Who is a paying banker?
Paying banker is a banker, who actually pays a cheque to his customer or to the order. of his customer. For example, a customer draws a cheque on his banker.
What are the roles of paying banker?
The paying banker is responsible to his customer and is under a duty to make payment of the cheques to the right persons in accordance with the instructions of the drawer. If he dishonours the cheque wrongfully or honours the cheques carelessly and negligently he subjects himself to heavy liabilities.
Who is a paying banker state the statutory protection given to a paying banker?
In case of an order cheque, Section 85(1) provides statutory protection to the paying banker as follows: “Where a cheque payable to order purports to be endorsed by or on behalf of the payee, the drawee is discharged by payment in due course”. However, two conditions must be fulfilled to avail of such protection.
What are the precautions to be taken by a paying banker?
Precautions when using cheques
- Check that the account has sufficient funds available to pay the cheque;
- Check that the cheque is within the validity period printed on the cheque book;
- Observe the pre-printed mentions on the cheque;
- Write only in the spaces that are to be filled in, without going outside these spaces;
What is collecting banker How is it different from paying banker?
1. A collecting banker is one who undertakes to collect the amount of a cheques & bills for his customer from the paying banker. 2. A banker is under no legal obligation to collect cheques drawn upon other banks for a customer.
What are the rights and duties of a collecting banker?
The Following are the rights and duties of a collecting banker.
- Cheque crossed generally be paid only to banker.
- A cheque crossed specially should be paid only to through banker.
- Second special crossing in favour of the banker.
- A banker cannot ignore the crossing.
What is the statutory protection available to the collecting banker?
Statutory protection is available to a collecting banker when he receives payment in good faith and without negligence. The phrase in “good faith” means honestly and without notice or interest of deceit or fraud and does necessarily require carefulness. Negligence means failure to exercise reasonable care.
What are the precautions to be taken by the paying banker?
What are the duties and responsibilities of a banker in the collection of a cheque?
The duties and responsibilities of a collecting banker are discussed below:
- Due care and diligence in the collection of cheque.
- Serving notice of dishonor.
- Agent for collection.
- Remittance of proceeds to the customer.
- Collection of bill of exchange.
Can you give the meaning of collecting banker?
A Collecting Banker undertakes to collect cheques, drafts, bills, pay orders, traveller’s cheque, Letter of credit, dividend warrants, debenture interest etc, on behalf of the customer.
What does it mean when you ask the bank for a special clearance?
In the absence of the paying bank notifying the deposit bank of the “special clearance” of the cheque, for example, following a request from the deposit bank, the funds become available after the passing of an agreed “clearance period”, commonly three business days, when the depositor’s account is described as …
Is it illegal to cancel a cheque?
A It is dangerous to stop a cheque unless you are absolutely sure you can prove the supplier is at fault and is not entitled to any of the amount shown on the cheque. This is because, technically, there is no defence to stopping a cheque.
What are the various types of crossing of cheque?
Types of Cheque Crossing
- Crossing a Cheque.
- General Cheque Crossing.
- Special Cheque Crossing.
- Restrictive Cheque Crossing.
- Not Negotiable Cheque Crossing.
What are the precautions to be obtained by banker before Honouring a cheque?
Before honoring the cheque, the banker must verify whether the cheque presented to him for payment is an open cheque of a crossed cheque. If it is an open cheque, he should make the payment across the counter. If it’s a crossed cheque, he should pay it only when it’s presented through a bank.
What are the effects of endorsement?
Endorsement thus Assures : i) Transfer of ownership in the instrument to the endorsee. ii) Right of further negotiation to anyone. iii) Gives the right of action to the endorsee against all parties whose names appear on the instrument. iv) That the instrument is genuine and all prior endorsements are genuine.