Theory question 103
BankingCommerce 2 (theory)
(a) State five reasons that would make a bank to dishonour a customer's cheque.
(b) State five reasons countries introduce restrictions in foreign trade.
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(a) Any five: insufficient funds in the account; signature differs from specimen; words and figures differ; cheque is stale (over six months old); post-dated cheque; drawer has stopped payment (countermand); death, insanity or bankruptcy of the drawer; account closed or frozen by court order; alterations not signed; cheque mutilated or wrongly filled/irregular endorsement.
(b) Any five: to protect infant industries; to correct a balance of payments deficit; to raise government revenue; to prevent dumping; to protect jobs/reduce unemployment; to prevent importation of harmful goods; to conserve foreign exchange; for political/strategic reasons (e.g. sanctions); to encourage local production and self-reliance.
Keep cheque reasons specific (e.g. 'stale', 'post-dated', 'signature differs').