Multiple choice

A bank receives a cheque for collection from its customer. Bank gives credit before collection of the cheque. It also allows the customer to withdraw the amount. In such case, the

  1. bank is holder

  2. bank is holder for value

  3. bank becomes holder in due course

  4. bank is representative of the drawer

  5. None of above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

(2) Legal term for an original or any subsequent holder of a negotiable instrument who has accepted it in good-faith and has exchanged something valuable for it, i.e holder for value.

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