Banking · Negotiable Instruments Act
A collecting banker collects a cheque for a customer that is marked with a special crossing to another bank. The collecting banker fails to notice this discrepancy while crediting the proceeds to the customer's account. What is the legal consequence regarding statutory protection under the Negotiable Instruments Act, 1881?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1The banker is protected under Section 128 provided payment was received via cheque truncation system.
- 2The paying banker becomes primarily liable while the collecting banker is liable only if funds are withdrawn.
- 3The banker loses statutory protection under Section 131 because collecting a cheque specially crossed to another bank constitutes negligence per se.✓
- 4The banker is protected under Section 131 if it proves the customer has a long-standing reputation of integrity.
Correct answer
The banker loses statutory protection under Section 131 because collecting a cheque specially crossed to another bank constitutes negligence per se.
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Banking?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Negotiable Instruments Act MCQs →Want more practice questions on Negotiable Instruments Act?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Banking · Negotiable Instruments Act