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What is a "Stale Cheque" for the banker?

Accounting Financial Accounting Bank Accounting Transaction Banking Banking
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Question added by VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.
Date Posted: 2015/01/12
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Mir Mujtaba Ali
by Mir Mujtaba Ali , Internal Audit Manager , Confidential

Stale cheque is a cheque which  is not presented to the drawee bank within a time of6 months from the date of issuance  (some banks write the validity period on cheques).

Common wealth organization specify the time lag as15 months.

VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
by VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

When cheques have not been deposited into the Bank or not cleared within a specified time-frame, they are called Stale Cheques/Instruments. A stale cheque is not an invalid cheque, but it may be deemed 'irregular' bill of exchange which a banker may refuse to honor it unless its drawer reconfirms it paymeent either by inserting a new payment date or issue of a substitute cheque in lieu of the original.  The liability of payment of the proceeds cannot be terminated on non encashment of a cheque for the reason of it being a stale cheque.  It is always customary to issue a substitute cheque by the drawer without any kind of rejections/objections as the liability of payment never ceases over the issue of the cheque merely other than by means of its encashment in the prescribed ways.  

 

padmakumar pathiyil
by padmakumar pathiyil , Marketing Consultant , Management Consultancy

An out dated cheque.

Salah Othman Yousef Alshambaati
by Salah Othman Yousef Alshambaati , مدير ادارة الحسابات , شركة انفال الجديدة للتجارة والمقاولات

Agreed with the answer VENKITARAMAN

Malik Khalid Mahmood
by Malik Khalid Mahmood , Regional Finance Manager , Leosons International FZ LLC

Expired cheques

Deleted user

Very good answer Mr Venkitaraman

Tanveer Qureshi
by Tanveer Qureshi , Director , Qureshi Associates

If a cheque cannot present before drawee bank within stipulated time (six months after date of issue) it become stale,

FITAH MOHAMED
by FITAH MOHAMED , Financial Manager , FUEL AND ENERGY CO for transportion petroleum materials

I AGREE WITH ALL ANSWERS ......... 

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