A formal request made to financial institutions, especially banks, to either cancel a cheque, or an unprocessed payment is termed a stop payment of a cheque. The account holder usually issues this request and is enacted when the payment is unprocessed by the recipient. When the account holder gives a stop payment of a cheque order, they are required to pay a fee of ₹100. However, this amount differs depending upon the different policies of the bank.
There are various reasons to stop payment of cheques, such as human error while issuing a check or writing an amount to be paid or cancellations of services or goods. To submit a request to stop the payment of a cheque, you must either contact the customer care service executive or you can be done via internet or banking services. You can also physically visit the bank’s branch to submit a written application. Further, these stop payments of cheque requests expire when the bank does not find the cheque or payment.
Did you know?
Most banks charge account holders a fee of ₹1,149 to ₹2,681 for each stop payment order.
Also Read: Meaning and Need for a Cancelled Cheque
How to Stop a Cheque?
Stop payment is a request to stop cheque payment for a specific amount mentioned in the cheque unprocessed by the recipient from the account holder. An application or a written notice is submitted to the concerned financial institution, usually a bank, to stop a payment. However, there are some charges for the same depending upon the different policies of the bank or financial institutions that entertain these stop payments of cheque requests on a priority basis.
Reasons to Stop Cheque Payment
There are many reasons for stopping cheque payments, but the urgent need to stop these cheque payments usually arises due to three common reasons.
-
Insufficient Funds
When the account holder does not have a sufficient amount in their bank account to get the cheque cleared, the cheque bounces in most of these cases.
-
Lost or Misplaced
When the cheque is misplaced or lost due to any particular reason.
-
Human Error
One of the basic reasons is a human error when the amount on the cheque bears any mistakes.
The Modes of Requesting Stop Payments
The banks instruct three modes for requesting to stop payments or any other issue. These modes for stopping payment requests are
- As an account holder, you can submit an online request to the bank regarding the stop payments of cheques.
- You can also contact the customer care service helpline number of the financial institution to register the request.
- As an account holder, you can also personally visit the bank’s branch office to give a written request regarding the stop payment request for a cheque.
Online Service to Stop Payment of Cheque
Suppose you are looking for online services for stopping cheque payments, then as an account holder in every financial institution. In that case, you are provided with online services to register your complaints and requests. To stop cheque payments, you can follow the steps mentioned below for the online service.
- You must activate internet banking services with your bank account as an account holder.
- Then you have to get yourself logged in on the bank’s portal.
- After completing the above step, you must select the desired option from the options available, followed by submission of the request.
- There are internet applications provided by the banks, mostly so that customers can download and install the application to enjoy the banking services.
Stop Payment of Cheque Through Customer Service Helpline Numbers
Another method to stop the payment of cheques is through the customer services helpline numbers provided by the financial institutions for the convenience of the customers. All you are required to do is
- As an account holder, you can make a call followed by submitting the request to stop the cheque payment.
- Then your call will be attended by the customer service executive, and this executive will guide you through the entire process to register the request to stop the payment of the cheque.
- However, the executive might ask for your bank account details, including name, date of birth, account number, etc.
Stop Payment of Cheque by Visiting the Bank (Offline Process)
If you want to resolve this issue by visiting the bank, you can visit your bank’s branch office and then submit a written request to the related person and the reason you need to stop the payment of the cheque. You are also required to mention the following details of the cheque.
- Bearer’sBearer’s name
- Amount entered to be debited through cheque.
- Account holder’s details
- Cheque number
- Date of issuing the cheque
After receiving the stop payment requests, the bank ceases to have authority over the cheque. However, there are some additional charges you need to pay as an account holder. These charges depend upon the set of charges for the stopping payment of the cheque depending upon the amount mentioned in the cheque.
Also Read: Guide to Writing a Cheque in The Right Way
Legal Issues for Stopping Cheque Payments
There are some legal issues involved in stopping the payments or cheques. You can request this stop payment only under a few circumstances as mentioned above. It is necessary to inform the recipient of the cheque before placing a request to stop payments with a bank. The recipient can also make payments using any other mode of payment.
Stop Payment of Cheque Letter Format
If you want to request a stop payment, you must write a letter to the financial institution’s office. You must add the following details in your stop cheque payment application letter.
-
The name of the cheque recipient in whose name the cheque is issued.
-
The amount that is written on the cheque.
-
The number of the cheque.
-
Date of the insurance of the cheque.
When the organisation issues the stop payment of the cheque letter, you must check that the letter is printed with the company’s logo or letterhead. Along with these aspects, it is also necessary to have a seal on the letter for identification.
Stop Payment Letter Sample
Date
The Manager
Bank( Name of the bank)
Branch( Name of the branch of the bank)
Address ( banks address)
Subject:(the subject of your letter such as the request for the stop payment)
Respected Sir/Mam
This letter is written to submit a request to stop the payment of a cheque at your bank ( bank details such as bearing number and date). The cheque was issued in favour of (recipient’s name ) for the amount (the amount the cheque bears). This is because of the cheque (reason to stop the cheque payment). You are requested to discontinue the payment above with immediate effect kindly.
Further, please confirm receipt and the cheque cancellation at the earliest.
Thanking you,
Yours sincerely
Your name (Account holders name )
Signature (account holders signature)
Conclusion
A formal request to stop the cheque payment or cancel the payment before the cheque is processed. There are many reasons to stop the payment of cheques, but the most common is insufficient balance in the account holder’s bank account or if the cheque is lost or misplaced. You can register this stop payment of cheque request via online, offline processes, including internet or mobile banking, by contacting a customer care executive and physically visiting your bank’s branch. There are additional charges for stopping the payment of cheques depending upon the financial institution and its rules. However, these charges depend upon the cheque’s amount in most cases. If you want to request to stop the cheque payments by visiting the bank, you must submit a written application letter to stop payments or cheques at the bank.
Follow Legal Tree for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.