Banking · Cheque Dishonour and Validity
A cheque dated 31st August 2025 is presented for payment at the counter of a bank on 1st December 2025. The cheque is for 75,000 Rupees. The customer's account balance is 80,000 Rupees, but the bank has marked a lien of 10,000 Rupees for unpaid locker rent. Calculate the available balance and determine the banker's decision.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Available Balance: 70,000 Rupees; Result: Honor the cheque by allowing a temporary overdraft of 5,000 Rupees.
- 2Available Balance: 70,000 Rupees; Result: Dishonour because the cheque is stale.✓
- 3Available Balance: 80,000 Rupees; Result: Honor the cheque because locker rent is a separate contract.
- 4Available Balance: 70,000 Rupees; Result: Dishonour due to Insufficient Funds.
Correct answer
Available Balance: 70,000 Rupees; Result: Dishonour because the cheque is stale.
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