Banking law & Practices, Banking, Banker rights, case study, rule in Clayton's case

Banking law & Practices, Banking, Banker rights, case study, rule in Clayton's case

1. Rights of a banker meaning In banking, a banker is an officer of a bank who conducts the business of banking. A banker has some rights and obligations that must be implemented and followed to provide the best banking services to the customers . 

2. rights of a banker Rights of General Lien : One of the most important rights enjoyed by a bank is the right of a general lien. Lien means the right of the creditor to retain the goods or securities owned by the debtor until the debt due from him is repaid. The Right of the Set-off : Right of set-off is the right of a debtor to adjust the amount due to him from a creditor against the amount payable by him to the creditor to determine the net balance payable by one to another. Banker’s Right of Appropriation : A customer may owe several distinct debts to the bank when the customer deposits some money without specific instructions, and it is insufficient to discharge all debts. The problem arises as to which debt this amount should be adjusted. In the absence of any specific instructions, the bank has the right to appropriate the deposited amount to any loan, even to a time-barred debt. Right to Charge Interest and Commission : A banker has the right to charge interest and commission on the loans and advances given by him. Right to Close the Account : A banker has the right to close the account of a customer in the following circumstances: (a) If the customer is not maintaining the minimum balance required by the bank. (b) If the customer issues a cheque without sufficient funds in his account. © If the customer becomes insolvent.

3. right to set off The right of set-off is the right of a bank to adjust the amount due to it from a debtor against the amount payable by it to the debtor to determine the net balance payable by one to another  1 .  The right of set-off can be exercised subject to the fulfillment of the following conditions  : All the funds must prima facie belong to the customer. When debt amounts are certain. When the debts are in the same rights. There is no contract expressed or implied in contrast.

4. Rule in clayton’s case The rule in Clayton’s case creates a presumption as to the appropriation of payments into a running account being attributable to the repayment of the oldest debits from the account.  In other words, when in the absence of a contrary intention, payments are presumed to be appropriated to debts in the order in which the debts are incurred.

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