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GAURI SANKAR posted an update 11 years, 2 months ago

Banking Awareness – queries and answers:
Your query:
I have a crossed cheque on my name,dated 10 Feb 15, I do not have a bank account. I open an account on 12 Feb 15. Can a bank refuse to accept the cheque as it is dated before the account opening date?? Plz clarify..yes or no.. Is there any circular of RBI..in this connection?
Our answer: As per Negotiable Instruments act 1881, a cheque is valid for three months from the date of issue of the cheque and in this case, three months from 10.02.2015. However, in practice, bankers are reluctant to accept the cheques dated prior to the date of opening of an account since it amounts to opening of an account exclusively for the purpose of encashing the cheque. However, the discretion of the branch manager is final in this situation and he analyses the issue from different angles – why the cheque was issued; for what purpose the cheque was issued; the reason for delay for opening of an account with the banker etc., Once he is satisfied he accepts the cheque for collection
- GAURI SANKAR replied 11 years, 2 months ago
  I wish to provide some more points so that the readers are able to get a better information about the issue. Let us view the issue from the following two angles: 01. A student gets a cheque for an amount of Rs. 5000.00 on account of scholarship or an award for exemplary performance in sports, dance, music etc., and since he was not having any bank account before getting the cheque he approaches the banker for opening an account so that he can encash the cheque. The bank manager gets the details about the receipt of cheque, the purpose of receipt etc., and since he finds that the transaction is found to be a genuine one, he permits opening of account for the student. 02. A company which is already having one overdraft account with another bank receives a cheque for Rs. 20.00 lakhs and they approach another bank for opening an account so that the cheque is encashed. A company is supposed to have an account for conducting their day to day banking transactions and with bank account, it is not possible for a company to conduct any business nowadays. Now the banker gets a doubt and he is unable to find out the reason for opening an account with the bank, when the company is already having one overdraft account with another bank. The cheque may be on account of some illegal transactions, it may be a forged cheque or it may be on account of some conversion of money etc., Now the banker refuses to accept the cheque. As per negotiable instruments act, when a bank collects a cheque without good faith and out of negligence, he may not be getting sufficient protection available to the collecting banker as per law in case the cheque is found to be a forged one or on account of illegal transactions at a later stage