What is pdc and spdc?

PDC stands for Post dated cheque. Is it safe to handover SPDC (security post dated cheques) cheques that are. Any unbanked/unused cheques of the Borrower(S) as issued in favour of FICCL with regard to the loan and presently in custody of FICCL will be cancelled. In banking, a post-dated cheque is a cheque written by the drawer (payer) for a date in the future. How is Security Post Dated Cheque (banking) abbreviated? SPDC stands for Security Post Dated Cheque (banking). In a effort to give electronics payments a push Reserve Bank of India (RBI) today asked banks not to accept post dated cheques (PDCs) and.

It is a standard banking practice in some countries to request post-dated checks for the retail Loan repayments. When Loan are sanctioned, the lending institution collects post-dated checks in advance from the Loan recipient - at times for the full tenor of the Loan . The main reason for the practice of seeking post dated checks by banks is that it is far quicker for the banks to recover money that is due in a cheque dishonor case than in a regular civil case for recovery of Loan dues.

Post dated checks can also be used for payment in the realization for the Loan . Security checks are used only when the account becomes non-performing.

Managing accounts using post dated checks is very complex and important, as it has significant bearing on the servicing operations. If the PDCs due for clearing are not sent as required, the repercussions are huge. The lending institution loses its payment from the customer and may levy penalties such as late fees and insufficient funds charges which can lead to customer dissatisfaction. Hence, the utmost care should be taken while servicing the Loan accounts using PDC. The PDC process begins with the sorting of checks received from various account holders. They are segregated by Loan product and location before being vaulted in conduits at the centralized location or PDC center. This sorting enables the lending institution to quickly retrieve the PDCs with relevant date and send them for clearing.

The Post Dated Cheques screen is opened from the Servicing master tab’s Post Dated Cheques link and contains the following tabs in its link bar:

The PDC Entry link opens the PDC Entry screen which enables you to record details about the post dated checks collected from customer.

When post dated check is processed by the PDC batch, the status changes to PROCESSED. All the processed checks will then be picked by the Payment Batch and processed. After this, the system posts s payment transaction on the Payment screen’s Payment Entry tab.

The View Options section enables you to view PDC batches by status (Open, Post, Void, and All). You can choose whether the PDCs from the customer are for a single Loan account or for multiple Loan accounts in the same bank. Once you enter the Loan account number of the customer in the PDC Batch section, The system displays all Loan accounts pertaining to the customer.

The information has to be captured to facilitate the inward sorting i.e. sorting the cheques by Loan product group and location and then vaulting them in boxes placed in the vaults at the PDC center and subsequently send them for clearance on the day the payment is due. Usually the PDCs are sent for clearance a few days before the actual due date.

Information maintained here can be viewed at Customer Service > Account Details > Contract Information > PDC sub tab.

After the batch has been created, click POST in Action section to post the batch of PDCs to Loan account. You can also click VOID in the Action section to cancel the PDC entry on a Loan account.

To view the PDC Entry section

A brief description of the fields is given below:

A brief description of the fields is given below:

Once the PDC batch is posted, an entry appears in Post Dated Checks section on the Customer Service screen’s Payment Mode tab, with OPEN status.

The status changes to PROCESSED when post dated check is sent for clearance on the pre-processing day and the payment is received. At that time, a payment transaction is posted on the Payments screen’s Payment Entry screen.

The PDC Maintenance tab opens the PDC Maintenance screen which enables you to modify check details for a specific account. You can either use view options to filter the PDC details by status or search the details using Query By Example option. The Edit button enables you to modify docket number, change status, and to add comments.

To view the PDC Maintenance screen

It won’t be wrong to say that virtually everyone knows what a cheque is, except for millennials perhaps. It’s not their fault, though, as digital payments are the most popular method of payment in this age of technology due to which cheques are used quite less for a deposit or withdrawal of money.

This article addresses the concept of cheques, Post-dated Cheques (PDC) and everything related to it. Let’s lay the foundation by understanding first what a simple bank cheque is.

A cheque is defined as an instruction to the bank asking to pay a stated sum from the owner’s account to the cheque presenter or drawer. Cheques are written or printed in a specific format and in a form that is not easily replicable.

The respective banks print the cheques, and in some cases, customize them with the name or account number of the person holding an account with the bank. A sample cheque from the State Bank of India is shown below:

Before we dive into the details about Post-dated Cheques, let’s look at the components or parts of a cheque.

As you can see in the image of a sample cheque above, several blanks need to be filled in before you send the cheque to be honoured by the bank.

Also Read: Learn All Necessary Information About Cross Cheques

With the concept of cheques now behind us, it should be much easier to understand the concept of Post-dated Cheques.

So, what is a PDC cheque? Post-dated cheques are normal cheques with a future date written on them. The cheques cannot be honoured by the banks before the date mentioned on the cheque.

Post-dated cheques, like normal cheques, have a validity of 3 months from the date of issuance. The national bank of India, RBI (Reserve Bank of India), has reduced the validity period of all cheques from the previous 6 months to 3 months, effective April 1, 2012.

However, there is a small technicality. The 3 months are not counted in the number of days, but the date of issuance. For example, if the cheque was issued or is payable on 01 Jan 2023, the cheque will be valid till 31st of Mar 2023, irrespective of the number of days in between.

Post-dated cheques are usually issued in one of the below cases.

Section 138 of the Negotiable Instruments Act applies to cheques and post-dated cheques alike. Under Section 138, Post-dated cheques should have an amount written with a future date for withdrawl. There have been incidents where blank post dated cheques have been issued, and the courts have promptly rejected these as the cheques become a bill of exchange only if a certain amount is mentioned on the post-dated cheque.

It is important to note that a bounced or dishonoured cheque is considered a criminal offence, punishable by a jail term or fines under section 138 of the Negotiable Instruments Act.

Under the provisions of the Negotiable Instruments Act, the legal penalty for the dishonour of a post dated cheque is:

As per the provisions of section 138 of the Negotiable Instruments Act, a legal notice should be issued within 30 days of the date the cheque bounced or was dishonoured.

In the absence of a valid response from the respondent, the concerned party must file a case within 45 days from the date of the legal notice.