Basically it requires two parties. The one is maker who promises to pay and the other is payee to whom it is payable. For example a person take loan from the bank then the “person” is the “maker” and “the bank” is “payee”.
Bank should not pay a cheque in the following cases:
Cheque is different from bill of exchange in following ways:
Features of Negotiability:
It’s a norm for the identification of the “Non-performing asset” (NPA) starting 31 March 2014.
The norm is as follow:
The Promissory Note which is payable immediately on demand is called “Demand Promissory Note”.
The negotiable instruments include:
It’s an instrument in writing which contains an unconditional undertaking signed by the maker to pay a certain sum of money to the order or the bearer of instrument. The Promissory Notes require being stamped ad per Indian Stamp Act.
Following are the types of Bills used in Banking Operations:
Types of Promissory Note:
The Promissory Note which is payable after a predefined definite period is called “Usance Promissory Note”.
Following banking services can be achieved by using IT:
If the cheque is not presented for payment for a period of 6 months from the date of its issuance, it is then considered as Stale Cheque.
The validity of the cheque can be reduced by the drawer, like valid for 3 months but the maximum validity of any cheque is 6 months.