Collecting banker means the banker who collects the cheques and bills on behalf of the customers. In other words, every crossed cheque is necessarily to be collected through any bank, which is known as collecting banker. As Sir John Paget has rightly said “Looking at the restriction on the encashment of crossed cheques, save through a bank and the universal and legally encouraged use of crossed cheques the collection of such cheques must be regarded as an inherent part of banker’s business.”
While collecting the cheques of a customer, the banker may act in the capacity of either-
(a) as a holder for value, or
(b) as an agent of the customer.
The legal position of the collecting banker under these two circumstances is discussed below.