When Banker Can Refuse Payment 🛑

A banker is bound to pay cheques, BUT there are situations where he MUST or CAN refuse payment.

1. Insufficient Funds ("Funds Not Arranged") 💸

• Balance is less than cheque amount.
• Rule: Bank is NOT bound to pay part amount.
• Memo Reason: "Insufficient Funds".

2. Stop Payment Order ✋

• Customer (Drawer) instructs bank NOT to pay.
• Reason: Cheque lost, stolen, or dispute with payee.
• Memo Reason: "Payment Stopped by Drawer".

3. Garnishee Order / Attachment Order ⚖️

• Court Order attaching the customer's account (freezing funds).
• Bank cannot pay out of attached funds.
• Memo Reason: "Account Attached by Court Order".

4. Death of Customer ⚰️

• On receiving Notice of Death.
• Bank stops all payments from account immediately.

5. Insolvency / Insanity 🤪

• If customer is declared Insolvent (Bankrupt) or Insane (Lunatic).
• Contractual capacity ends.

6. Stale Cheque 📅

• Cheque presented after 3 months of date.
• Memo Reason: "Out of Date / Stale Cheque".

7. Post-Dated Cheque 🗓️

• Cheque presented before the date written on it.
• Memo Reason: "Post Dated Cheque".

8. Material Alteration ✂️

• Cutting/Overwriting not signed by drawer.
• Chemical alteration visible.
• Memo Reason: "Alteration requires full signature".

9. Signature Mismatch ✍️

• Signature doesn't match specimen.
• Memo Reason: "Drawer's signature differs".

10. Account Closed 🚪

• Account already closed.
• Memo Reason: "Account Closed".

Quiz Time! 🎯

💡 Final Wisdom: "A banker is a watchdog. He pays when everything is right, but bites (returns) if anything smells wrong!" 🐕🛑

Next up: Wrongful Dishonour - What if bank refuses by mistake? 😱