Thursday, July 3, 2008

Lesson learnt - what happen if bank account gone -ve balance

Recently, I've learnt a good lesson which cost me RM5, due to my bank account gone negative balance caused by miscalculation and wrong timing judgement. Luckily it was immediately discovered via Internet banking, and quickly rectified. If not it will cost more, and possibly will result in bounce cheque and penalty.

The story began when I discovered the troubled bank account balance has become RM-34.00 on 30 June. That was because it has a shortfall of RM29.00 and an immediate penalty "interest charged" of RM5.00 [indicator (2)].

The root cause:

I issued some cheques, calculated that the account will still have a balance of hundred over ringgit after all the cheques were cleared. However, I forgotten about a scheduled credit card payment with amount of hundred over ringgit [indicator (3)] which was slightly more than the remaining balance after all the cheques were cleared then.

I thought that would not be a problem, because I have another cheque banked in to the account, which suppose to be cleared on the same day [indicator (5)]. But due to "some technical problem" as explained by the bank's cheque clearing officer, that cheque clearance was delayed by one day, and hence causing my bank account to be in trouble with a negative balance.

To rectify the problem once discovered, I immediately transferred RM50.00 from my other account with the same bank to make the balance changed from the RM-34.00 back to RM16.00. Then, I quickly called up the bank, and was informed that one of my issued cheques [indicator (1)] did not have sufficient fund to clear out, and was advised to put in an additional RM100 to avoid that cheque from bouncing back. So I tranfered another RM100.00 to the account [indicator (4)].

The next day, I noticed 2 lines appeared in the statement [indicator (6)]. There was a "cheque repair credit" immediately followed by another "cheque repair debit". Luckily, that cheque [indicator (1)] still gone through and cleared.

Lesson learnt:

  • Always check for the "future payment" and "future transfer" sections for scheduled payment made earlier, to ensure the account balance is sufficient to draw out money from it.
  • Don't take for granted that the bank-in cheque will be cleared on time. The banked in amount can only be used after the cheque is cleared and the amount is made available to use in the account. Good news is, all the banks will use a new clearing system beginning 1 July 2008, which will shorten the time required to clear all the cheque transactions.


Anonymous said... Reply To This Comment

This had happened to my husband's account last time. Same situation and scenario like yours. But my husband's case was that the cheque was bounced and a fee was charged to his account (because "Effects not clear, in other words, the cheque was not cleared/available yet, thus his account has insufficient fund and he should not issue cheque so early).

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