Z, your customer, keeps his cheque book carelessly in his briefcase. The office peon steals a cheque leaf and very cleverly forges Z’s signatures which appear exactly similar to the signatures on record of the bank and obtains the payment of the cheque. Z claims the money back from the bank. Which of these options is true in the given scenario?

A bank is supposed to keep your money safe. Yet there are a number of instances of fraudulent withdrawal of money from bank accounts. While in some cases, such fraud takes place with the connivance of the bank staff, in others, the negligence of the bank staff results in clearance of forged cheques. Whatever may be the cause, the law is clear — the bank has to take responsibility for its action in clearing a forged cheque and refund the amount illegally withdrawn from the customer's account.