Where a customer by a letter has advised the bank directing the banker not to honor/pay a particular cheque such a letter is called _______.
Where a customer by a letter has advised the bank directing the banker not to honor/pay a particular cheque such a letter is called Stop payment letter.
A Stop Payment Letter is a written request from a bank customer to the bank to stop payment on a specific cheque or group of cheques that the customer has issued.
A Stop Payment Letter is usually sent by a bank customer when they have issued a cheque that they later want to cancel, for various reasons such as lost or stolen cheques, payment disputes, or errors in the amount or payee information.
The Stop Payment Letter directs the bank not to honor or pay the cheque if it is presented for payment.
In response to a Stop Payment Letter, the bank will place a "stop payment" order on the specific cheque or group of cheques requested by the customer.
This means that if the cheque is presented for payment after the stop payment order has been placed, the bank will not honor or pay the cheque, and it will be returned to the presenting party as a dishonored or bounced cheque.