It is a standard banking practice in some countries to request post-dated checks for the retail Line of credit repayments. When Line of credit are sanctioned, the lending institution collects post-dated checks in advance from the Line of credit recipient - at times for the full tenor of the Line of credit. The main reason for the practice of seeking post dated checks by banks is that it is far quicker for the banks to recover money that is due in a cheque dishonor case than in a regular civil case for recovery of Line of credit dues.

Post dated checks can also be used for payment in the realization for the Line of credit. Security checks are used only when the account becomes non-performing.

Managing accounts using post dated checks is very complex and important, as it has significant bearing on the servicing operations. If the PDCs due for clearing are not sent as required, the repercussions are huge. The lending institution loses its payment from the customer and may levy penalties such as late fees and insufficient funds charges which can lead to customer dissatisfaction. Hence, the utmost care should be taken while servicing the Line of credit accounts using PDC. The PDC process begins with the sorting of checks received from various account holders. They are segregated by Line of credit product and location before being vaulted in conduits at the centralized location or PDC center. This sorting enables the lending institution to quickly retrieve the PDCs with relevant date and send them for clearing.

The Post Dated Cheques screen is opened from the Servicing master tab’s Post Dated Cheques link and contains the following tabs in its link bar:

• PDC Entry Tab
  
• PDC Maintenance Tab
  
• Search Tab