Taking serious note of the fact that the savings of two senior citizens were swindled by using forged signatures, the Madurai Bench of the Madras High Court has observed that it is the duty cast upon the banks to verify the signatures of account holders and then clear the instrument for encashment.
Perusing the signatures, Justice B. Pugalendhi observed that even a layman with his naked eye can tell that the signatures varied drastically. The court took serious note of the fact that signatures were sent to a private lab for verification. Such practice needs to be deprecated.
Training has to be imparted to bank officials to verify signatures. The banking machinery runs mainly on the verification of signatures. The bank should take responsibility in the event of fraud taking place in their institution. There should be an insurance mechanism in order to protect the interest of their depositors, the judge said.
The judge observed that the concept of nationalisation of banks emerged in 1969. The main object apart from developing society was to raise public confidence in the system of banking.
The court was hearing a criminal revision petition filed by K. Venkateshwaran of Madurai in 2016.
He filed the petition seeking to set aside the order of a Judicial Magistrate for not taking cognisance against the then Manager of Indian Bank, Kochadai branch, and issuing summons to him in the case.
The petitioner said his parents sold their ancestral property for ₹40 lakh and deposited the amount in Indian Bank, Tallakulam branch, with the help of an acquaintance, the key accused in the case. The couple opened a fixed deposit joint account. When the amount matured, the acquaintance asked the couple to transfer the amount to Kochadai branch.
He told them that the branch was near his residence and it would be convenient for him to collect the amount on their behalf. He swindled a total amount of ₹49.50 lakh.
The judge directed the Judicial Magistrate to take cognisance against the then Branch Manager of the Kochadai branch and issue summons to ascertain whether bank officials colluded with the accused or they exhibited lethargic attitude in verifying and passing the instrument.