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Banking Term: Dishonour of Cheque

Find important banking term that is useful in upcoming banking exam.

May 28, 2015 14:29 IST
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Banking Term: Dishonour of Cheque

Non-payment of a cheque by the paying banker with a return memo giving reasons for the non-payment. Default Risk: The possibility that a bond issuer will default ie, fail to repay principal and interest in a timely manner.

The bank should pay the amount mentioned on the cheque as soon as it is presented. If the amount of cheque is paid by the bank to the payee, the cheque is said to be honored. If the bank refuses to pay the amount of cheque, then the cheque is said to be dishonored.

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