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References are required when opening an account as precaution by the bank both upon opening an account and during running of it so that the bank can claim statutory protection against conversion and otherwise avoid actions for breach of contract. References are required where personal introduction is not possible because;
i) The general reputation of the customer can then be established. This will help the bank to avoid opening unsatisfactory account, thus saving future embarrassments and as per
ii) The protection of the Cheques Act 1957 section 4 will be more readily available in that the bank will have done everything necessary, when opening the account, to avoid any contention of negligence.
If the person acting as referee is unknown and unverified and the references proves to have been a forgery the bank will usually lose the protection of the section by reason of its own negligence.
NatalieR answered the question on February 15, 2022 at 01:13
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