Bank held liable for employee oversight

The State Commission concluded that the bank officials had evidently been negligent in failing to compare the signature prior to making payment

Bharpur Singh had an account with Axis Bank in which he had a balance of Rs 11,93,304. When Singh attempted to withdraw some money on May 24, 2008, the bank refused payment on the ground that there were insufficient funds in the account. Singh learnt that one Gurwinder had used cheque number 063989 to withdraw Rs 11.83 lakh from his account.

The bank lodged a first information report (FIR) with the police. It also reported the fraud to the Reserve Bank of India (RBI)  as required under the directives issued by the central bank in its master circular for banks.