Banking and Cash Transactions

It is the application of funds. It would decrease the balance in bank account. The decrease in current assets means decrease in working capital and the decrease in working capital indicates that there is application of funds. Working capital is excess of current assets over current liabilities.

There wll be no effect on inflow or outflow of cash. Since the bills accepted by us are dishonoured on due date, no payment will be made to creditors. Hence, there will be no inflow or outflow of cash.

The term 'Illegal Tender' refers to a dishonoured or invalid financial instrument that cannot be legally tendered. Neither black money, mutilated cheque, nor dishonoured cheque individually captures this concept.

In respect of cheques lost in transit or in the clearing process or at the paying branch, the collecting branch should immediately bring the same to the notice of the account holder, so that the account holder can inform the drawer to record stop payment and can also take care that other cheques issued by him are not dishonoured due to non-credit of the amount of the lost cheques. If the cheque has been lost by the individual, he/she can inform the drawee bank about the same.

Section 131 in The Negotiable Instruments Act, 1881 Non-liability of banker receiving payment of cheque.— A banker who has in good faith and without negligence received payment for a customer of a cheque crossed generally or specially to himself shall not, in case the title to the cheque proves defective, incur any liability to the true owner of the cheque by reason only of having received such payment.

In a joint account, if one of the signatures is forged, then there is no mandate and banker cannot make payment.

The bank should obtain from the borrower the deposit receipt duly discharged by signing on the back of it across a revenue stamp and a memorandum of pledge authorising the bank to utilise the proceeds of the deposit on its maturity towards repayment of the loan.

In 2006, Reserve Bank of India announced the revised Banking Ombudsman Scheme with enlarged scope that included customer complaints on certain new areas, such as credit card complaints, deficiencies in providing the promised services even by banks' sales agents, levying service charges without prior notice to the customer and non-adherence to the fair practices code as adopted by individual banks. Bank customers can complain about non-payment or any inordinate delay in payments or collection of cheques towards bills or remittances by banks, as also non-acceptance of small denomination notes and coins or charging of commission for acceptance of small denomination notes and coins by banks.

Grounds of complaints pertaining to deficiency in any of the banking services such as:

Non-payment or delay in payment of cheques, drafts, bills etc. Non-issuance of drafts to customers Non-adherence to prescribed working hours by the branches Failure to honour guarantee or letter of credit Claims in regards to fraudulent withdrawals or fraudulent encashment of cheque or a bank draft Complaints for any of the accounts pertaining to delays, non-credit of proceeds to parties accounts Complaints for non-observance of RBI’s directives applicable to rate of interests on deposits or violation of directives on any other matter Complaints from exporters for delays in receipt of export proceeds, handling of export bills, collections of bills etc. 

Where, in the case of loss of demand draft, the necessary formalities as required by the rules of the bank are not complied with, the bank cannot stated to be deficient in service in not issuing a duplicate draft or canceling the draft and making cash payment to the purchaser (complainant). Also, in this case, B is not the consumer of the bank. Thus, he cannot indulge in given preceedings. Also, formalities are required to be done by N. 

Cheque shall be paid, like in other cases, as minors can withdraw the amount. However, minor account holder cannot issue/draw cheque favouring a third party. 

Crossing is a direction to the paying bank to pay the cheque to the payee, through a bank.

Bank is not liable if the details filled by the customer are incorrect. However, in the given case, bank is liable for damages as the error is from the side of the bank. So, the bank is responsible irrespective of the individual pointing out the error or not. 

The claimant is eligible to interest on balance lying in current account of the deceased, interest shall be paid at savings bank deposit rate from the date of death of the depositor to the date of payment (settlement of death claim). 

All of the above