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v. Signature
The drawer should give his/her signature on the right hand side bottom of the
cheque. It must tally with the sample signature provided to the bank. A bank keeps the
signature specimen card of each depositor and verifies one’s signature of the cheque,
whenever it comes in the bank to demand money.
vi. Cleanliness and Neatness
A cheque should be clean and neat in writing and in outlook. The rubbing and
crossing the words and figures, overwriting of words and figures, unnecessarily folding
of the cheque should be avoided. The drawer with his signature should approve a slight
crossing or addition of words and figures.

Points to Remember

i. Date ii. Name iii. Amount iv. Account number v. Signature vi. Cleanliness and neatness

17. Dishonour of a Cheque

Sometimes, the bank does not pay the amount demanded by a cheque. The condition
of a cheque not being paid by the bank is known as dishonour of a cheque. The following
can be the causes of dishonouring a cheque:
i. If the date in a cheque is not mentioned or wrongly mentioned. The mentioning of
the past date expiring six months period or the future date causes dishonour of a
cheque.
ii. If the name of the payee is not mentioned in the cheque.
iii. When the amount is not mentioned, or mentioned in excess of the deposit with the
bank or the amount mentioned in words and figures do not tally with each other or
even, if not clearly mentioned.
iv. If the account number is not mentioned or wrongly mentioned.
v. If any condition is mentioned in the cheque like paying Rs. 1000 to my brother Ram
Babu to buy a new shirt for him, etc.
vi. If the signature of the drawer does not tally with the specimen signature and if there
is no signature in the places of rubbing and crossing.
vii. When the drawer due to some reasons stops the payment.
viii. In case of endorsement if it is not appropriate and usual.
ix. If the bank doubts over the payee, specially in case of large sum of money.
x. In case of overdraft when there is no sufficient assets available for the recovery of the
overdraft.
xi. When the bank has learnt of the insolvency, madness or death of the drawer.
xii. When a court issues an order to stop payment from the account of a certain drawer.
xiii. If the drawer has closed his account before presenting the cheque.

80 Aakar’s Office Practice and Accountancy - 10 Financial Institutions 81