Legal Question in Banking Law in India

06.04.2016

Dear Sir / Madam,

Q. If Cheques are written as "Account Payee", does it pass illegal process ? Can they open a duplicate Bank account as the payee's name ? Please someone answer me as I am troubled.

A. Crossing a cheque as "Account Payee" is a safe step towards preventing any misuse of the cheque and ensuring that the proceeds of the cheque are credited to the actual payee's bank A/c as mentioned on the cheque. In view of the stringent Know Your Customer (KYC) norms to be followed by all Banks prior to opening a new Bank A/c with pre-verification and vetting of address and other particulars of the Account opener, it is difficult to open a duplicate or false Bank a/c in the Payee's name. The Bank official(s) will be "tasked" and immediately dismissed from service for lapse(s) if any.

Regards,