BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Payee
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True owner
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Drawee
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Drawer
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Detailed explanation-1: -When a drawer countermands a cheque it usually means that he has asked the bank not to make payment. See the Bills of Exchange Act 1882, s. 75(1). If the bank pays after the cheque has been countermanded, the customer’s account cannot be debited with the amount.
Detailed explanation-2: -In the case of check payments, a customer can countermand the payment at any time before the check is presented, through a stop-payment order.
Detailed explanation-3: -Despite contrary instructions, the bank honoured the said cheque. Held: The court held that the bank was in breach of its duty to the appellant, countermand can be given orally, and so the appellant may have judgement on the first claim.
Detailed explanation-4: -1. A countermand is generally the revocation of the banker’s authority to pay a cheque. It is sometimes referred to as a ‘stop’ or ‘stop order’.
Detailed explanation-5: -Countermanding of a cheque is also known as: cancellation.