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Banks may honour post-dated cheques

It was with interest that I read a correspondent's letter entitled Honouring Of Cheques Prior To Date Indicated. I presume that the correspondent is aware that the date mentioned on a cheque is the "issuing date".

Therefore post-dated cheques are not to be considered as such by banks and will be encashed or honoured on the day of presentation. By law cheques are "sight documents", meaning that they will be treated on at-sight basis irrespective of the date of issuance. Besides this, according to international law it is a criminal act to issue and or circulate a cheque which is not covered by sufficient funds.

The correspondent's arguments are seen totally from the wrong angle. Again, when issuing a cheque one must be sure to have sufficient funds on the account on the issuing date and not be hoping to receive in the meantime additional funds in order to cover the cheque. Banks used to tolerate the habit of post-dated cheques, however, by law they are obliged to honour/dishonour a cheque upon presentation. Generally speaking, the payee is to be responsible when issuing a cheque!

The other argument referring to the Central Bank of Malta's practice does not hold water. It is a known policy of the CBOM that government pension cheques payable with CBOM will only be cashed on or after the issuing date (not maturity date) of the cheque. It is more than logical and of common sense that these thousands of cheques have to be post-dated considering the time of posting and handling.

I hope that this is of satisfaction. Being a retired German banker I might be wrong unknowingly and I would like to refer the correspondent to the experts of the Malta Financial Services Authority.

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