Give any four reasons that may lead to dishonour of a cheque.

Why cheques are dishonoured

  • Insufficient funds
  • Post – dated cheque
  • Stale cheque.
  • Amount in words differ from amount in figures.
  • Signature of the account holder may differ from the specimen in the bank
  • Alterations that have not been signed against
  • The drawer has stopped payment of the cheque.
  • If any one of the requirements for a properly drawn cheque is missing or wrongly written.
  • A crossed cheque will be dishonoured if the depositor does not abide by the conditions of the crossings

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