A Post Dated Cheque (PDC) is a cheque that bears a date that is later than the current date. Thus, a cheque drawn on January 07, 2016 but dated January 31, 2016 would be a PDC. A PDC cannot be encashed prior the date that appears on the face of the cheque.
Uses of Post Dated Cheque PDC
Banks and financial institutions often demand PDC from Borrowers for their debt servicing obligation i.e. payment of instalments of principal and interest or equated monthly instalments.
When such cheques are issued, 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 dishonoured, the Borrower may become liable for initiation of criminal action in terms of Section 138 of the Negotiable Instruments Act, 1881.
Instructions of Reserve Bank of India
The Reserve Bank of India has categorically advised all lending banks to refrain from accepting PDC at all locations where Electronic Clearing Service (ECS) is operational. At such centres, borrowers will be required to provide their bank with mandates for debiting their accounts with the amounts payable on due dates.
Depending on Each Country
Every country has their own methods for clearing Post dated cheque. There is no universal Law for this kind of system. Certain countries allow to encash post dated cheques before the date written on the cheque.
