Thursday, July 4, 2013

BANK EXAMINATIONS - DIFFERENCES








DIFFERENCES

LIEN
SET OFF
It is the right of a creditor who holds the securities/goods of debtor to retain the same till the debt is cleared
It is a cross claim for liquidated amount
To have the right of lien, the creditor should have acquired possession of the goods in the ordinary course of business
Both the claim and set off must be mutual debts due from and to the same parties under same right
Lien is an indirect charge on the security
In case the account is stopped by death or insolvency of the customer, bank’s right of set off accrues automatically
Right of lien implied
To exercise the right of set off notice is a must
NOMINATION
DEATH CLAIM SETTLEMENT

Nomination is done by the depositor
Legal heirs get their rights by relationship
Nominee may be different for each deposit
Legal heirs are the same for all deposits
Nominee gets his right only on the death of the depositor
Legal heirs rights are based on devolution of property
Claim is settled only to one nominee
Claim is settled to one or more legal heirs
Discharge from nominee is adequate
Discharge from all legal heirs is necessary
PLEDGE
HYPOTHECATION

Means bailment or delivery of goods or documents by the borrower to the creditor with an intention to create a charge thereon as security for the debt
Hypothecation is an equitable charge in lender’s favour over goods
Ownership is with the borrower and possession is with the lender
Both ownership and possession is with the borrower
The right of sale of goods can be exercised by sending a notice to the borrower
Sale of goods can be made only with court intervention
Being contract of bailment, the banker has the right of duties of pledge
No such duties and responsibilities are thrust upon the lender
If the borrower is a limited company, the registration of charge is not necessary
Registration of charge is a must
GUARANTEE
SOLVENCY CERTIFICATE

Issued by the bank guaranteeing performance of a promise
It is a certificate which conveys the solvency of the customer
Contingent liability on the part of the bank
No such certificate
Protective clause is a must
No such clause is required
Issued in the format as required by the customer subject to approval by Legal section
Issued in the prescribed format designed by the bank by the branch where the application is submitted
GUARANTEE
INDEMNITY

It is a contract to perform the promise or discharged liability of a third person in case of his default
A contract by which one party promises to save another from the loss caused to him by the conduct of the promisor(indemnifier) by the conduct of any other person
The surety undertakes his obligation at the request of the principal debtor
No such request is required. Indemnifier agrees on his own
Three parties – Principal debtor, beneficiary(creditor) and the surety(guarantor)
Two parties – indemnifier and the beneficiary
The liability of the surety is dependant on the default of the third party
Depends on the possibility of risk or some loss
Surety on payment of debt to the creditor, can proceed on his own name against the principal debtor(right of subrogation)
Indemnifier cannot sue third parties his own
GARNISHEE ORDER
ATTACHMENT ORDER

Issued by the court on the application made by the judgment creditor in a situation where the judgment debtor refuses to pay debt payable to him
Attachment orders are issued by the assessing officer or tax recovery officer on the bank having any type of deposit in the name of the assessee from whom money is due or may become due
First order – NISI and then order absolute
Always in the absolute forms
Recovery of private dues
Recovery of dues as arrears of income tax
On clear balance available in the account at the time of receipt
Applicable on subsequent balance upto the time total amount is not recovered
SAFE CUSTODY OF ARTICLES
SAFE DEPOSIT LOCKERS

Bank is bailee and the customer is bailor
The bank is a lessor (landlord) and the customer is a lessee (tenant)
No space is leased out to the customer
A small locker in the lockers cabinet is leased out to the customer
There is no involvement of the customer with the operation of the vault where the valuables have been kept by the bank
The locker is opened jointly by the bank with master key and by the customer with hirer’s key
No requirement of password
Password must be asked before allowing the operation
The customer delivers the valuables/articles to the bank for keeping in safe custody
The customer himself keeps the articles in the locker
The customer can take charge according to the size of the articles
The customer operates the locker itself and may take out any article as per need



2 comments:

karthik said...

Sir i have a doubt about nominee,Is nominee should be a blood relation or
anyone can be nominee please tell me

GAURI SANKAR said...

Nominee can be any person. He can be one from the family namely; wife, husband, son, daughter, grandson, grand daughter etc., In case the depositor desires, he can nominate other than his close relatives also namely; his friend or some relative. However, the role of nominee is a trustee and just because he has been nominated he cannot claim any right over the property. In case of any dispute or claim from the legal heirs, he has to hand over the money to them as per law and the legal heirs have legitimate rights over the property