Paying Banker
Paying Banker
A Banker who holds the account of the
drawer of the cheque and is obliged to
make payment, if the funds of the
customer are sufficient to cover the
amount of he cheque drawn or if
overdrawing facility is given to the
customer
Mandatory functions
PROPER FORM
PHYSICAL CONDITION
CROSSING
OFFICE OF DRAWING
DATE OF THE CHEQUE
TIME OF PRESENTATION
AMOUNT
MATERIAL ALTERATION
SIGNATURE OF THE DRAWER
ENDORSEMENTS
LEGAL RESTRICTIONS
1. COUNTERMANDING
2. DEATH
3. INSOLVENCY
4. LUNACY
5. GARNISHEE ORDER
SUFFICIENT BALANCE
Protection Available to Paying Banker
Banker ‘s Protection –
Negotiable Instruments Act
1881
Certain Sections of the Act
Protection
Section 85 Available to Paying Banker
(1) – regularity of endorsement- no
break in the chain of endorsement- paying
bank not concerned with genuineness
Section 85 (2) – All endorsements on a bearer
cheque are meaningless
Section 85 (a) – similar to sec 85(1) & sec
85(2) are available for a Bank Draft
Protection Available to Paying Banker
Section 89 – Cheque with material alteration
which is not visible with necked eye
Section 128 – for a crossed Cheque, if the
payment is in due course, the paying bank gets
protection
