The PDC Full Form is Post Date Cheque.
A Post Date Cheque is issued by a payer for a future date, and the payee can release the amount by presenting it on the due date.
A cheque is a financial instrument that allows you to transfer your funds, pay for the services, etc. When a cheque is issued, it acts as an order to your bank to transfer a certain amount of funds to the payee from your bank account. When a cheque is written with a due date, it is termed as a Post-Date Cheque. To quote in simple words, a Post-Dated Cheque is drawn for a future date and not on that date on which it is drawn. A PDC also assists to make a transaction on a future date.
How To Issue A Post-Dated Cheque?
A Post-dated cheque is always issued by Payer, it is a negotiable instrument issue for a future transaction. For example, a manufacturing unit is in urgent need of raw materials to complete an order but has a shortage of funds. In this case, the owner decides to draw a Post-Dated cheque for the raw material seller, with a due date after a month. In this case, the owner of the manufacturing unit can smoothly continue the production, and the raw material seller is also relieved they will receive the payment in the future.
What Are The Possible Reasons To Issue A Post-Date Cheque?
There are two major reasons to issue a Post Date Cheque:
- When having an insufficient balance
Generally, people issue a Post Dated Cheque, when they have insufficient balance to clear the amount liable.
- When the payments are delayed purposely
In certain circumstances, the drawer may want to purposely delay the payments or to make a payment on a specific date. This could be a personal understanding of the payer and the payee.
What Happens If a Post-Dated Cheque Bounces?
If a Post Dated cheque is bounced, then the payee or the person to whom the payment has to be made has a right to take legal actions and send a notice to the defaulter. If the defaulter agrees to pay after receiving a notice then the payments will be cleared in 15 days maximum. But if the defaulter is refusing to pay, then the payee has to file a court case that can take up to 8-10 months to resolve.
Can We Release a PDC Before The Due Date?
In countries like America, Canada, and the UK, the banks generally release the payment if the recipient deposits the cheque, even before the due date. But in countries like Australia and India, the banking system waits for the due date and then only clears the payments.
For How Much Time A Post-Dated Cheque Is Valid After A Due Date?
A Post date cheque comes with validity for payments even if the payee misses the due for payment. According to different banking regulations, the validity period differs in different countries.
|India||The validity period lasts up to three months|
|USA||The validity period lasts up to six months|
|Singapore||The validity period lasts up to six months|
|Australia||The longest validity period, for up to 15 months.|
|China||The lowest validity period, for up to ten days.|
|Canada||The validity period lasts up to six months|