Cheque signature mismatch may lead to criminal proceedings; Nomination in the Savings Bank Account

Cheque signature mismatch may lead to criminal proceedings

December 02, 2012

New Delhi: A person may face criminal proceedings if a cheque issued by him gets dishonoured on the ground that his signature does not match the specimen signature available with the bank.

A Supreme Court bench of justices TS Thakur and Gyan Sudha Mishra set aside the verdict of Gujarat High Court which had held that criminal proceedings for dishonouring of cheque can be initiated only when the cheque is dishonoured because of lack of sufficient amount in the bank account and not in case where a cheque is returned due to mismatch of signature of account holder…

You may like to click on any of the following links:-

* DOPT/CVC/RTI/MOF/CGHS/DPE/RAILWAY/RBI/IRDA Circulars/Orders/Notifications/Guidelines and other Govt. Circulars/Orders/Notifications
* Right to Information (RTI) – Rules/Notifications/Circulars/Guidelines/Orders; Central Information Commission (CIC)’s Circulars/Directions/Decisions

Nomination in the Savings Bank Account

Are you aware that RBI has advised Banks to strictly comply with existing provisions and devise a proper system of acknowledging the receipt of the duly completed form of nomination, cancellation and/or variation of the nomination?

March 13, 2009; Updated on  29.12.2010 :

It is credible that many of us, holders of savings bank account, fixed deposit receipts, etc. or locker hirers do not have any acknowledgement given by their banks regarding their nomination, cancellation of nomination or change of nomination. The practice of not giving such acknowledgement, on the part of a bank, is to be construed as contrary to the provisions of the Banking Regulation Act, 1949 and the Banking Companies (Nomination) Rules, 1985.

Therefore, it is necessary and in your own interest to obtain an acknowledgment of the nomination in respect of bank account, FDR, locker, etc., as a matter of right under the existing provisions, because it will help you to review the nomination from time to time, having regard to the change in family and other circumstances. If the record of nomination is retained in the bank only, it will offer an opportunity to an unscrupulous bank employee to manipulate the record with ulterior motive or just to harass the account holder.

When the acknowledgement of the nomination is not available with the account holder or his/her family, the account holder does not remember the actual nomination made by him/her after some time and review of the existing nomination in time does not take place in many cases. Resultantly, in the event of death of account holder, the heirs may have to face legal difficulties in claiming the funds lying in the bank account. In another situation, if the nomination kept in the bank gets misplaced and the account holder was not there to make a fresh nomination, the avoidable problems will crop up.

The moral of the story is that you must always insist on getting an acknowledgement of your nomination made in respect of your bank account, FDR, locker, etc.

As regards the banks, they need to comply with the RBI’s instructions on the subject in letter and spirit. The instructions under reference are a further step in the direction of ensuring transparency provided for in the existing provisions.

A copy of the Reserve Bank of India’s circular dated 9.3.2009 on the subject may be seen from the list of RBI circulars by clicking here.

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