RIGHTS OF THE CUSTOMER.
1. The right to have his deposit accepted by the bank where there is no legal restriction on such acceptance.
2. Appropriation of Payment. This is the right of the customer (who has more than one account with a bank) to choose the account that would be credited by his deposit-Bradford Old Bank V Sutcliffe.
3. Right to be paid on demand.
4. Right to obtain information relating to his account. Like balance, statement of transactions that have occurred on his account, and so on.
WHEN CAN A CUSTOMER’S PAYMENT INSTRUCTION BE DISHONOURED?
1. Insufficient Funds in the customer’s account to meet the demand-In Osawaye V National Bank for Nigeria and in the case of Savannah Bank V Salami, the Supreme Court noted that where the amount standing in the customer’s account is not up to the amount sought to be withdrawn, the bank can dishonour the cheque.
2. Legal Impediment to the grant: like, where there is an ongoing police investigation on the account or where the court has ordered that the account should be frozen. This was done by the magistrate court in International Bank of West Africa V Kennedy Transport (Nig) Ltd. See also Osawaye V National Bank for Nigeria.
3. Irregularity on the face of the cheque: like unsigned alteration, discrepancy between words and figures, where signature differs from bank’s specimen and other suspicious circumstances which necessitate further investigation by the bank to forestall fraud.
4. Where the customer is declared bankrupt or on the other hand, the bank is wound up.
5. Where the cheque is stale or Post-dated .
6. Effective Countermand: a countermand is simply regarded as “an order cancelling a previous order”. Occurs where the customer clearly instructs the banker not to pay a cheque drawn on his account. For example, Mr A draws a cheque instructing NISBank to pay Mr B the sum of N100,000. Mr A later calls/contacts NISBank and instructs them not to cash the cheque (not to pay Mr B). This instruction must reach NISBank before encashment… i.e. before the amount is paid to Mr B. In Ademiluyi and Lamuye V ACB, (discussed earlier) the court held that only a customer can give an effective countermand payment from his account.
7. Where the bank has notice of the customer’s death or mental disorder-Younge V Toynbee- when the notice reaches the banker it can generally dishonour withdrawal requests.
8. Where the account does not exist or has been closed by the customer.