PAYMENT AND COLLECTION OF CHEQUES AND OTHER NEGOTIABLE INSTRUMENTS
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Principles and Practices of Banking — JAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is the statutory definition of a cheque under the Negotiable Instruments Act, 1881?
A cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand, as defined under Section 6 of the NI Act, 1881.
What is the minimum notice period a payee must give the drawer after cheque dishonour before filing a Section 138 complaint?
15 days written notice to drawer after dishonour
What is the maximum validity period of a cheque from the date of its issue?
A cheque is valid for three months from the date of issue; beyond this period it becomes stale and banks are not obligated to honour it.
What is the time limit for a payee to file a complaint under Section 138 of the NI Act after the notice period expires?
Complaint must be filed within 30 days of notice expiry
What does 'crossing of a cheque' signify, and how does it protect the payee?
Crossing restricts payment to a banker only, ensuring the cheque cannot be encashed over the counter and providing a traceable trail that protects the payee against misappropriation.
What is the maximum punishment prescribed under Section 138 of the NI Act for cheque dishonour?
Imprisonment up to two years or fine twice the cheque amount or both
What is the difference between a general crossing and a special crossing on a cheque?
A general crossing consists of two parallel transverse lines, directing payment through any bank; a special crossing additionally names a specific bank between the lines, restricting payment to that bank alone.
Under which section of the NI Act does a collecting bank derive protection when acting as an agent for collection?
Section 131 of the Negotiable Instruments Act 1881
Video classes for this chapter
More chapters in Module A - General Banking Operations
Master the full PPB syllabus
Every chapter of Principles and Practices of Banking — videos, tests, notes and one-liner decks in one place.