BANKING AFFAIRS

Detailed explanation-1: -The above section specifies that a cheque which is ‘once a bearer is always bearer’ (which means if a cheque is originally drawn as a bearer cheque remains always bearer irrespective of any endorsements on the back of the instrument).

Detailed explanation-2: -The impact of this section is if a cheque is originally drawn as a bearer cheque it remains always bearer irrespective of any endorsements on the back of the instrument. Therefore banks are not required to verify the regularity of the endorsement on the back of the cheque if any.

Detailed explanation-3: -A cheque payable to bearer is negotiable by the delivery thereof, and when it is payable to order is negotiable by the holder by endorsement and delivery thereof. A cheque has to be presented for payment by the payee or holder to the acceptor, maker or drawer.

Detailed explanation-4: -Answer. Bearer cheque have no withdrawal limits. If the sum is greater than Rs. 50, 000, the bank will request identification and verify the identity of the individual in whose name the cheque was issued.

Detailed explanation-5: -Ans: A bearer cheque can be encashed at any branch of the bank of the account holder without any identity proof of the bearer unless the amount on the cheque is more than ₹ 50, 000.