Stop-Payment Instructions and Requesting a Statement of Account

When a Company Needs to Stop Payment of a Cheque

A company may need to instruct its bank not to honour a cheque it has already issued in a number of genuine situations: the cheque has been lost or misplaced before reaching the payee, it was issued by mistake (a wrong amount or a wrong payee), the underlying transaction has been cancelled or disputed, or a post-dated cheque needs to be withdrawn before its date arrives. Whatever the reason, the instruction must reach the bank before the cheque is presented for payment — a stop-payment instruction given after the cheque has already been paid is of no use.

Essentials of a Stop-Payment Letter

A stop-payment letter must give the bank every detail it needs to identify the exact cheque, and nothing less will do:

1. The company's account number.
2. The cheque number (and, where several cheques are affected, the full range of numbers).
3. The date on which the cheque was issued.
4. The amount of the cheque.
5. The name of the payee in whose favour the cheque was drawn.
6. The reason for stopping payment (loss, error, dispute, or withdrawal of a post-dated cheque) — stated honestly and briefly.
7. A clear request that the bank confirm in writing that payment has been stopped, and a note of any charges the bank may levy for the instruction.

Specimen Letter — Stop-Payment of a Cheque

DECCAN TRADERS LIMITED

Registered Office: Laxmi Chambers, Shivajinagar, Pune – 411005

CIN: U51900MH2010PLC198765

Date: 9th September

The Manager

Bank of India

Shivajinagar Branch

Pune

Dear Sir/Madam,

Sub: Stop payment of Cheque No. 442110 — Account No. 62310045890

We wish to inform you that Cheque No. 442110, dated 2nd September, for ₹48,500, drawn on our above account in favour of M/s. Vishwas Hardware Suppliers, has been misplaced before it could reach the payee.

We request you to kindly stop payment of the above cheque with immediate effect and to ensure that it is not honoured if presented at any of your branches. Please confirm to us in writing, at the earliest, that payment of this cheque has been stopped, and advise us of any charges payable for this instruction, which we shall settle promptly.

Thanking you,

Yours faithfully,

For Deccan Traders Limited

(Meenal Kulkarni)

Company Secretary

This letter identifies the cheque completely (number, date, amount, payee), states the reason honestly, and asks for written confirmation — exactly what a bank needs to act without any ambiguity.

Requesting a Statement of Account

A company regularly needs a Statement of Account from its bank — most importantly to prepare the Bank Reconciliation Statement (already studied in Book-Keeping and Accountancy) by comparing the bank's own record of the account against the company's cash book, but also for audit, for tax filing, or simply to check the account's running balance over a period.

Specimen Letter — Request for a Statement of Account

KONKAN AGRO INDUSTRIES LIMITED

Registered Office: Plot No. 14, MIDC Industrial Area, Ratnagiri – 415612

CIN: U01100MH2015PLC123456

Date: 4th April

The Manager

Bank of Maharashtra

Ratnagiri Main Branch

Ratnagiri

Dear Sir/Madam,

Sub: Request for Statement of Account No. 60112233445 for the year ended 31st March …