Banking operation ( Tutorial ) (2).pptx

Banking operation ( Tutorial ) (2).pptx - Tutorial 4 B A N...

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Tutorial 4 BANKING OPERATIONS
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1. Discuss some of the reasons leading to termination of a banker-customer relationship. 1. By mutual agreement Both parties agree to close the account.
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2. Unilaterally Closure by customer Customer gives written notice to terminate account. Instruction to close account must be in writing and signed as per mandate. Unused cheques to be returned Any ATM cards held by the customer should be destroyed. Closure by bank Bank must give reasonable written notice to customer The common reasons are:- Unsatisfactory conduct of account. For example, Cheques issued but without sufficient funds in account. The account may have become dormant. The accounts of customers who are mentally unstable, or bankrupt, or who have died. 1. Discuss some of the reasons leading to termination of a banker-customer relationship.
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3. By operation of law Liquidation of the customer When a company is being wound up or a winding up petition is being presented against it, the bank must immediately freeze the account until it receives further notice from the liquidators. After the company has been wound up, it ceases to have any legal existence and all its contractual relationships come to an end. Bankruptcy of individual customer When bankruptcy proceedings are initiated against an individual customer, the bank should freeze the account. A bank may have an account for a bankrupt individual which has a credit balance. If so, the bank must inform the receiver and, as a debtor of the bankrupt individual, will be required to transfer the money into the account controlled by the receiver. The bank is then able to close the account, having given notice to the account holder. 1. Discuss some of the reasons leading to termination of a banker-customer relationship.
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3. By operation of law Mentally incapable According to contract law, a person who has been certified as insane cannot enter into a binding contract. A bank may open an account with an individual and then receives notification of the mental incapacity of the individual.
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  • Fall '16
  • Wang Ah Yong

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