1.Ms. Abcede Efgehi deposited in Andalucia Bank. Ms. Jaklymno Pequir alleges that the money deposited by Ms. Abcede belongs to her. Ms. Abcede withdraws from Andalucia Bank.

Is Andalucia Bank liable? Justify your answer

Answer:

This is a case of Bank - customer relationship and the obligations of bank and limitations on the liability. When Ms. Abcede Efgehi has deposited in Andalucia Bank, the banking-customer relationship and associated obligations have formed between them. As per this, the Bank is obligated to return the deposit along with agreed rate of interest, back to Ms. Abcede, whenever she withdraws money, along with associated terms and conditions.

The Bank's obligation shall only be limited only if there is any order from any Court or Legal body or Regulatory Authorities to hold the money. Apart from that, Bank shall not be liable. In this the allegation raised by Ms Jaklymno is not yet crystallised interms of any court order and hence mere allegations doesn't control the duties of the bank to allow Ms Abcede to withdraw her money.

2.Esteuvew Ekswayze deposits in Kayamanan Bank. Kayamanan Bank loans out money to Mr. Esteuvew

If Mr. Esteuvew defaults in payment, can Kayamanan Bank off of the deposits in its hands for the payment of Mr. Esteuvew indebtness? Justify your answer

Answer:

As per the process, in case of any default in loan repayments, there shall be notices issued to the customer to remit the amount along with the accrued interest as well as the applicable penal charges. Despite notices served, if the customer doesn't service the loan payments, the bank has right to appropriate the funds available in savings account and deposit accounts pertaining to the same customer.

This shall be part of and as per the terms and conditions of the Loan agreement which would have been signed between the bank and the customer. A power would be granted to the bank (while signing the loan agreement) to provide the right of lien and set-off with the Bank and the bank may use this right anytime to utilise any money belonging to the customer and deposited with the bank, towards any outstanding dues.

So, Kayamanan Bank can set-off the deposits (Pertaining to Mr. Esteuvew) in its hands for the payment of Mr. Esteuvew indebtness.