General Knowledge · Banking Sector
When a cheque bounces due to a technical or operational error solely on the part of the paying bank (such as a system glitch), what is the legal liability of the bank toward the drawer?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Levy a penalty fee on the drawer's account
- 2Pay damages or compensation to the drawer for wrongful dishonor✓
- 3Pay the cheque amount to the payee out of its own funds
- 4Reverse the dishonor entry without any accountability
Correct answer
Pay damages or compensation to the drawer for wrongful dishonor
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