BANKING AFFAIRS

Detailed explanation-1: -This is the protection in the case of bearer cheque; this section implies that even if any endorsements restrict further negotiation, the cheque will retain the bearer character if it is originally issued as a bearer cheque.

Detailed explanation-2: -The section 85(1), 85(2), 128 of negotiable instrument acts provide statutory protection to paying banker for making payments of order cheque, bearer cheque or crossed cheque in that order.

Detailed explanation-3: -(1) ]Where a cheque payable to order purports to be indorsed by or on behalf of the payee, the drawee is discharged by payment in due course.

Detailed explanation-4: -The NI Act provides protection under Section 131 to the collecting banker in this respect provided the following conditions are satisfied: 1. The protection under the law is available only if he collects a crossed cheque for collection. No protection is available for uncrossed or open cheques.

Detailed explanation-5: -The definition gives clearly the conditions, the paying banker has to fulfil before making payment of any cheque. If he fulfils the same, the paying banker gets the statutory or legal protection under NI Act (Negotiable Instruments Act).