REASONS WHY BANKS WON’T HONOUR YOUR CHEQUE

A cheque is a written document instructing a bank to debit your account and pay someone. While writing a cheque is quite simple, cashing a cheque can sometime be a nightmare. This write up provide the following as as some of the reasons why a bank will not honour your cheque.

·         You don’t have means of identification (valid I.D Card); Banks have to protect themselves against cheque fraud. Without proper proof of identity, banks can refuse to honour a cheque writing in your name. Always carry valid means of identification such as driving license, national i.d card, passport or voter’s card, when cashing a cheque.

·         Cheque conversion; Bank will not honour a cheque presented by a wrong person. Ensure that the payee on the cheque is the same person that presents it at the counter or the same as the name on the cheque deposit slip. The payee must be the owner of the account into which the cheque is paid. Where the payee is different from the account owner, a proper endorsement must be obtained.

·         The bank branch can’t handle a large transaction without prior notice. Not all banks can handle large cash transactions without prior notice. Smaller branch of a Bank may not have all the necessary cash to clear a very large cheque. Some branches are so small that they cannot keep cash above their limit.  When you have a cheque for a very large amount, call the Manager of the bank branch you intend to visit in advance. The bank Manager can give you proper advice.

·         Stale Cheque. The life span of a cheque is six month from the date it is drawn. If you wait too long to cash a cheque and it is over six months old, a bank can refuse to pay it. Some banks may decide to pay it anyway as a favour to long-time customers, but it is at the discretion of the bank.

·         Crossing a cheque. When two transverse lines are drawn across the face of a cheque with or without the word & co. the cheque has been ‘crossed’. For any crossed cheque to be paid across the counter it must be opened by counter signature across the traverse lines. A bank can dishonor your cheque if it is crossed.

·         Drawer attention requires. A cheque issued to a third party may not be paid by bank if the amount in words and figures are not correct and the same. If the cheque is not sign by drawer or if there is any alteration.

·         Other reasons are; cheque not dated, cheque not properly drawn and if there is notice of drawer’s bankruptcy or liquidation.