Banking · Banker-Customer Relationship
A customer, Mr. X, maintains a current account with a bank. He issues a cheque for 1,00,000 rupees to Mr. Y. Later that day, Mr. X loses his phone and sends an email from a new device at 10:00 PM to the bank's official customer service ID requesting to stop payment of the cheque. The bank's branch opens at 10:00 AM the next day. The clearing department processes and pays the cheque at 10:30 AM before the branch manager reads the email at 11:00 AM. Mr. X sues the bank for the amount, citing the stop-payment instruction. Analyze the liability of the banker based on standard banking laws.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1The bank is liable because the countermanding of a cheque constitutes a revocation of the banker's mandate to pay, and the bank pays at its own peril once notice is available on its servers before execution.✓
- 2The bank is not liable because the customer failed to use the official mobile banking or net banking 'Stop Payment' feature, which provides an instant block.
- 3The bank is liable because the notice was delivered to the bank's server before the cheque was paid, and notice is deemed served as soon as it reaches the bank's system.
- 4The bank is not liable because a stop-payment instruction is only effective once the bank explicitly acknowledges it in writing to the customer.
Correct answer
The bank is liable because the countermanding of a cheque constitutes a revocation of the banker's mandate to pay, and the bank pays at its own peril once notice is available on its servers before execution.
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