Legal Question in Banking Law in India

Can a nationalised bank in india pay cash to a bearer cheque (say for Rs. 1,00,000/=) issued by a private limited company to another private limited company and if yes, what are the procedures to be followed by bank before making payment


Asked on 4/30/14, 11:24 pm

2 Answers from Attorneys
Fca Prashant Chavan Expert Edge LLP

01.05.2014

Dear Sir / Madam,

As per prevailing Reserve Bank of India guidelines, no cash payments are supposed to be made on a bearer cheque exceeding Rs. 50.000/- (Rupees Fifty Thousand Only) per transaction. Any payment above Rs. 50,000/- is supposed to be made by A/c payee cheque / DD only. Moreover, the PAN Number of both the parties are required to be mentioned and taken note of by the paying Bank.

Regards,

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Answered on 5/01/14, 6:22 am
J. Radhakrishnan independent Practice

If the cheque is in favour of a company for more than Rs.50'000/- i even if it be bearer cheque it has to be got credited to the payee's account and the payee's authorised representative can draw a cash cheque for withdrawal in cash.

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Answered on 5/01/14, 6:35 am


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