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what is cheque discount


Hello friends,

   I had recieved a cheque which was Account payee. As I understand, if its an account payee cheque, the money can be realized only through bank account. Then, what is discounting of a cheque. My cheque has been realised by someone and I am in trouble. What is cheque discounting and is it legal in India as per RBI?

 

Please hlep me. 

 
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Advocate

Cheque discounting is same as cheque purchase.  A/c payee cheque cannot be endorsed in favor of anyone else.  If there is no branch of the bank's cheque that you have received, you can take it to some other bank in which your account exists and ask the branch to purchase it.  The charges will be more for purchasing cheque than collecting it on your behalf.  The advantage is you will get money the day your cheque is given to bank for purchase.  People who want money quickly without waiting for proceeds of cheque to realize use this option even at the loss of some greater amount of charges to be paid to bank.  It depends on your goodwill with the bank where your account is maintained.  The bank is at risk because if the cheque is returned unpaid, it should be able to recover the cheque amount from you.  Hence banker will study your credibility before purchasing the cheque.  If it is a banker's cheque, Demand draft or Pay order the banker does not hesitate at all to purchase it at once.  Only if it is cheque issued by individual or any company/firm, banker will study your profile a bit to assess the risk of return and when he confirms that your profile is good enough to recover dues if cheque is returned then only he will purchase the cheque.

 

But third party cannot utilize the option of giving it to some bank and get it discounted because it is account payee cheque.  Third party can utilize the option of cheque discount if it is not an account payee cheque and also if it is endorsed by the payee on its behalf.

 
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In my case since the cheque was issued by State Bank of Mysore, the money is not credited to my savings account, but in the bank, it is showing as realized. Hos is this possible? I had signed a discount form and had given it to my friend. Can he realize the cheque which was in my name with the help of discount form? Is this legal?

 
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advocate

check out with the your bank were you have account about the details to whom it was paid they have the details were and to who it was discounted 

as already you have given a signed form to your friend were he deposited and submitted the form

if he is not telling the truth then enquire with the person who issued you the cheque on your name as which bank had relised your cheue 

 
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