A customer named Rajesh has a personal savings account with your bank. He also has a mandate to operate the account of his elderly aunt, Mrs. Sarita. Rajesh approaches the bank with a check drawn on Mrs. Sarita's account, signed by him as the mandate holder, payable to 'Self.' He explains that the money is needed for Mrs. Sarita's medical emergency. Simultaneously, the bank receives a letter from Mrs. Sarita's son claiming that the mandate given to Rajesh was revoked two days ago by Mrs. Sarita verbally. The bank has not received any written instruction from Mrs. Sarita. How should the bank handle this?

Question

Accepted Answer

The bank must contact Mrs. Sarita immediately to verify her intent and should not process the check until her direct confirmation is obtained.

Answer

The bank should pay the check but only if Rajesh provides a medical certificate proving the emergency mentioned in his explanation.

Answer

The bank should stop the payment and freeze the account until written confirmation is received from Mrs. Sarita, as the son's letter creates a cloud of doubt on the mandate.

Answer

The bank should pay the check because a verbal revocation is not legally valid in banking practice, and the mandate holder still has the authority.

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