Banking · Banker-Customer Relationship
A customer has issued a written instruction to his bank authorizing his business manager to operate his account. Later, the manager misuses the authority for personal benefit. Which of the following correctly defines this arrangement and the bank's responsibility?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1The arrangement is a Power of Attorney, and the bank is always liable for losses due to misuse.
- 2The arrangement is a Mandate, and the bank is not liable for misuse if the signatures and instructions were genuine.✓
- 3The arrangement is a Power of Attorney, and the bank is not liable for misuse if transactions were within apparent authority.
- 4The arrangement is a Mandate, and the bank is liable for losses due to misuse.
Correct answer
The arrangement is a Mandate, and the bank is not liable for misuse if the signatures and instructions were genuine.
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 Banker-Customer Relationship MCQs →Want more practice questions on Banker-Customer Relationship?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Banking · Banker-Customer Relationship