Duties of paying banker
(a) Prescribed form: Before payment, the paying banker must ensure that the cheque presented must be in prescribed form. The banker has every right to dishonor a customer’s cheque if they are not submitted in the prescribed form.
(b) Sufficient funds: The paying banker must pay the cheque if there is sufficient balance in the account of the drawer. If the funds are not enough, the cheque cannot be honoured.
(c) Genuine Payee: Before payment, the paying banker must ensure that the payee is genuine.
(d) Material Alternation: Materially altered cheque should not be honoured by the banker as such alteration is done without the knowledge or consent of the drawer.
However, such a cheque can be honoured if the alteration is confirmed by the drawer by affixing his full signature at the place of alteration.
(e) No payment if restriction imposed: The paying banker should not pay the cheque if there is restriction imposed on the payment by the drawer or by the law.
(f) Payment on behalf of customer only: Another important duty of a paying banker is to pay on behalf of his customer of the bank and he has account in the bank.
(g) Drawee’s signature: The signature of the drawer or his authorised agent should agree or tally with the signature on the cheque. Only if the signature tallies, the banker has the right to debit the customer’s account.
(h) Payment through bank account only: The paying banker should not make payment of crossed cheques over the counter of the bank.
(i) Must be presented within reasonable time: The paying banker must pay the cheque when it is presented within reasonable time and during banking hours.
