While opening account of clients emphasis must be given on introduction. Enquiry about the constituent must also be made. No account shall be opened without obtaining satisfactory introduction
& reference. The importance of introductory reference and enquiry are as follows: 1.1 Banker customer
relationship is established through opening an account on obtaining introductory reference
and introduction. If there is any lapse in this regard Bank may suffer loss subsequently.
1.2 Banker shall not get protection under section 131 & 131 (a) of Negotiable Instrument Act 1981 for negligence and will be guilty of conversion in case of collection of a cheque/instrument having defective title if the account is not opened without proper introduction & enquiry.
1.3 If the status of the person is not properly known to the Bank while opening the account, the banker will also be held responsible for negligence. For example, if a person desiring to open an account as an employee, the name of his/her employer together with the name of firm or institution must be obtained. Similarly if he/she is a Partner or a Director of a Company, the name of the firm or the Company must be also obtained.