CSEET · Business Communication · Common Business Terminologies
Arjun's cheque dated 1 March 2025 was presented to the bank on 10 January 2026 and was returned unpaid. Which term best explains the bank's reason for refusing payment, assuming the usual validity rule in India?
The cheque was stale. In India a cheque is valid for three months from its date, so one presented more than ten months later is out of date and the bank refuses payment. Crossing, being open or post-dated would not explain this refusal here.
- AThe cheque was post-dated
- BThe cheque was crossed
- CThe cheque was staleCorrect
- DThe cheque was an open cheque
Explanation
In India a cheque is valid for three months from its date. Presented after more than ten months, it is a stale cheque and the bank will not honour it. Post-dated means dated in the future, which is not the case. Crossing and open status do not affect validity.
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