SPECIAL TYPES OF INDIVIDUAL CUSTOMERS
• The Banker must ensure that the customer is competent to contract
• Account opening form should be filled in all respects by the account holder
• Banker should obtain his specimen signature for verification in future
• Banker should issue a cheque book to the customer indicating his account number
• Pay-in-slips for making deposits
• Banker should obtain standing instructions for operation of the account
• Purpose: to identify the person for whom the account is being opened.
• At present, all accounts, whether current, savings or fixed, have to be introduced
• Who can Introduce: Existing account holder, A confirmed employee of the bank, A locally well-known person, another bank
• Now it can be through ID Cards, passports etc.
• Safeguard against inadvertent overdraft
• Section 13 of the Negotiable Instruments Act 1881 states that Promissory Notes, Bills of Exchange and Cheque payable either to order or to bearer are negotiable instruments.
• Cheque: Section 6 of the N.I.Act defines Cheque as " A Bill of Exchange drawn on a specified banker and not expressed to be payable otherwise than on demand"
• Bill of Exchange: Section 5 of N.I.Act defines BoE as " an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money to a certain person or to the order of that certain person or to the bearer of the instrument
• Promissory Note: is an instrument in writing containing an unconditional undertaking, signed by the maker, to pay a certain sum of money only to, or to the order of a certain person, or to the bearer of the instrument.
• Monetary nature and Certainty
• Negotiable Instruments are easily transferable- Transferability does not make an instrument negotiable
• Transferable by delivery...