Section 45Z of the Banking Regulation Act, 1949: Return of Paid Instruments to Customers
Section 45Z regulates the return of a paid instrument by a banking company to its customer before the statutory preservation period has expired. The provision requires the bank to retain an accurate true copy before returning the original instrument.
Text of Section 45Z - Return of paid instruments to customers
(1) Where a banking company is required by its customer to return to him a paid instrument before the expiry of the period specified by rules made under section 45Y, the banking company shall not return the instrument except after making and keeping in its possession a true copy of all relevant parts of such instrument, such copy being made by a mechanical or other process which in itself ensures the accuracy of the copy.
(2) The banking company shall be entitled to recover from the customer the cost of making such copies of the instrument.
Explanation. In this section, "customer" includes a Government department and a corporation incorporated by or under any law.
Meaning and legal effect of Section 45Z
Section 45Z creates a safeguard when the original of a paid instrument is returned before the end of the legally prescribed preservation period. The bank must first create and keep a true copy of all relevant parts of the instrument. The method used to create the copy must itself ensure accuracy.
The section therefore balances two interests: the customer's request for return of the original instrument and the bank's statutory obligation to preserve reliable evidence of the paid instrument. The section also expressly permits the bank to recover the copying cost from the customer.
Relationship with Section 45Y of the Banking Regulation Act
Section 45Z operates together with Section 45Y. Section 45Y authorises the Central Government, after consultation with the Reserve Bank of India, to make rules specifying how long banking companies must preserve their books, accounts, documents and different instruments paid by them.
The relevant rules are the Banking Companies (Period of Preservation of Records) Rules, 1985. These rules prescribe minimum preservation periods for specified banking records and permit the Reserve Bank of India, in appropriate cases, to direct preservation for a longer period.
Preservation period relevant to paid instruments
Under Rule 3 of the Banking Companies (Period of Preservation of Records) Rules, 1985, specified books, accounts and documents must be preserved in good order for a period relating to not less than eight years immediately preceding the current calendar year. The listed records include paid cheques, paying-in slips and several other banking vouchers and account records.
Meaning of "customer" under Section 45Z
The Explanation expands the meaning of "customer" for this section. It expressly includes a Government department and a corporation incorporated by or under any law. This makes the provision applicable not only to ordinary individual or business customers but also to these specified institutional customers.
Key requirements at a glance
- A customer asks for return of a paid instrument before the applicable preservation period expires.
- The banking company must first make a true copy of all relevant parts of the instrument.
- The copying process must itself ensure accuracy.
- The bank must keep the true copy in its possession.
- The bank may recover the cost of making the copy from the customer.
Law and official-source references reviewed on 14 September 2026.