Legal Question in Banking Law in India

Customer A had issued Demand Draft in Favour of ABC. ABC did not present the DD and now the DD has expired and its lying in unpaid DD account for 3 years. Can the bank move this amount from unclaimed/unpaid DD to profit account after 3 years.

What if it was not a bank customer but a walk in customer?


Asked on 4/23/14, 3:19 am

2 Answers from Attorneys

J. Radhakrishnan independent Practice

The bank has to keep it in suspense account.

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Answered on 4/23/14, 10:57 am
Fca Prashant Chavan Expert Edge LLP

q4.04.2014

Dear Sir / Madam,

No ... not at all ... no excuses here. The bank is supposed to contact the drawer of the DD informing him that the proceeds have not been encashed by the drawee and the Bakk is legally bound to credit back the amount (less charges) to the drawer.

With the introduction of KYC norms, all banks are required to take the full identity of the drawer with his / her contact number and address for communication.

Regards,

.

Regards,

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Answered on 4/24/14, 8:26 am


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