Mathematics · Banking Law & Interest Calculations
A customer has an overdraft limit of Rs. 10,00,000. When the outstanding balance is Rs. 9,50,000 (Debit), the customer issues a cheque for Rs. 80,000. The bank wrongfully dishonours the cheque for 'insufficient funds' (since total available funds were Rs. 50,00,000 limit balance, wait - overdraft limit was 10,00,000 and 9,50,000 used, so 50,000 available). The court awards substantial damages of Rs. 20,00,000-equivalent loss/reputation compensation of Rs. 20,000 plus 12% per annum simple interest on the cheque amount (Rs. 80,000) for 3 months. Calculate the total damages awarded by the court.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Rs. 20,600
- 2Rs. 29,600
- 3Rs. 22,400✓
- 4Rs. 20,000
Correct answer
Rs. 22,400
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