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DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH

Name : G.Rajeswari
Designation : Senior Lecturer
Branch : Commercial and Computer Practice
Institute : Government Polytechnic, Srikakulam.
Year/Semester : V semester.
Subject : Banking.
Subject code : CCP 504(B)
Topic : Customer service in Banks
Duration : 50mts.
Sub topic : Status of Pass Book entries
Teaching Aids : PPT, Animation
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Objectives:

On completion of this period, you would be able to:


 Understand the status of pass book entries.

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Recap

 In the previous class, you have learnt the


meaning of pass book and statement of
transaction.
 A pass book is a copy of the customer’s account
in the banker’s ledger.
 Most of the banker’s follow a tabular form for
maintaining the pass book.
 A pass book may also be maintained in the form
of a loose-leaf ledger card system.

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Known to unknown

 The banker records all the transactions made by


the customer in the pass book.
 Sometimes there may be mistakes or omissions
in the pass book.
 So What is the status of Pass Book entries?
 Can we treat them as an evidence?

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Status of the Pass Book Entries

 A pass book is a small handy book issued by a


banker to his customer to record all dealings
between them.
 Does it bind both the parties? What is its proper
function?
 The answer to these questions are very difficult
because law is not yet definite on these points.

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Status of the Pass Book Entries

 In the absence of sufficient provisions in law, the


bankers have to fall back upon custom and past
experience.
 A pass book is very important to a customer
because it enables him to know the entries made
by the banker in his ledger account.
 e.g. the amount of interest allowed or charged,
Cheques collected and credited etc.

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Pass Book - Important points

 Entries in the pass book are to be recorded by the


clerk of the bank.
 Every entry must bear the initials of the accountant
or the concerned Officer.
 The customer should not write any entry himself,
even for the purpose of reconciling the bank
balance.
 Whenever the banker sends a pass book to the
customers it must show up-to-date entries.

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Pass Book - Important points

 Recently Reserve Bank of India has advised the banks


to provide full particulars of each transaction while
updating the pass books.
 If the pass book is lost by the customer, a duplicate pass
book may be issued by the banker and marked as
‘Duplicate’.
 In case of savings bank account, the pass book must
accompany the withdrawal form every time when money
is withdrawn through a withdrawal form.

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Pass Book - Important points

 According to Sir John Paget “the proper function of a


pass book is to constitute a conclusive and
unquestionable record of transactions between the
banker and customer and it should be recognized as
such”.
 Thus, the entries in the pass book are prima facie
evidence against the banker and the customer is bound
it.

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Pass Book - Important points

 To support Sir John Paget’s view, in Devaynes Vs.


Noble it was pointed out that in the judgment that it is
the duty of the customer to verify the pass book.

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Pass Book - Important points

 If there is any mistake or omission, he should bring it


to the notice of the Banker immediately.
 His silence is regarded as an admission that the
entries are correct.
 Thus a pass book has been accorded so much
significance.

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Pass Book - Important points

 As against this, there are some opposite views


which deny any authoritative position given to a
pass book.
 It would be absurd to hold that the taking of a pass
book and its return constitutes a settled account.”

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The Position in India:

 The position in India is not well defined.


 This difficulty arises because a customer is not bound
to examine his pass book.
 So, if a customer does not examine the pass book, we
cannot claim that he has accepted it as a settlement of
account.

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The Position in India:

 To find an answer to what the real effects of entries


in a pass book are, we have to carefully analyze
the type of entries. The entries in a pass book may
be of two kinds, viz., (i) A correct entry, and (ii) a
wrong entry.

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Correct Entry:

 A dispute does not arise in respect of a correct


entry.
 Therefore we can boldly say that a correct entry
constitutes a settlement of account between a
banker and a customer.

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Wrong Entry

 To err is humane.
 Therefore a banker may commit an error in a pass
book. What is the result of this wrong entry?
 To find out an answer to this question, we have to
decide the nature of the wrong entry.
 The wrong entry may again be either (i) favorable
to a customer, or (ii) favorable to a banker.

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Summary
 Entries in the pass book are to be recorded by the
clerk of the bank.
 Every entry must bear the initials of the
Accountant.
 The customer should not write any entry himself,
even for the purpose of reconciling the bank
balance.
 Whenever the banker sends a pass book to the
customer it must show up-to-date entries.

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Summary
 Recently Reserve Bank of India has advised the
banks to provide full particulars of each transaction
while updating the pass books.
 If the pass book is lost by the customer, a duplicate
pass book may be issued by the banker and
marked as ‘Duplicate’.
 In case of savings bank account, the pass book
must accompany the withdrawal form every time
when money is withdrawn thorough a withdrawal
form.
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Summary
 According to sir John Paget “the proper function of
a pass book is to constitute a conclusive and
unquestionable record of transactions between the
banker and customer and it should be recognized
as such”.
 Thus, the entries in the pass book are prima facie
evidence against the banker and the customer is
bound it.

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Quiz

1. Who records the entries in the Pass Book?


a) Banker
b) Customer
c) Government
d) All the above

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Quiz
2. If the pass book is lost, which of the following is
issued by the banker?
a) Cash book
b) Fixed deposit
c) Duplicate pass book
d) Journals

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Quiz

3. Pass book must accompany every time when


money is withdrawn by using
a) Pay-in-slip
b) Withdrawal form
c) DD requisition form
d) Account opening form

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Quiz

4. Entries in the pass book must bear the initials of


a) bank clerk or accountant
b) chartered accountant
c) Account Holder
d) doctor

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Frequently asked questions
1. What is the status of pass book entries?

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