Banking · Negotiable Instruments Act
Consider the following statements regarding the responsibilities and protections of a paying banker: Statement 1: A paying banker has a statutory duty to honor customer cheques provided there are sufficient funds, the cheque is technically in order, and there is no legal bar (like a garnishee order). Statement 2: A payment in due course under Section 10 requires following the apparent tenor of the instrument, in good faith, and without negligence. Statement 3: If a customer informs the bank about the loss of a blank signed cheque leaf, the bank must stop payment against that specific cheque number; failure to do so makes the bank liable. Which of the following statements is/are correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Only Statement 1 is correct.
- 2All Statements 1, 2, and 3 are correct.✓
- 3Only Statement 2 and Statement 3 are correct.
- 4Only Statement 1 and Statement 2 are correct.
Correct answer
All Statements 1, 2, and 3 are correct.
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