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    Question

    Under Section 25 of the Payment and Settlement Systems

    Act, 2007, when an electronic funds transfer (EFT) is dishonoured due to insufficiency of funds, within how many days must the beneficiary give written notice to the initiator demanding payment, after receiving information about the dishonour from the bank?
    A 15 days Correct Answer Incorrect Answer
    B 30 days Correct Answer Incorrect Answer
    C 45 days Correct Answer Incorrect Answer
    D 60 days Correct Answer Incorrect Answer

    Solution

    Explanation:
    Section 25(1) of the PSSA, 2007 creates an offence analogous to Section 138 of the Negotiable Instruments Act (cheque dishonour), but for electronic fund transfers. The section provides specific proviso conditions that must all be satisfied for the offence to be made out: ​ 1.    The EFT must have been initiated for discharge of a  debt or liability 2.    The EFT must have been initiated in accordance with  procedural guidelines  of the system provider 3.    The beneficiary must give a  written notice within 30 days  of receiving information about dishonour 4.    The initiator must  fail to pay within 15 days  of receipt of such notice

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