The Chief Executives/Presidents,
All Banks/DFIs,

Dear Sir/ Madam,

DISHONOURING OF CHEQUES & STOP PAYMENT INSTRUCTIONS

It has been observed that some banks give ambiguous reasons like ‘refer to drawer’ when a cheque is returned unpaid by them for insufficient balance or for any other reason. As a result, the beneficiary of the cheque is not in a position to take action against the issuer of the cheque under the provisions of relevant laws.

2. Similarly, banks while responding to the cheque “stop payment written instructions” from their customers, issue disclaimers for indemnifying themselves against breach of these instructions, which negates the very purpose of the stop payment instructions.
3. In order to discontinue the above practices, banks/DFIs are advised to (a) give a specific and clear reason for dishonouring the cheque, and (b) discontinue issuing of disclaimer for indemnifying themselves against any breach of stop payment instructions from their customers.
4. Banks/DFIs are advised to comply with the above instructions meticulously. State Bank of Pakistan, during the course of regular inspections, would particularly check the compliance of the above instructions as a part of its consumer interest protection responsibilities. Non-compliance, thereof, will attract penal provisions under Banking Companies Ordinance, 1962.

Please acknowledge receipt.