EXCEEDS ARRANGEMENT
EXCEEDS ARRANGEMENT
IN SIMPLE WORDS WE CAN UNDERSTAND THE WORD EXCEEDS ARRANGEMENT MEANS LESS OR NO FUNDS IN THE CHEQUE DRAWER’S BANK ACCOUNT TO GET CLEARING.
BUT IN THIS CASE CHEQUE DRAWER BANK ACCOUNT ALSO HAS FACILITIES OF OVERDRAFT OR CASH CREDIT BUT IT IS EXCEEDING THE LIMIT.
SO CHEQUE IS DISHONOUR WITH A REASON EXCEEDS ARRANGEMENTS.
Contents of this post
THIS TYPE OF REMARK IS USED WHEN THE DRAWER IS GRANTED AN OVERDRAFT OR CASH CREDIT IF THE CHEQUE IS PRESENTED WHEN THE CASH CREDIT OR OVERDRAFT LIMIT IS EXCEEDED AND THERE IS NO DRAWING POWER MEANING THAT THE SECURITY MARGIN OF PLEDGED GOODS DOES NOT JUSTIFY.
FURTHER OVERDRAWING ON THE ACCOUNT IS NOT ABLE TO ALLOW.
EXCEEDS ARRANGEMENT IS AN ISSUE THAT ARISES WHEN AN ACCOUNT HOLDER SEEKS TO MAKE A PURCHASE OR CLEAR A CHECK THAT THEIR ACCOUNT CANNOT COVER WITH THE FUNDS AVAILABLE.
INSUFFICIENT FUNDS MAY LEAD TO PENALTIES THAT ARE TRIGGERED BY PAYMENT PROCESSING NETWORKS WHEN THEY SEEK TO OBTAIN FUNDS FROM A CARDHOLDER’S ISSUING BANK.
A (DRAWER) ISSUED A CHEQUE OF 20000 RS IN FAVOUR OF B (DRAWEE) FOR A DATE OF 31.03.2024. A PRESENTS THAT CHEQUE IN THE BANK TO GET CLEARANCE BUT AFTER PRESENTING THAT CHEQUE HE GETS THAT CHEQUE CLEAR IN THE BANK STATEMENT IN THE MORNING AND THE EVENING CHEQUE BOUNCES WITH A REASON (EXCEEDS ARRANGEMENT). IN THIS CASE, B WILL SEE TWO ENTRIES OF CREDIT AND DEBIT OF 20000 RS IN HIS BANK ACCOUNT STATEMENT.
“Exceeds arrangement” indicates that the amount specified on the cheque exceeds the available funds or arrangement agreed upon in the issuer’s account. Essentially, there isn’t enough money in the account to cover the payment.
If your cheque is returned for this reason, you should promptly contact your bank to understand the specific situation. It’s essential to rectify the issue by depositing sufficient funds into your account to cover the specified amount.
Yes, you can take steps to prevent this issue from occurring in the future. Ensure that you have enough funds in your account before issuing a cheque, and consider setting up overdraft protection or maintaining a buffer balance to cover unexpected expenses.
Yes, typically, banks will notify you if a cheque you issued is returned for any reason, including “exceeds arrangement.” You should receive a notification detailing the reason for the return and any associated fees, if applicable.
An Accountant, GSTP, GST blogger, Website Creator, SEO Builder & Co-founder of the website https://gstportalindia.in for the help of GST Taxpayers of India. Having a perfect accounting experience of more than 10 years in a Private Ltd Company.
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