Most Banks ask customer to give 3-5 cheques which are either postdated and with hefty amount.
The customer is told that as loans are paid back via ecs so its imp to take these cheque as a part of security.
The practice is true as if a customer doesn’t pay, the bank has to put that cheque and then file a report as per Indian law.
Now to check whether you are giving the right set of cheques and they aren’t misused, do the following
- All cheques must be ac payee.
- Cheques should be given in name of bank with ref to loan account.
- One should get a photocopy of these cheques and preserve these copies for your records.
- Once the loan is over, one should get these cheques back.
The Bombay High Court has held that if a blank post-dated cheque — which has been issued only as a “collateral security” for a loan — bounces, the debtor can not be prosecuted under the Negotiable Instruments (NI) Act.
You might find these relevant:
- American Express Credit Card Customer Care – American Express Customer Care Numbers
- Make SBI Card Payments through SBI Debit Card across any SBI
- RBI Rate cuts on 3-05-2013 and its effect on Home Loan | Personal loan | Car Loan
- LIC Housing Finance Ltd. Q4 Net Profit up by 25% to Rs. 316.16 cr
- LIC Housing Finance Assistant Results 2013 Roll Wise Declare
- Gold Rates in India | Today Gold Price | Live Todays Gold Rate
- Fedbank – Fedbank Financial Services Ltd. (FEDFINA) | Federal Bank Subsidiary
- List of Documents Required for home loan Business Persons/Self employed – FEDBANK
- HDFC Credit Card Reward Points Program | Details
- Best Tips For Tax Saving in 2013
Tags: collateral security, Security cheques, Security cheques taken by Banks
