Sep 25, 2018

What is Post dated cheque, PDC?

A Post Dated Cheque (PDC) is a cheque that bears a date that is later than the present date. Hence, a cheque drawn on September 23, 2018 but dated September 30, 2018 would be a PDC. A PDC cannot be paid / honored prior the date that appears on the face of the cheque.
Significance of Post Dated Cheque PDC:
Banks / Financial Institutions often demand PDC’s as security from Borrowers against their debt servicing obligation i.e. equivalent to total borrowed Loan or equated monthly installments.
While issuing a cheque, Borrowers should immediately make a provision in their bank accounts for meeting such liability on the dates of the cheques. If the cheques are duly presented and dishonored, the Borrower may become liable for initiation of criminal action in terms of Section 138 of the Negotiable Instruments Act, 1881 and the payee may initiate legal proceedings against them.
Directives of Reserve Bank of India:
The Reserve Bank of India has firmly advised all lending banks to refrain from accepting PDC at all locations where Electronic Clearing Service (ECS) is active. At such centers, borrowers will be required to provide their bank with mandates for debiting their accounts with the amounts payable on due dates.
Country Specific:
Every country has its own methods for clearing Post dated cheque. There is no universal Law for this kind of system. Some of the Countries allow payment against post dated cheques before the date written on the cheque.

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