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Banking Term: Account Holder

Dec 23, 2014 15:00 IST

    Definition

    Account Holder is a person designated and is authorized to do business transaction on behalf of an account. The account holder's signature is required on file with the bank. The signature permits that person to conduct business on behalf of the account.

    Multiple Choice Question

    Question: Account Holder X draws cheque for Rs 10000 in favor of Rakesh (minor aged 12 years) or bearer. Rakesh presents the cheque on counter duly signed on back. What should the banker do with the cheque of a minor?

    1. Refuse, since no contractual capacity
    2. Pay the cheque after inquiring with X
    3. Pay to Rakesh, without any responsibility of bank
    4. Ask rakesh to bring his parent
    5. Section 26 N.I. Act 1881, does not allow minor to receive payment

    Answer 3

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