Question

What are the precautions to be taken by the paying banker and collecting banker?

Answer 1

Precautions of payment from the bank is that the bank should honour the customers cheque payment when presented to the bank without delay as it is obliged the rules of that bank.The collecting bank has a duty to obey and accept the customers cheque with the availability of money in the bank

Answer 2

The precautions that need to be by the paying banker while making the cheque is to make sure whether:

• The cheque is open or crossed

• If it is open payment can be made to payee across the counter

• The cheque should be on a proper form

• The cheque should be presented at the right place

• The date of the cheque should be correct

• The words and figures should match on the cheque.

Explanation:

• The paying banker is the one who is holding the account and is to draw the cheque from his account to be paid to the payee or the collecting banker.  

• The cheque should be in a proper state and it is important for the banker to check whether the cheque satisfies all the necessary requirements of a normal cheque.  

• The cheque given by the paying banker should be available in a printed form.

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