BILLS OF EXCHANGE ACT 1909 - SECT 88B Protection of bankers paying unindorsed or irregularly indorsed cheques or drafts

BILLS OF EXCHANGE ACT 1909 - SECT 88B

  (1)   Where a banker in good faith and in the ordinary course of business pays to another banker a cheque drawn on the first - mentioned banker that is not indorsed, is irregularly indorsed or has been indorsed without authority:

  (a)   the first - mentioned banker does not, in paying the cheque, incur any liability by reason only of the absence of, or irregularity in, indorsement or his or her failure to concern himself or herself with the existence of authority for indorsement; and

  (b)   he or she shall be deemed to have paid the cheque in due course.

  (2)   Where a banker in good faith and in the ordinary course of business pays to another banker a draft drawn by the first - mentioned banker upon himself or herself and payable on demand, whether the draft is payable at the head office or at some other office of the banker:

  (a)   the first - mentioned banker does not, in paying the draft, incur any liability by reason only of the absence of, or irregularity in, indorsement or his or her failure to concern himself or herself with the existence of authority for indorsement; and

  (b)   the payment discharges the draft.

  (3)   For the purposes of the last two preceding subsections, a banker who:

  (a)   has paid a cheque drawn on him or her or a draft drawn by him or her upon himself or herself ; and

  (b)   has credited the account of a customer with the amount of the cheque or draft;

shall be deemed to have paid the cheque or draft to another banker.