Question

b) The major duties of a banker are to honour the repayment obligation of his customer. Critically analyse
this statement.

Answer 1

It is the duty of the banker to honour the cheques(repayment obligation) of his customers but upto the amount standing to the credit of the customer's account.The bank is liable to pay the compensation to the customer,if it wrongfully refuses to honour the cheque.Further banker may refuse to honour the repayment obligation of his customer for reason such as;

i)Insufficient funds in the account of customer.

ii)Cheque is not properly drawn

iii)Cheque is received after receipt of notice of death,insolvency or lunacy of the drawer(customer) of the cheque.