Legal Question in Banking Law in India
A nationalized bank had paid cash against a bearer cheuqe for Rs. 5,00,000/= issued in favor of Private Limited company in October, 2006. Can the bank pay in cash across the counter after taking a signature with stamp of the payee company. The payee company has no account with that bank. Please also note that on the reverse of the cheque this type of stamp is affixed.
For A B C Pvt. Ltd.
Authorised Signatory
How payment be made without verifying the genuineness of the person signing for withdrawal.
1 Answer from Attorneys
03.05.2014
Dear Sir / Madam,
The Bank has blatantly violated Reserve Bank of India's "money laundering" guidelines and an inquiry has to be initiated against the concerned Branch Manager and all the responsible officials of the Bank who have wrongly effected the cash payment above Rs. 50,000/- instead of insisting upon the transaction being routed through a crossed A/c payee cheque.
Regards,
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