Drawing, accepting, making or issuing of any promissory note, hundi or bill of exchange expressed to be payable to bearer on demand by a person other than the Reserve Bank of India or the Central Government is prohibited under

BANKING GENERAL KNOWLEDGE

Please wait while the activity loads.
If this activity does not load, try refreshing your browser. Also, this page requires javascript. Please visit using a browser with javascript enabled.

If loading fails, click here to try again

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	Banking Regulation Act, 1949
B	Section 31 (1) of the Reserve Bank of India Act, 1934
C	Negotiable Instruments Act, 1881
D	Indian Contract Act, 1872

Explanation:

Detailed explanation-1: -(1) A “negotiable instrument” means a promissory note, bill of exchange or cheque payable either to order or to bearer.

Detailed explanation-2: -A promissory note cannot be made payable to the bearer, no matter whether it is payable on demand or after a certain time. 2. A bill of exchange cannot be made payable to the bearer on demand though it can be made payable to the bearer after a certain time.

Detailed explanation-3: -(2) Notwithstanding anything contained in the Negotiable Instrument Act, 1881 (26 of 1881), no person in [India] other than the Bank or, as expressly authorised by this Act, the Central Government shall make or issue any promissory note expressed to be payable to the bearer of the instrument.

Detailed explanation-4: -Instruments payable on demand.-A promissory note or bill of exchange, in which no time for payment is specified, and a cheque, are payable on demand.

There is 1 question to complete.