Duty to confirm the reference where the referee is not known or has given reference in absentia :

Though as a matter of practice bankers in India require introduction by an existing customer of the bank, this may not always be possible especially when the branch is newly opened. In such cases the customers are required to get references from known persons in the locality or from the existing bankers. In such case the banker is required to make enquiries with the referee to confirm that the person whose account is newly opened is a genuine person.

In Harding v. London Joint Stock Bank [1914] 3 Legal Decision Affecting Bankers 81, an account was opened for a new customer after complying with the necessary formalities. The account was not opened by deposit of cash as is the usual practice but was opened by paying in a third party cheque. The bankers in the case made enquiries with the customer who thereupon produced a forged letter issued by his employer giving him power to deal with the cheque. It was thereafter found that the cheque was stolen by the customer and credited to his account. The bank was held negligent for failure to make necessary enquiries from the employer as to whether the customer who was an employee had in fact the necessary power to deal with the cheque.