Question

Who has the authority to confirm alterations made to a cheque in a jointly operated account ?

• A. An attorney appointed by the court holders
• B. Any of the account holders jointly
• C. All account holders must jointly confirm
• D. Only the person who signed the cheque

Answer 1

Answer:

C. All account holders must jointly confirm

Operational Guidelines for Joint Accounts

• Joint Liability: In accounts operated under the mandate of Jointly, any alteration, correction, or overwriting on a cheque requires the authentication of all account holders.
• Verification Process: Banks mandate that every alteration must be validated by the signature of all parties involved to prevent fraudulent activities and unauthorized debits.
• Legal Framework: These practices are governed by the Negotiable Instruments Act, 1881, and specific guidelines issued by the Reserve Bank of India (RBI) regarding cheque processing standards.
• CTS-2010 Standards: Under the Cheque Truncation System (CTS), the practice of making alterations on cheques is discouraged. RBI guidelines explicitly state that no changes or corrections should be made on cheques, and in case of any error, a fresh cheque leaf must be issued.
• Risk Management: If an alteration is made, the bank reserves the right to dishonor the instrument if the verification is incomplete or if the signatures do not match the specimen records maintained by the bank.
• Account Mandates: While accounts operated as Either or Survivor or Anyone or Survivor allow for individual operations, alterations specifically require the consent of the account holders involved in the initial signing process to maintain legal integrity.