Indian institute of banking & finance jaiib module (A & B) legal aspects of banking operations thursday 17 april 08 t m c vasudevan

73..When the customer’s signature on the cheque is forged there is no mandate to the bank to pay. As such a banker is not entitled to debit the customer’s account on such forged cheque.

.. The drawee of a cheque having sufficient funds of the drawer in his hands properly applicable to the payment of such cheque must pay the cheque when duly required to do so, and, in default of such payment, must compensate the drawer for any loss or damage caused by such default.

• 74.. “Payment in due course” means payment in accordance with the apparent tenor of the instrument in good faith and without negligence to any person in possession thereof under circumstances which does not afford a reasonable ground for believing that he is not entitled to receive payment of the amount therein mentioned.

• 75.. A cheque has been received by the drawee bank in local clearing. At that time the account has clear balance to meet the cheque amount. However, it has been noted that the Words and Figures differ. The cheque contained Rs Eleven thousand one hundred and eleven in words but in figures read as Rs.1111/- Bank has to

• a. Make the payment

• b. Dishonour the cheque

• c.. Make payment for only Rs.11111/- as per words

• d.. Act as a prudent banker

• 76..A cheque has been received in clearing on 27th of this month bearing the date as 27th of three months ago. The cheque to be returned on the grounds

• a. Stale Cheque

• b.. Ante Dated Cheque

• c.. Not to be returned

• d.. Post Dated

• 77..A cheque has been received for collection. The Collecting banker has given his necessary certificates on the reverse of the cheque, which had more than two endorsements.

• a. It is the responsibility of the collecting banker to verify the regularity of endorsements

• b. It is not the responsibility of the paying banker to verify the regularity of endorsements

• c.. The Collecting bank as well as the paying bank are responsible to verify the regularity of endorsements

• d.. It is the duty of paying banker to verify the same to ensure payment in due course

78.. M has issued a cheque favouring V for Rs.6789/- The cheque has been otherwise in order and the account has enough balance.

• A.. The Collecting Bank will refuse payment

• B.. The Collecting Bank will receive payment

• C.. The Drawer’s Bank will not make the payment

• D.. The Drawee Bank will not make the payment.

• 79.. A cheque has been received by the drawer’s banker. On scrutiny it has been observed that the word bearer was altered into order by striking the bearer and writing over it as order. The drawer has signed only the cheque.

• a.. The drawee bank need not make payment.

• b.. The paying banker will be in order to return the same

• with a reason Material alteration requires drawer’s

• authentication

• c.. The above is not a material alteration.

• d.. The responsibility lies with the collecting banker and not

• the paying banker.

80.. After paying a cheque ,it has come to t he notice of the bank that one of the endorsements has been forged.

• A.. The paying bank is protected

• B.. It is a payment in due course

• C.. If endorsements are regular he gets protection

• D.. All of these

81..Which cannot be transferred by way of an assignment

• A.. The right on receivables

• B.. The right over a Term deposit of the Bank

• C.. The right over an Life Policy

• D.. None

82.. A cheque has been paid bearing a visible alteration on the payee’s name. The bank

• A.. Will get protection under Sec10 of NI Act 1881

• B.. Will get protection under Sec89 of NI Act 1881

• C..Will get protection under both these sections

• D..Will not get protection under both these sections

83..As per Section 89 of NI Act,1881 a bank can seek protection only if there is a material alteration in the cheque and does not appear to have been altered.

• A.. The above is correct

• B.. The above is in correct

• C.. The material alteration will not alter the position.

• D.. The material alteration will to some extent alter the position.

84.. Bank W opened an account 18 months ago. The bank had obtained the signature of an existing account holder of another branch in the application form. They opened the account based on the same. When the banker collected a demand draft on which the payment was released and also parted the amount. After few days, the bank came to know that the said demand draft was so altered as to place of payment as well as amount.

• A.. The Collecting bank will get protection.

• B.. The Paying bank will get protection

• C.. The Collecting bank will be held responsible

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