Effect of the Customer Signing Confirmation Slips :

The Pass Book itself is not a conclusive proof of a settled account. Banks nowadays periodically issue to the customers confirmation slips, which gave the balance in the account as on a given date. By putting his signature on the confirmation slip, the customer accepts and confirms such balance. The legal effect of a customer’s signing the confirmation slip was considered by the Kerala High Court in Essa Ismail vs. Indian Bank Ltd. (1963). The Court observed that “unless there is evidence to show that the practice or the custom indicated a stated or settled account, the customer is not precluded from questioning the debit entries in a Pass Book but, when confirmation slips are sent and signed by the customer, he will be bound by the debits made.” In this case, the confirmation slips were signed by the customer or his authorized agent. Hence the same were binding on him and his heirs and could not be challenged by them.

The banker is entitled to point out the customer any mistake or omission and to rectify it as soon as he knows about it. On receipt of such information the customer is not entitled to withdraw the excess amount wrongly credited to his account. But the banker should not dishonour the cheques drawn and issued by the customer before the notice of such wrong entry is served on him. If he does, he will be liable for the consequences of their wrongful dishonour.