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RESPONSIBILITY OF PAYING BANK
What is the primary duty of a paying bank when a cheque is presented for payment?
The paying bank must verify the genuineness of the cheque, ensure the drawer's signature matches, and confirm sufficient funds are available before making payment.
What is the paying bank's liability when it pays a cheque bearing a forged endorsement?
Bank is liable as it cannot debit customer's account validly.
Under what section of the Negotiable Instruments Act is a paying bank protected when it pays a crossed cheque in due course?
Section 128 of the Negotiable Instruments Act, 1881 protects a paying bank that pays a crossed cheque in good faith and without negligence.
Which section of the NI Act protects a paying bank that pays a bearer cheque in good faith?
Section 85(2) protects payment of bearer cheques in good faith.
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