Responsibility of bank about mistake in paying the instrument


Banks practice many banking operations that assist managing commercial operation and ensuring speed fulfillment. Paying, of bills of exchange considers one of those tasks that practiced by banks on the contractual relationship between banks and clients. Accordingly, the bank (drawee) should pay the instruments that are issued by client (drawer) for beneficiary (payee). However, drawee (bank) sometimes may not do its task in paying the instruments by mistake or negligence. Drawee may also without knowing, pay fake instruments for the payee. In such cases, the question in whether or not drawee bank should be responsible for such payment or refusing such pay.