What is the meaning of “Exceeds Arrangement” in terms of Banking ?
Let us understand the meaning of “Exceeds Arrangement” in terms of banking.
To make the term more clear let us take the example. “Suppose you have received a cheque of Rs. 1 Lakh, and when you insert the cheque in bank for clearance, your cheque get returned by bank quoting the reason “Exceed Arrangement” Now what does it mean. It means that the other party does not have enough money in his account and has not “arranged” with the bank to borrow enough money to pay the cheque.
The reason “exceeds arrangements” is typically used by bankers to mean insufficient funds in an account, where the account has been given credit facilities (like cash credit/overdraft). You may send notice under section 138. In fact, you may send notices u/s 138 regardless of the reason of cheque return.