Whenever an individual opens an account in a bank an obligation is automatically created on the banker towards its customer with certain rights and responsibilities. These responsibilities are known as the Special Features of Relationship between a banker and a customer. Some of the special relationships are as follows:
Honour Cheques:According to the Negotiable Instrument act 1881, Sec 31 every banker must honour cheques drawn on it provided there is sufficient money in the account from which it is drawn and the funds are properly applicable. The cheques have to be presented to the bank within a given time period (3 months).
Lien:Lien refers to the right of the banker over certain securities of his customer which may come into possession in the course of business.
Conditions required to exercise lien:
1) The securities and goods must come to his hands as a baker
2) The banker should obtain the possession of the securities lawfully
3)Securities should not have been given to the bank for a special purpose
4)The securities held shall be in the name of the borrower only
Secrecy of Accounts:It is an obligation that the bank maintains secrecy about details of an account opened by a customer in the bank. But the details are disclosed under certain specific conditions like while presenting evidence in court.
Right to combine accounts:Bankers have the right to combine accounts maintained by customers in the same or different branches of the bank. However, personal account of one customer cannot be combined with the joint account of another customer. Customers do not hold the right to treat multiple accounts as one.
Right to set-off:A banker can adjust a debit balance to the account of a customer with any balance to the customer’s credit providing notice to the customer. These rights cannot be exercised against future debt or emergency debts. The debit and credit balances have to be the same person provided there in no implied agreement to the contrary.
Right of Appropriation:When customers deposit a certain amount of money in a bank he or she has the right to decide which account is to be credited in case he maintains more than one accounts in a bank. In case no preference has been chosen by the customer, i.e. he or she has not mentioned which account is to be credited, the bank is free to apply the payment to any debt owed by the person which also includes a debt barred by limitation.
Right to claim incidental charges:Every bank holds the right to claim incidental charges on the operation of accounts of a customer for example in the case of a collection, remittance of drafts, etc.
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