Module: | Continuous Clearing (CCSR) & Penalties
Q28: If a cheque is lost in transit or during the clearing process, the bank is liable to compensate the customer in which of the following ways?
1. The bank must immediately inform the customer to facilitate a stop-payment instruction.
2. The bank must reimburse the customer for actual charges incurred in obtaining a duplicate cheque.
3. The bank must pay interest for the period of delay caused by the loss, as per its collection policy.
2. The bank must reimburse the customer for actual charges incurred in obtaining a duplicate cheque.
3. The bank must pay interest for the period of delay caused by the loss, as per its collection policy.
✅ Correct Answer: D
Consumer protection guidelines impose a three-tier liability on banks for cheques lost in transit: Communication (informing the customer immediately), Reimbursement (paying costs for the duplicate instrument), and Compensation (paying interest for the delay).