Question

Receiving deposit and lending money are two core functions of banks. They form the debtor-creditor relationship with the depositor, and this relation gets reversed with the borrowers. Banker customer relationship changes with the type of service they provide to the customers. By keeping in view, the different services provided by the bank briefly explain the following question:

How you will scrutinize the cheque as an agent of the customer when presented for encashment or collection on the cash counter.

Answer 1

Solution:

These cheques present for encashment or collection of cash from the counter are riskier and hence as an agent of the account holder banker needs to be more careful while clearing the cheque

Following steps are generally taken by the bank employee in the above case

1. First, verify the genuineness of cheque itself like cheque leaf must be valid and not outdated.

2. Amount mentioned in cheque is not above the maximum limit prescribed over the instrument (cheque)

3. The cheque must be filled in due order like date must be in proper formate ex. DDMMYYYY

4. The most important part is to verify the signature on the cheque with the account holder's signature present in the computer system of the bank.

5. Banker also verifies that balance in the account must be adequate to pay off the cheque amount.

6. In some cases, bank employees can ask for identity proof of the person who is collecting the cheque along with signature on the backside of the cheque of the person who is presenting the cheque on the counter. This precaution is observed where the amount is higher.

7. In the extreme case where bankers have doubts about the genuineness of signature or have any doubt on transaction then approach branch manager. Then the branch manager calls the account holder personally for further verification overcall.

Note:

This is advisable to issue account payee or double-crossed cheque as this method provides security in the way that the account in which amount is credited can be tracked easily in case of any discrepancy but this facility is not available in case of cheque present for encasement.