Chapter: Collecting Banker
1.

When banker received deposits from the customer, then the banker becomes -------------- of the customer.

A. Debtor
B. Creditor
C. Bailee
D. Trustee
Answer» A. Debtor
2.

If cheque is crossed an account payee, this is direction of, ------------- to---------------.

A. Payee, paying banker
B. Payee, collecting bank
C. Drawer, paying bank
D. Drawer, collecting bank
Answer» D. Drawer, collecting bank
3.

In case of collection of cheques and bills, the relationship of the banker with the customer is that of

A. Bank as agent and customer trustee
B. Bank as trustee and customer debtor
C. Banker as debtor and customer bailee
D. Banker as bailor and customer bailee
Answer» A. Bank as agent and customer trustee
4.

In case collection of a bank draft the collecting banker is protected against conversion under _____ section of Negotiable Instruments Act 1881.

A. 131
B. 131 A
C. 85
D. 128
Answer» B. 131 A
5.

A cheque has been deposited by a customer with his bank for collection. The bank allows overdraft against the security thereof. The bank becomes

A. Holder of the cheque
B. Holder in due course
C. Holder for value
D. Drawer of the cheque
Answer» C. Holder for value
6.

Who can file a criminal case against the drawer of a dishonored cheque?

A. The payee
B. The holder in due course
C. Both of the above
D. The paying banker
Answer» C. Both of the above
7.

The best answer for returning a cheque for want of funds in the account is.........

A. Refer to drawer
B. Not provided for
C. Exceeds arrangement
D. Not sufficient funds
Answer» D. Not sufficient funds
8.

Bankers undertake the duty of collection of cheques and bills because......

A. Sec.131 of the NI Act compels them to do so
B. Sec.85 of the NI Act compels them to do so
C. They want to do it as a service
D. Collection is a must for a crossed cheque
Answer» C. They want to do it as a service
9.

A collecting banker is given protection only when he collects

A. A crossed cheque
B. An order cheque
C. An Bearer Cheque
D. An mutilated cheque
Answer» A. A crossed cheque
10.

Collecting a cheque payable to the firm to the private account of a partner without enquiry constitutes.......

A. gross negligence
B. Negligence under remote grounds
C. Negligence connected with immediate collection of a cheque
D. Contributory Negligence
Answer» C. Negligence connected with immediate collection of a cheque
11.

A Collecting banker is given the statutory protection only when he acts as...

A. A banker
B. A holder for value
C. A holder in due course
D. An agent
Answer» D. An agent
12.

To get protection under Sec 131 of NI Act collecting banker should collect the cheque

A. crossed generally
B. crossed specially
C. 1 or 2
D. crossed a/c payee
Answer» C. 1 or 2
13.

The endorsement on the cheque is fictitious and the collecting banker failed to check it the cheque is paid by the paying banker

A. collecting banker is not protected
B. paying banker is protected
C. collecting banker & paying banker are protected
D. both are not protected
Answer» B. paying banker is protected
14.

In case of wrongful dishonour of a cheque by the banker

A. the holder can claim from drawee bank
B. the holder can claim from collecting bank
C. the remedy for holder is against drawer
D. holder can claim from drawee bank, collecting bank, drawer
Answer» C. the remedy for holder is against drawer
15.

When the cheque is dishonored, the collecting banker is not bound to give notice of the same to his customer within a reasonable time.

A. True
B. False
C. none
D. none
Answer» B. False
16.

The collecting banker is bound to show due care and carefulness in the collection of cheques presented to him.

A. True
B. False
C. none
D. none
Answer» A. True
17.

In case a collecting banker has realized the cheque, he should pay the interest to the customer as per his (customer’s) direction.

A. True
B. False
C. none
D. none
Answer» A. True
18.

Holder is an individual who has lawfully received possession of a Commercial Paper, such as a cheque and who is entitled for payment on such instrument.

A. True
B. False
C. none
D. none
Answer» A. True
19.

There is legal obligation for a banker to collect the bills of exchange for its customer.

A. True
B. False
C. none
D. none
Answer» B. False
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