Question 105. - It is a custom in Canadian banks that they will not mark cheques on their savings department, but instead have the ledger-keeper "O.K." them, adding his initial to the "O.K." The procedure is like this - a cheque is presented for certification at the wicket and the ledger-keeper advises the presenter that he cannot "mark" the cheque, but he will "O.K." it, which he does, initialing the "O.K." and at the same time making a memorandum of the amount in the customer's account. Is this "O.K." equivalent to or equal to a "marked certified or an acceptance," with the bank's official stamp for that purpose? After a lapse of a reasonable time might the bank refuse payment of this "O.K.'d " cheque? Prom the bank's standpoint, could it be contended that the " O.K." on the cheque was merely a memorandum signifying that there were funds at the moment in the account to provide for the cheque; that that entry in the ledger (which is merely made in pencil and the amount not taken from the balance) was only a ledger-keeper's memorandum and could in no wise be construed as an accept-ance of the bank to hold funds for an unlimited time against the cheque? If there has been any decision on the point, I should be glad if you would quote me its finding.

Answer. - The procedure outlined is most irregular, and we doubt if it is a "custom" in Canadian banks, as claimed.

The marking of a cheque "O.K." under the circumstances stated, amounts to certification, and a contention such as that suggested on the part of the bank would be untenable. We know of no specific ruling on the point, but we should expect the head office of any bank to give a peremptory one if the following of such a "custom" by any of its branches came to its knowledge.