOU HAVE MENTIONED THAT SELF CHEQUE WAS ISSUED AND BANK DENIED THE PAYMENT TO THE BEARER.

2. IN CASE OF PERSONAL ACCOUNTS PERSON IS SIGNING THE SELF CHEQUES AND PRESENTING AT BANK COUNTER AND BANK WILL ALLOW WIDRAWAL AFTER CHECKING HIS IDENTITY PROOF AND SIGNATURE. IT IS A PRECAUTION TAKEN BY THE BANK OFFICERS.TO SAFEGUARD THE ACCOUNT HOLDERS INTEREST FROM ANY MISUSE OR THEFT OF SAID CHEQUES PLESE NOTE.

3. BUT IN CASE OF COMPANY ACCOUNTS AUTHORISED SIGNATORY IS SIGNING THE CHEQUES AND IF ANY OTHER PERSON GOES AS A BEARER OF SAID SELF CHEQUE , THE BANK OFFICER HAS TO VERIFY THE THE AUTHORITY,  AS PERSON SIGNING SELF CHEQUE AND PERSON PRESENTING AT THE COUNTER WHO IS BEARER IS DIFFERENT.THERE ARE OTHER IMPORTANT FACTORS INVOLVED IN THIS , THERE MAY BE A LIMIT FIXED FOR CASH WIDRAWALS , AT THE TIME OF SENDING LIST OF AUTHORISED SIGNATORIES AND ACCOUNT OPERATING INSTRUCTIONS GIVEN TO BANK AT THE TIME OF OPENING THE SAID ACCOUNT IN THE NAME OF THE COMPANY PLEASE NOTE.

4  THAT MAY BE THE REASON THE BANK MIGHT HAVE ASKED TO WRITE THE NAME OF THE BEARER OF SAID CHEQUE TO SAFEGUARD THE INTEREST OF THE SAID COMPANY.

5. THESE DISPUTES CAN BE SORTED OUT BY THE CONCERNED AUTHORISED SIGNATORY AND MANAGER OF THE SAID BANK BY PROPERLY DISCUSSING THE MATER.

GOOD LUCK.

N.B.SAWANT., M.COM.LL.B., ADVOCATE HIGH COURT.

 
Reply   
 



"Self" chq can be used from cash withdrawals from current a/cs of companies/proprietorship/partnership firms. There is no law preventing that. No Bank can decline such withdrawals. As Mr Sawant has recommended, the company should speak to the Branch Head and sort out the matter amicably.

 

Pay to "Self or Bearer" and "Anil or Bearer" have the same implications. The Bank is supposed to pay cash to whoever is presenting the chq over the counter. The Bank can ask for identification of the bearer and do further due diligence if they have a doubt that the chq has not been obtained by legal means by the bearer, but Banks can't refuse payment just because name of the bearer is not written on the chq.

 
Reply   
 

If I may add, cash is NOT TO BE PAID by banks when the Payee name is a Limited or Private Limited Company.

 

 
Reply   
 

LEAVE A REPLY


    

Your are not logged in . Please login to post replies

Click here to Login / Register  



 

  Search Forum








×

Menu

IPC Grand Course     |    x