vpsingh 24 November 2017

Banks authority to debit account holder account

Hi Experts, MR A ( Payee) and M/s B &Co ( Drawer ) hold their bank accounts with same branch of bank in XYZ Bank Branch ( Drawee). MR A deposit a cheque received from MR B in his account amounting to 8000 INR The cheque is duely credited to the account of MR A and equivalent amount was debited from Mr B. Post this transaction , Mr A also presented a self cheque for withdrawing some amount let say 2000 Subsequent to credit of amount, after few days he found that his account was debited with the equivalent amount of cheque citing error n ommission by bank . Since the account of MR A was also short of 2000 as he has withdrwn such amount, he found out that an cash deposit of 2000 was made in his account by "unknown" source. During all this bank never informed or consulted MR A. Now , when bank is contacted , bank mentioned that MR B ( Drawer) had informed the bank "Post Debit / clearance " that such cheque was misplaced in transit . Bank also confirm that MR B has also informed about this to Bank in past about this Now bank says that they found that the rubber stamp present on the cheque presented by MR A was forged and had incorrect spelling of M/s B hence bank has debited the amount and returned it to account of M/s B nd Company. During all this instances, the sms notification of MR A were also supressed so that he could not get intimation of 1. Unknown cash deposit 2. Debit of INR 8000 Finally, in one of the correspondence , bank says that cleared the cheque in "good Faith" and "without proper procedural verification" Please advice 1. What is your opinion on banks authority based on the facts above 2. Should bank is liable to inform the payee in such case which they have not and as per which law ( if possible) 3. if bank was in possession of information, they never initiated a stop payment in M/s B and Co account. 4. Can good faith be an excuse to overlook professional responsibility 5. What is the extent of definition of good faith and if they are right to seek disguise /excuse of Good Faith

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3 Replies

anand 24 November 2017

1. Bank is not liable for unknown deposits in your account.

2. Bank can not debit your account without proper instrument ( Cheque/Debit authorization ).

3. In the case of erroneous transaction, Bank should inform the customer before debiting his account ( In most centralize bank this does not happen).

4. You can approach nodal officer of the respective bank.

G.L.N. Prasad (Retired employee.) 25 November 2017

A bank can not debit the account unless it is for recovery of their charges.

In case of such frauds/forgeries, they can maximum do is issue notice to the depositor and mentioning about the allegations on cheque, and they have to seek written opinion/comment/explanation/comment, and they can never talk law into his hands.

Before proceeding first seek information either under RTI Act or under CP Act and seek information as follows:

Information solicited:

1)Please provide the copy of laid down rule/regulation/stipulation in Bank Manual and rules and regulations of savings/current account of a customer, that empowers a banker to debit amounts to the customer's account without information/consent/knowledge.

2.Please provide all such generated vouchers, complaints if any received, communication with depositor as certified copies for availing proper remedy.

All this strictly, if you are a bonafide receiver of the cheque, as a litigant should approach the forum/ombudsman with clean hands.