- 6 Marks
Question
Osagie is a customer of Kash Bank Plc. He drew a cheque for the sum of N150,000 in favour of Osula. When Osula presented the cheque for payment at the nearest branch of Kash Bank Plc., the teller returned the cheque unpaid, telling him to get back to Osagie. Osula insists that the teller must tell him the state of Osagie’s account.
Required:
i. State THREE reasons for which Kash Bank Plc. could be wrong in returning Osagie’s cheque unpaid. (3 Marks)
ii. State THREE reasons for which Kash Bank Plc. could lawfully disclose the state of Osagie’s account. (3 Marks)
Answer
i. THREE reasons for which Kash Bank Plc. could be wrong in returning Osagie’s cheque unpaid:
- Sufficient Funds: If Osagie had sufficient funds in his account to cover the cheque, the bank would be wrong in returning it unpaid.
- Error in Processing: If there was an error in processing or handling the cheque by the bank’s staff, it would lead to wrongful dishonor.
- Negligence of the Bank: If the bank failed to properly verify the account details or status and returned the cheque without a valid reason, it would be an error on the bank’s part.
ii. THREE reasons for which Kash Bank Plc. could lawfully disclose the state of Osagie’s account:
- Consent of the Account Holder: If Osagie explicitly authorizes the bank to disclose his account details to Osula.
- Legal Obligation: If the disclosure is required under the law, such as by a court order or in compliance with statutory requirements.
- Bank’s Interest: If the bank needs to disclose the account details to protect its own interests, such as in cases of suspected fraud or legal proceedings involving the account.
- Tags: Bank Responsibilities, Banking, Cheques, Disclosure
- Level: Level 1
- Uploader: Kwame Aikins