Collecting banker means the banker who collects the cheques and
bills on behalf of the customers. In other words, every crossed cheque is
necessarily to be collected through any bank, which is known as collecting
banker. As Sir John Paget has rightly said “Looking at the restriction on the encashment
of crossed cheques, save through a bank and the universal and legally
encouraged use of crossed cheques the collection of such cheques must be
regarded as an inherent part of banker’s business.”
While collecting the cheques of a customer, the banker may act in
the capacity of either-
(a) as a holder for value, or
(b) as an agent of the customer.
The legal position of the collecting banker under these two circumstances is discussed below.
