L

awan
dPr
act
iceo
fBan
kin
g

U
NIT-1
BANKE
RANDCUSTOME
R

BANK

A 
ban
k i
saf
inan
ciali
ns
ti
tu
tio
nli
cen
sedt
ore
cei
ved
epo
si
tsan
dmak
elo
ans
. 
Ban
ks 
mayal
so
p
rov
idef
inan
cials
erv
ice
ssu
chaswe
alt
hman
age
men
t,c
urr
enc
yex
chan
ge,
ands
afed
epo
si
tbo
xes
.
I
nmo
stc
oun
tri
es
, 
ban
ks 
arer
egu
lat
edb
yth
enat
ion
alg
ove
rnme
nto
rce
ntr
al 
ban
k.

BANKE
R

A 
ban
ker
 i
s 
one
 en
gag
ed 
i
n t
he 
bus
in
ess
 of
 re
cei
vi
ng 
oth
er 
per
son
s mo
ney
 i
n 
dep
osi
t,
 t
o b
e r
etu
rne
d 
o
n d
eman
d d
isc
oun
tin
g o
the
r p
ers
ons
' 
not
es,
 
and
 i
ss
ui
ng 
hi
s 
own
 fo
r c
irc
ulat
ion
. 
One
 wh
o p
erf
orms
 t
h
e b
usi
nes
s u
sual
ly 
tran
sac
ted
 by
 a 
ban
k.

BANKI
NG

Ban
kin
gre
fer
stot
heb
usi
nes
sac
tiv
ityo
fac
cep
tin
gan
dsaf
egu
ard
ingmo
neyo
wne
dbyo
the
r
i
ndi
vi
dual
san
den
tit
ie
san
dth
enl
end
ingo
utt
hisi
nor
dert
oear
nap
rof
it.

CU
STOME
R

Ac
cor
din
gtoS
irJo
hnP
age
t's
 vi
ew“
Toc
ons
ti
tut
ea 
cus
tome
r t
her
emu
stb
eso
mer
eco
gni
zab
le
c
our
seo
rhab
ito
fde
ali
ngi
nth
enat
ureo
fre
gul
arb
ank
ingb
usi
nes
s”.
The
remu
stb
efr
equ
ent
t
ran
sac
tio
nss
oast
obe
comeac
ust
ome
r.

Ap
ers
onwh
ohasab
ankac
cou
nti
nhi
snamean
dfo
rwh
omt
heb
ank
eru
nde
rtak
est
opr
ovi
det
he
f
aci
l
iti
esasab
ank
eri
sco
nsi
der
edt
obeac
ust
ome
r.

Toc
ons
ti
tut
eac
ust
ome
rth
efo
llo
win
gre
qui
reme
ntsmu
stb
efu
lfi
l
led
:

 Th
eban
kac
cou
ntmayb
esav
ing
s,c
urr
ento
rfi
xedd
epo
si
tmu
stb
eop
erat
edi
nhi
snameb
y
mak
ingan
ece
ssar
yde
pos
ito
fmo
ney
.
1|
Page
 L
awan
dPr
act
iceo
fBan
kin
g

 Th
ede
ali
ngb
etwe
ent
heb
ank
eran
dcu
sto
mermu
stb
eoft
hen
atu
reo
fth
eban
kin
g
b
usi
nes
s.Th
ege
ner
alr
elat
ion
shi
pbe
twe
enb
ank
eran
dcu
sto
mer
:

R
ELATI
ONS
HIPBE
TWE
ENBANKE
RANDCU
STOME
R

Th
eRe
lat
ionb
etwe
enBan
keran
dCu
sto
meri
sCo
ntr
act
ual
.I
tisr
egu
lat
edb
yge
ner
alp
rov
isi
onso
f
t
hel
awo
fco
ntr
act
.Th
eru
leso
fag
enc
y,wh
ereap
pli
cab
lean
dban
kin
gpr
act
ice
.Th
eremayb
e
t
hef
oll
owi
ngr
elat
ion
shi
pbe
twe
enb
ank
eran
dcu
sto
mer

1
. Ge
ner
alR
elat
ion
shi
p:
Ge
ner
alR
elat
ion
shi
pco
nsi
st
soft
hep
oss
ibl
ese
rvi
cest
hatab
ank
erp
rov
ide
stoac
ust
ome
r. 
2
.Sp
eci
alR
elat
ion
shi
p:
S
pec
ialR
elat
ion
shi
pco
nsi
st
soft
heo
bli
gat
ionan
dth
ecu
sto
meri
ns
tru
cti
onst
oth
eban
ker
. 
Wear
e
g
oin
gtod
isc
ussb
otht
her
elat
ion
shi
psi
nth
eup
comi
ngs
ect
ion
s.

Ge
ner
alR
elat
ion
shi
pbe
twe
enBan
keran
dCu
sto
mer

1
) De
bto
rAn
dCr
edi
torR
elat
ion
shi
p
Ac
red
ito
risap
ers
onwh
opr
ovi
desal
oant
oac
ust
ome
r.Th
eon
ewh
oisr
ece
ivi
ngt
hel
oani
s
c
all
edad
ebt
ori
.
e.
,ac
ust
ome
r.
Cas
e1:
 
Sup
pos
eHar
shadt
ookal
oano
fRs1l
akhf
romt
he 
Stat
eBan
kOfI
ndi
a(S
BI)
.He
re,
Har
shad
wi
l
lbec
ons
ide
redasad
ebt
or,
andS
BIwi
l
lbec
ons
ide
redasac
red
ito
r.
Cas
e2:
 
Sup
pos
eHar
shadh
asaCr
edi
tBal
anc
eac
cou
nti
nSBI
.Hec
red
ite
dRs1l
akht
oSBI
,s
ohe
re
H
ars
hadi
sac
red
ito
r,an
dSBI
isad
ebt
or.
 

2)Tr
ust
eean
dBe
nef
ici
aryR
elat
ion
shi
p
Wh
enab
ankp
rov
ide
sal
oani
nex
chan
gef
orac
ust
ome
r’
spl
edg
etog
ivead
ocu
men
t/v
alu
abl
e
as
setf
ors
ecu
rit
y,t
heb
ank
eri
sco
nsi
der
edat
rus
tee
,an
dth
ecu
sto
merwh
ore
cei
vest
hel
oani
s
c
all
edab
ene
fic
iar
y.
 
S
upp
oseS
BIg
aveH
ars
hadal
oano
fRs1
Lbyac
cep
tin
ghi
sgo
ld.
Her
e,S
BIi
sth
eTr
ust
ee,
and
H
ars
hadi
sth
ebe
nef
ici
ary
. 

2|
Page
 L
awan
dPr
act
iceo
fBan
kin
g

3
)Pr
inc
ipalan
dAg
ent
ABan
kerac
tsasanag
ento
fhi
scu
sto
meran
dpe
rfo
rmsan
umb
ero
fag
enc
yfu
nct
ion
se.
gth
e
b
ank
ersc
oll
ectc
heq
ueso
nhi
sbe
hal
fan
dmak
esp
ayme
nto
fvar
iou
sdu
eso
fhi
scu
sto
merv
iz.
i
ns
uran
cep
remi
um.

4
)Bai
l
eean
dBai
l
orR
elat
ion
shi
p
 
Aco
ntr
actwh
ereac
ust
ome
rgi
vest
heb
ank
erav
alu
abl
eas
seto
ran
yso
rto
fgo
odsf
ora
s
pec
ifi
cpe
rio
doft
ime(
notf
orp
oss
ess
io
n)i
scal
ledaBai
l
men
t.Ab
ankF
unc
tio
nasab
ail
eewh
eni
t
k
eep
sval
uab
lear
ti
cl
es,o
rname
nts
,ti
tl
ede
eds
,et
c.o
fit
scu
sto
mer
.Th
eban
ktak
esc
ust
odyo
f
t
hes
eth
ing
san
diti
simp
li
edt
her
esp
ons
ibi
l
ityo
fth
eban
ktor
etu
rnt
hes
eth
ing
ssaf
ely
. Th
ust
he
b
anki
sab
ail
eean
dth
ecu
sto
meri
sbai
l
or.
S
upp
oseH
ars
hadg
aveS
BIh
isR
ole
xwat
chf
or6mo
nth
s.F
or6mo
nth
s,t
heR
ole
xwi
l
lbet
ake
n
c
areo
fbyt
heS
BI.
Her
eHar
shadb
eco
mest
heBai
l
or,
andt
heS
BIb
eco
mest
heBai
l
ee.
 
P
led
geran
dPl
edg
eeR
elat
ion
shi
p
5
)Le
sso
ran
dLe
sse
e(Ban
k-L
ess
oran
dCu
sto
mer
-Le
sse
e)
Th
ere
lat
ion
shi
pbe
twe
ent
heb
ankan
dth
ecu
sto
meri
sth
ato
fle
sso
ran
dle
sse
e.Ban
ksl
eas
e(h
ire
l
ock
erst
oth
eirc
ust
ome
rs)t
hei
rimmo
vab
lep
rop
ert
ytot
hec
ust
ome
ran
dgi
vet
hemt
her
igh
tto
e
njo
ysu
chp
rop
ert
ydu
rin
gth
esp
eci
fi
edp
eri
odi
.
e.d
uri
ngt
heo
ffi
ce/b
ank
ingh
our
san
dch
arg
e
r
ent
als
.Ban
khast
her
igh
ttob
reak
-op
ent
hel
ock
eri
ncas
eth
elo
cke
rho
lde
rde
fau
ltsi
npay
men
t
o
fre
nt.Ban
ksd
ono
tas
sumean
yli
abi
l
ityo
rre
spo
nsi
bi
li
tyi
ncas
eofan
ydamag
etot
hec
ont
ent
s
k
epti
nth
elo
cke
r.Ban
ksd
ono
tin
sur
eth
eco
nte
ntsk
epti
nth
elo
cke
rsb
ycu
sto
mer
s. 

6)H
ypo
the
cat
oran
dHy
pot
hec
ate
e (
Ban
k-H
ypo
the
cat
eean
dCu
sto
mer
-Hy
pot
hec
ato
r)

Th
ere
lat
ion
shi
pbe
twe
enc
ust
ome
ran
dban
kerc
anb
eth
ato
fHy
pot
hec
ato
ran
dHy
pot
hec
ate
e.
Th
ish
app
enswh
ent
hec
ust
ome
rhy
pot
hec
ate
sce
rtai
nmo
vab
leo
rno
n-mo
vab
lep
rop
ert
yoras
set
s
wi
tht
heb
ank
eri
nor
dert
oge
tal
oan
.Int
hisc
ase
,th
ecu
sto
merb
ecamet
heH
ypo
the
cat
or,an
d
t
heBan
kerb
ecamet
heH
ypo
the
cat
ee.

S
pec
ialR
elat
ion
shi
pbe
twe
enBan
keran
dCu
sto
mer

Th
isr
elat
ion
shi
pin
clu
dest
her
igh
tsan
dob
li
gat
ion
sofab
ank
ert
owar
dst
hec
ust
ome
r.

3|
Page
 L
awan
dPr
act
iceo
fBan
kin
g

1
.R
 i
ghto
fse
tof
f

Th
eban
ker
shasr
igh
ttos
eto
fft
heac
cou
nto
fhi
scu
sto
mer
.Iti
sri
ght
sofb
ank
eran
dno
t
d
efi
nedi
nan
ylaw.
Iti
sal
soc
all
edasr
igh
tofc
omb
inat
iono
fac
cou
nt.
Thi
sri
ghtar
is
eswh
ent
wo
p
art
ie
sar
ede
bto
ran
daswe
llasc
red
ito
rtoe
acho
the
ri.
e.o
neac
cou
nti
sind
ebtb
alan
cean
d
o
the
rac
cou
nts
hou
ldb
einc
red
it.
Thi
sri
ghtar
is
eswh
enb
ankwan
tst
oco
mbi
nei
tsl
oand
uef
rom
ab
arr
owe
rfr
omh
isd
epo
si
tac
cou
nt.
Iti
sge
ner
all
ycr
ossc
lai
mfo
rli
qui
dat
edamo
untb
yth
eban
k
t
oit
scu
sto
mer
.Ri
ghto
fse
tof
fist
heb
ank
sri
ghtt
oco
mbi
net
woac
cou
nto
fth
esamep
ers
on.
Amo
ngt
wo,
oneac
cou
nts
hou
ldb
einc
red
itb
alan
cewh
ere
ass
eco
ndac
cou
nti
sind
ebtb
alan
ce.
As
d
ebti
sown
edb
yban
k,b
ankh
asr
igh
ttor
eco
vert
hed
ebtf
romt
hec
ust
ome
r’
sac
cou
ntt
her
eth
e
b
alan
cei
sav
ail
abl
e.

Co
ndi
ti
onsf
ore
xer
cis
in
gRi
ghto
fse
tof
f:

I
nfo
llo
win
gco
ndi
ti
onsb
ankc
ane
xec
uteh
isr
igh
tofs
eto
ff:

 Th
eres
hou
ldb
ede
bti
nth
eac
cou
ntwh
ichi
sown
edb
yth
eban
k.

 Th
eres
hou
ldb
ecr
edi
tbal
anc
einan
oth
erac
cou
nto
fsamec
ust
ome
r.

 De
pos
itac
cou
nts
hou
ldb
eint
hen
ameo
fcu
sto
mer

 Wh
eret
her
eisn
oan
yag
ree
men
t.

 Th
ede
bti
nth
eac
cou
nts
hou
ldn
otb
eac
cru
ingd
ue.

 R
eas
onab
len
oti
ces
hou
ldb
ese
ntt
oth
ecu
sto
merb
efo
ree
xer
cis
in
gri
ghto
fse
tof
f.

 S
eto
ffc
anb
eex
erc
ise
dinc
aseo
flo
anwh
ichar
eti
meb
ard
.

 Th
ese
tof
fcanb
eex
erc
ise
dont
hed
epo
si
tac
cou
nto
fin
div
idu
alan
dso
lep
rop
rie
tor
shi
pac
cou
nt.

 I
fth
elo
ani
sint
hej
oi
ntn
ame
,se
tof
fcanb
eex
erc
is
edo
ncr
edi
tbal
anc
eofj
oi
ntac
cou
nto
f
b
arr
owe
raswe
llast
hei
ndi
vi
dualac
cou
nto
fbo
tht
heb
arr
owe
r.

 Wh
ent
hel
oani
sint
hen
ameo
fpar
tne
rsh
ipf
ormt
hent
hes
eto
ffc
anb
eex
erc
ise
dont
hec
red
it
b
alan
cei
nth
enameo
ffi
rm,
par
tne
rsan
dan
yot
herp
art
ner
shi
pfi
rmwh
ichh
ass
amep
art
neras
ar
einb
arr
owi
ngf
irm.

 F
ore
xer
cis
in
gse
tof
fri
ghto
fban
kal
lbr
anc
heso
fth
eban
ksar
eco
nsi
der
edaso
ne.

4|
Page
 L
awan
dPr
act
iceo
fBan
kin
g

F
ors
afes
ideb
anks
hou
ldh
avet
otak
eau
tho
riz
edl
ett
ero
fse
tof
f.Th
ele
tte
rsh
oul
dbes
tat
ing
t
hatb
ankwi
l
lex
ecu
ter
igh
tofs
eto
fatan
yti
mewi
tho
utn
oti
cet
ocu
sto
merwh
ent
her
eisd
ebti
s
d
uef
orp
ayme
nt.

Au
tomat
ics
eto
ff

Au
tomat
ics
eto
ffwi
l
lhap
pen
sau
tomat
ical
ly.
The
rei
snon
eedt
otak
epe
rmi
ss
io
nofc
ust
ome
r.
Th
ist
ypeo
fse
tof
fisf
reef
roman
yle
galp
roc
eed
ing
.

Au
tomat
ics
eto
foc
cur
swh
ere
:

 Att
het
imeo
fde
atho
fac
cou
nth
old
er

 Wh
ent
hec
ust
ome
rbe
come
sin
sol
ven
t

 Gar
nis
heeo
rde
ris
sue
dbyc
our
t

 As
si
gnme
ntn
oti
cer
ece
ive
dbyb
ankf
romt
hec
ust
ome
rfo
rcr
edi
tbal
anc
e

 Wh
ent
hes
ecu
rit
yisal
read
ych
arg
edwi
tht
heb
ankan
dban
kre
cei
vesn
oti
ceo
fse
con
d
mo
rtg
age
.

R
igh
tofs
eto
ffc
ann
otb
eap
pli
cab
lei
nfo
llo
win
gci
rcu
mst
anc
es:

 S
eto
ffc
ano
tbeap
pli
edo
nfi
xedd
epo
si
t,wh
ichi
sno
tdu
efo
rpay
men
t.

 I
tcan
notb
eap
pli
edf
orad
jus
tme
nto
fte
rml
oano
rcas
hcr
edi
toro
ver
draf
tac
cou
nt
wh
ichar
eno
tov
erd
ue.

 I
fth
elo
anac
cou
nti
sint
hen
ameo
fin
div
idu
al

 Th
ese
tof
fcan
notb
eex
erc
is
edb
yban
kwh
ent
hed
epo
si
tac
cou
nto
fin
div
idu
ali
sjo
int
ly
wi
than
oth
er.

 Wh
eres
olep
art
ner
shi
pac
cou
nti
nwh
ichb
arr
owe
risp
art
ner

 I
ncas
eofmi
norac
cou
ntwh
ereb
arr
owe
rist
rus
teeo
rgu
ard
ian

2
. 
Ri
ghto
fli
en

Th
isi
sse
con
dri
ght
sofb
ank
er.
Lie
nme
ansi
tisr
igh
tofb
anko
rcr
edi
tort
ore
tai
npo
sse
ssi
ono
f

5|
Page
 L
awan
dPr
act
iceo
fBan
kin
g

g
ood
san
dav
ail
abl
ese
cur
it
ybe
lon
gst
obar
rowe
rord
ebt
ort
il
lth
ede
btd
uet
ode
bto
risp
aid
.

I
nge
ner
ali
ncas
eofl
i
ent
hep
oss
ess
io
nofg
oodan
dse
cur
it
yisav
ail
abl
ewi
tht
heb
ankt
il
lth
e
c
ust
ome
rdo
esn
otp
ayt
hee
nti
red
ebt
.

Th
isr
igh
tofl
i
eni
sav
ail
abl
eon
lyt
ogo
odsan
dav
ail
abl
ese
cur
it
yan
dno
tap
pli
cab
lef
or
av
ail
abl
ebal
anc
eint
heac
cou
nt.L
iend
oesn
otp
rov
ider
igh
ttoc
red
ito
rtos
alet
heg
oodan
d
s
ecu
rit
ie
s.Th
eli
enc
anb
eex
ecu
tedo
nbi
l
lofe
xch
ang
e,c
heq
ue,p
romi
ss
oryn
ote
,sh
earc
ert
ifi
cat
e
e
tc.
Thel
i
eni
sas
tat
uto
ryr
igh
tbu
tpar
ti
esmaye
xcl
udet
hisr
igh
tbymu
tualc
ons
ent
.

Ty
peso
fri
ghto
fli
eni
nban
kin
g:

 P
art
icu
larl
i
en:

Asp
ert
hes
ect
ion1
70o
fIn
dianCo
ntr
actAc
t,t
hec
red
ito
rhasr
igh
ttor
etai
ngo
odsan
dse
cur
it
ie
s
o
nwh
ichs
omel
abo
r(s
omewo
rkh
asb
eend
oneo
ngo
odsan
dse
cur
it
ie
s)h
asb
eend
onean
dti
l
lth
e
c
har
gep
ert
ain
ingt
oth
ath
asb
eenp
aid
.

 Ge
ner
all
i
en:

I
ncas
eofg
ene
rall
i
enc
red
ito
rhasr
igh
ttor
etai
ngo
odsan
dse
cur
it
ie
sofd
ebt
orf
oral
ldu
e
p
ayab
let
ohi
m.Th
eri
ghti
sav
ail
abl
eon
lyt
oban
ker
,po
li
cyb
rok
er,
att
orn
eyo
fth
ehi
ghc
our
t,
wh
aref
ing
erse
tc.
(Se
cti
on1
71o
fIn
dianCo
ntr
actAc
t).

 Ban
ker
sli
en:

Ban
ker
s’l
i
eni
sge
ner
all
i
enb
uti
tisi
mpl
i
edp
led
geb
ecau
seb
ank
erh
asr
igh
ttor
etai
naswe
llas
s
ellg
ood
san
dse
cur
it
yofb
orr
owe
raf
terg
ivi
ngh
imr
eas
onab
len
oti
ce.

Toe
xer
cis
eth
eri
ghto
fge
ner
all
i
ent
heb
ank
ers
hou
ldh
avel
awf
ult
akeo
veri
tsp
oss
ess
io
n.Th
e
b
ank
ers
hou
ldh
avet
ose
ndf
ewd
ays
’no
tic
etob
orr
owe
rbe
for
ese
lli
ngt
hes
ecu
rit
y.

 Ne
gat
ivel
i
en

Ne
gat
ivel
i
eni
sth
ede
clar
ati
onf
romb
arr
owe
rth
att
heg
ood
san
dse
cur
it
ie
sof
fer
edass
ecu
rit
y

6|
Page
 L
awan
dPr
act
iceo
fBan
kin
g

ar
eno
ten
cumb
ere
dan
dth
ebar
rowe
rwi
l
lno
tcr
eat
ean
ych
arg
eov
ert
hem wi
tho
utb
ank
s
p
ermi
ss
io
n.Th
eun
der
tak
ingd
oesn
otc
reat
ean
ych
ang
einf
avo
rofb
ank
.He
ncead
van
ceag
ain
st
n
egat
ivel
i
eni
sco
nsi
der
edasc
leanad
van
ce.

Wh
enc
anR
igh
tofL
ienb
eex
erc
ise
d?

F
oll
owi
ngar
eth
eco
ndi
ti
onswh
erer
igh
tofl
i
enc
anb
eex
erc
ise
d:

 Go
odso
rse
cur
it
ie
san
dde
btss
hou
ldb
eint
hes
amer
igh
tan
dins
amec
apac
ity
.

 L
oans
hou
ldb
elawf
ul.

 L
oans
hou
ldb
edu
eoro
ver
due
.

 R
eas
onab
len
oti
cei
stob
egi
vent
obar
rowe
r.

 R
igh
tofl
i
eni
sav
ail
abl
eong
ood
san
dse
cur
it
ie
sre
cei
vedi
nor
din
aryc
our
seo
fbu
si
nes
s.

 Th
eri
ghto
fli
eni
sav
ail
abl
ewh
ent
heg
ood
sors
ecu
rit
ie
sar
eint
hen
ameo
fbar
rowe
rori
n
g
uar
ant
or.

 I
tcanb
eex
erc
ise
dwh
eno
the
rdu
eso
fth
esameb
arr
owe
rar
eun
pai
d.Th
ego
odso
rse
cur
it
ie
s
r
emai
nsi
npo
sse
ssi
one
venaf
tero
the
rlo
anso
rdu
esar
epai
dag
ain
sts
uchs
ecu
rit
ie
s.

3
. 
Ban
ker
sri
ghto
fap
pro
pri
ati
on

I
nno
rmalc
our
seo
fbu
si
nes
sth
ecu
sto
mermai
ntai
nsmo
ret
hano
neac
cou
ntwi
tht
heb
anko
rhas
t
ake
nmo
ret
hano
nel
oanan
dhed
epo
si
tss
omemo
ney
.,i
nsu
chs
it
uat
ionh
ehasr
igh
ttoi
ndi
cat
e
b
ankt
owh
ichac
cou
nt,t
hed
epo
si
te
damo
unts
hou
ldb
ecr
edi
te
d.I
fsu
chi
ndi
cat
ioni
sgi
venb
yth
e
c
ust
ome
rth
enb
ankb
ind
stof
oll
owt
heg
ive
nin
str
uct
ion
.

I
nso
mec
ase
swh
enc
ust
ome
rdo
esn
ote
xer
cis
ehi
sri
ghtt
oin
dic
ateac
cou
nt,an
dth
enb
ankc
an
e
xer
cis
ehi
sri
ghto
fap
pro
pri
ati
on.I
fth
erear
emo
ret
hano
ned
ebt
sou
tst
and
ingi
ncu
sto
mer
s
ac
cou
ntt
hanb
ankc
and
epo
si
tth
eamo
untasap
ayme
nto
fan
yde
btb
yap
ply
ingr
igh
tof
ap
pro
pri
ati
on.Ban
kerc
anap
plyt
hisr
igh
tag
ain
stt
imeb
ardd
ebt
.On
cet
her
igh
tofap
pro
pri
ati
on
e
xer
cis
edi
tcan
notb
ere
ver
sed
.Se
cti
on5
9,60an
d61o
fIn
dianCo
ntr
actAc
tde
alswi
than
d
e
lab
orat
est
heap
pro
pri
ati
ono
fpay
men
t.

Asp
erS
ect
ion5
9ofI
ndi
anc
ont
rac
tAc
t,i
fth
ede
bto
rowe
sse
ver
ald
ebt
stot
hec
red
ito
ran
d

7|
Page
 L
awan
dPr
act
iceo
fBan
kin
g

p
aidc
ert
ainamo
unt
,lat
erh
ere
que
ste
dtoc
red
ito
rtoc
red
itp
aidamo
unti
nap
art
icu
lard
ebt
ac
cou
nti
nor
dert
odi
sch
arg
eth
esai
dac
cou
nt.I
fcr
edi
torac
cep
tst
her
equ
estt
henc
red
ito
r
b
oun
dtoac
tac
cor
din
glyasp
ert
her
equ
esto
fde
bto
r.Th
isc
ond
iti
oni
sap
pli
cab
leo
nlywh
ent
her
e
i
sse
ver
ald
ebt
san
dfo
rsi
ngl
ede
bt.

S
ect
ion60o
fIn
dianCo
ntr
actac
t i
mpl
i
eswh
end
ebt
orh
avi
ngs
eve
rald
ebi
tsan
dpai
dso
meamo
unt
wi
tho
utan
yre
que
sto
rin
str
uct
ionh
owt
hep
ayme
nti
stob
eus
edt
hent
her
igh
tofap
pro
pri
ati
on
v
est
edt
ocr
edi
tor
.

Ac
cor
din
gtos
ect
ion61o
fIn
dianCo
ntr
actAc
t,wh
ent
hes
it
uat
ionwh
eren
oneo
fth
epar
ty
ap
pro
pri
ati
ont
ose
ttl
eth
iss
it
uat
iont
her
igh
tofap
pro
pri
ati
oni
sap
pli
cab
leb
ylaw.
Set
tle
men
tof
al
lth
ede
btsar
edo
nei
nac
cor
dan
cewi
tht
heo
rde
roft
het
imet
heyh
avei
ncu
rre
d.Wh
ent
he
d
ebt
sar
eins
amet
imet
henal
lth
ede
btsar
ese
ttl
edp
rop
ort
ion
ate
ly.

Ap
pli
cab
il
it
yofCl
ayt
onsR
ule
:

Th
eru
lei
sap
pli
cab
lei
ncas
eofd
eat
h,i
ns
olv
enc
y,i
ns
ani
tyo
fjo
intb
arr
owe
rorp
art
nero
r
g
uar
ant
oro
rre
ti
reme
nto
fpar
tne
roratt
het
imeo
fre
voc
ati
ono
fgu
aran
teeb
ygu
aran
tor
.

Cl
ayt
onsr
ulei
sre
lat
edt
oap
pro
pri
ati
ono
fpay
men
tan
dap
pli
cab
lei
ncas
eofr
unn
ingac
cou
nto
f
b
arr
owe
rli
kec
ashc
red
ito
rov
erd
raf
t.Asp
erCl
ayt
onsr
ulec
red
ite
ntr
ywi
l
lse
tof
fde
btsi
n
c
hro
nol
ogi
calo
rde
roft
ime
.Th
isme
anst
hatf
irs
tit
emi
nde
bts
idewi
l
lbed
isc
har
gedf
irs
tby
c
red
itan
dsoo
n.

E
xamp
le:I
ncas
eofc
ashc
red
itac
cou
nto
fap
art
ner
shi
pfo
rmt
her
ewasad
ebtb
alan
ceo
fRs
.
1
0.0
0lak
h,wh
ereo
neo
fth
epar
tne
rsd
ied
.Th
eban
kco
nti
nue
sop
erat
ioni
nth
eac
cou
nt.I
nsu
ch
s
it
uat
ioni
fth
eRs
.8.
00l
akhwe
rec
red
ite
dint
hisac
cou
ntan
dRs
.5.
00l
akhwe
rewi
thd
rawt
he
e
stat
eofd
ece
ase
dpar
tne
risl
i
abl
eon
lyf
orR
s.2
.00l
akhi
.
e.R
s.1
0.0
0lak
hmi
nusR
s.8
.00l
akh
.

4
.Ri
ght
sofb
ank
ert
o c
har
gei
nte
res
tan
dse
rvi
cec
har
ge

Asac
red
ito
rab
ank
erh
ast
her
igh
ttoc
har
gei
nte
res
t,s
erv
icec
han
gean
dpr
oce
ssi
ngf
eeo
nth
e
l
oanan
dad
van
ces
anc
tio
nedt
ocu
sto
mer
.In
ter
esti
sch
arg
esmo
nth
ly,
quar
ter
lyo
ran
nual
ly.

8|
Page
 L
awan
dPr
act
iceo
fBan
kin
g

5
. 
Ri
ght
sofb
ank
ert
ocl
oset
heac
cou
nt.

I
fth
ecu
sto
meri
sno
tmai
ntai
ni
ngp
rop
erac
cou
ntal
sot
her
eisc
ont
inu
ousd
ish
ono
rofc
heq
uet
hen
wi
thd
uep
rop
ern
oti
ceb
ankh
aveal
lri
ghtt
ocl
oset
heac
cou
nt.
Bef
orec
los
in
gth
eac
cou
ntb
ank
er
s
hou
ldh
aves
entatl
eas
ton
emo
nthn
oti
ce.

6.
Rig
htt
ole
vyc
ommi
ss
io
nan
dse
rvi
cec
har
ges

Al
ongwi
thi
nte
res
t,b
ank
sal
soh
avet
her
igh
ttol
evyac
ommi
ss
io
nan
dse
rvi
cec
har
gesf
ort
he
s
erv
ice
sre
nde
red
.Th
ese
rvi
cer
end
ere
dbyt
heb
ankmi
ghtb
eSMSn
oti
fi
cat
ions
erv
ice
,re
tai
l
b
ank
ingan
dsoo
n.Ban
ksc
anal
sod
ebi
tth
esec
har
gesf
romt
hec
ust
ome
r'sb
ankac
cou
nt.

Ob
li
gat
ion
sofaBan
ker

1
. Th
eob
li
gat
iont
oho
nou
rCu
sto
mer
’sCh
equ
es

Th
ede
pos
itac
cep
tedb
yab
ank
eri
shi
sli
abi
l
iti
esr
epay
abl
eond
eman
doro
the
rwi
se
.Th
eban
keri
s
t
her
efo
reu
nde
ras
tat
uto
ryo
bli
gat
iont
oho
norh
isc
ust
ome
r’
sch
equ
eint
heu
sualc
our
se.

Ac
cor
din
gtos
ect
ion3
1oft
hen
ego
tiab
lei
ns
tru
men
tsAc
t18
81,t
heb
ank
eri
sbo
undt
oho
norh
is
c
ust
ome
r’
sch
equ
epr
ovi
dedb
yfo
llo
win
gco
ndi
ti
onsar
efu
lfi
l
led
:

 Av
ail
abi
l
ityo
fsu
ffi
ci
entf
und
soft
hec
ust
ome
r.
 Th
eco
rre
ctn
esso
fth
ech
equ
e.
 P
rop
erp
res
ent
ati
ono
fth
ech
equ
e.
 Ar
eas
onab
let
imef
orc
oll
ect
ion
.
 P
rop
erd
rawi
ngo
fth
ech
equ
e

2
.Th
eob
li
gat
iont
omai
ntai
nth
ese
cre
cyo
fth
ecu
sto
merac
cou
nts

Th
eban
keri
sino
bli
gat
iont
otak
eut
mos
tcar
eink
eep
ings
ecr
ecyab
outt
heac
cou
nto
fhi
s
c
ust
ome
r.Byk
eep
ings
ecr
ecyt
hatt
heac
cou
ntb
ook
soft
heb
ankwi
l
lno
tbet
hro
wno
pent
oth
e
p
ubl
i
corg
ove
rnme
nt,
off
ici
al
sift
hef
oll
owi
ngr
eas
onab
les
it
uat
iond
oesn
oto
ccu
r:

9|
Page
 L
awan
dPr
act
iceo
fBan
kin
g

 Di
scl
ose
rofi
nfo
rmat
ionr
equ
ire
dbyl
aw.
 Di
scl
ose
rpe
rmi
tt
edb
yban
ker
s’p
rac
tic
ean
dwag
es.
Thep
rac
tic
ean
dwag
esar
e
c
ust
omar
yamo
ngs
tban
ker
spe
rmi
tdi
sc
los
ureo
fce
rtai
nin
for
mat
ionan
dth
efo
llo
win
g
c
irc
ums
tan
ces
:

o Wi
the
xpr
esso
rimp
li
edc
ons
ento
fth
ecu
sto
mer
.
o Ban
kerr
efe
ren
ce.
o Du
tyt
oth
epu
bli
ctod
isc
los
e.

NE
GOTI
ABL
EINS
TRU
MENTS

Th
ewo
rd“
Neg
oti
abl
e”me
ans“
Tran
sfe
rab
leb
yde
li
ver
y”,an
dth
ewo
rd“
I
nst
rume
nt”me
ans“
A
wr
it
tend
ocu
men
tbywh
ichar
igh
tisc
reat
edi
nfav
oro
fso
mep
ers
on”
.Th
us,
thet
erm“
Neg
oti
abl
e
i
ns
tru
men
t”l
i
ter
all
yme
ans“
awr
it
tend
ocu
men
ttr
ans
fer
abl
ebyd
eli
ver
y”.

Ac
cor
din
gtoS
ect
ion1
3oft
heNe
got
iab
leI
ns
tru
men
tsAc
t,“
Ane
got
i
abl
ein
str
ume
ntme
ansa
p
romi
s
sor
yno
te,
bi
llo
fex
cha
ngeo
rch
equ
epa
yab
lee
it
hert
oor
dero
rtob
ear
er.
”

A 
Neg
oti
abl
eIn
str
ume
nt 
i
sad
ocu
men
tgu
aran
tee
ingt
hep
ayme
nto
fas
pec
ifi
camo
unto
fmo
ney
,
e
it
hero
nde
man
doratas
ett
ime
,wi
tht
hep
aye
rus
ual
lyn
ame
dont
hed
ocu
men
t.

TYP
ESOFNE
GOTI
ABL
EINS
TRU
MENTS

 P
romi
ss
oryNo
tes

Ap
romi
ss
oryn
oter
efe
rst
oawr
it
tenp
romi
set
oit
sho
lde
rbyane
nti
tyo
rani
ndi
vi
dualt
opaya
c
ert
ains
umo
fmo
neyb
yap
re-
dec
ide
ddat
e.I
not
herwo
rds
,Pr
omi
ss
oryn
ote
ssh
owt
heamo
unt
wh
ichs
ome
oneo
west
oyo
uory
ouo
wet
oso
meo
net
oge
the
rwi
tht
hei
nte
res
trat
ean
dal
sot
he
d
ateo
fpay
men
t.

 Bi
l
lso
fEx
chan
ge

Bi
l
lso
fex
chan
ger
efe
rtoal
egal
lyb
ind
ing
,wr
it
tend
ocu
men
twh
ichi
ns
tru
ctsap
art
ytop
aya
p
red
ete
rmi
neds
umo
fmo
neyt
oth
ese
con
d(an
oth
er)p
art
y.S
omeo
fth
ebi
l
lsmi
ghts
tat
eth
at

1
0|Page
 L
awan
dPr
act
iceo
fBan
kin
g

mo
neyi
sdu
eonas
pec
ifi
edd
atei
nth
efu
tur
e,o
rth
eymi
ghts
tat
eth
att
hep
ayme
nti
sdu
eon
d
eman
d.

I
tist
oben
ote
dth
atwh
ent
heb
il
lofe
xch
ang
eisi
ss
uedb
yth
efi
nan
ciali
ns
ti
tut
ion
s,i
t’
sus
ual
ly
r
efe
rre
dtoasab
ankd
raf
t.An
difi
tisi
ss
uedb
yani
ndi
vi
dual
,iti
sus
ual
lyr
efe
rre
dtoasa
t
rad
edr
aft
.

Ab
il
lofe
xch
ang
epr
imar
il
yac
tsasap
romi
ss
oryn
otei
nth
ein
ter
nat
ion
alt
rad
e;t
hee
xpo
rte
ror
s
ell
er,i
nth
etr
ans
act
ionad
dre
sse
sab
il
lofe
xch
ang
etoani
mpo
rte
rorb
uye
r.At
hir
dpar
ty,
u
sual
lyt
heb
ank
s,i
sap
art
ytos
eve
ralb
il
lso
fex
chan
geac
tin
gasag
uar
ant
eef
ort
hes
e
p
ayme
nts
.I
the
lpsi
nre
duc
ingan
yri
skwh
ichi
spar
tan
dpar
celo
fan
ytr
ans
act
ion
.

 Ch
equ
es

Ac
heq
uer
efe
rst
oani
ns
tru
men
tinwr
it
ingwh
ichc
ont
ain
sanu
nco
ndi
ti
onalo
rde
r,ad
dre
sse
dtoa
b
ank
eran
diss
ign
edb
yap
ers
onwh
ohasd
epo
si
te
dhi
smo
neywi
tht
heb
ank
er.
Thi
sor
derr
equ
ire
s
t
heb
ank
ert
opayac
ert
ains
umo
fmo
neyo
nde
man
don
lyt
oth
ebe
are
rofc
heq
ue(
per
sonh
old
ing
t
hec
heq
ue)o
rtoan
yot
herp
ers
onwh
oiss
pec
ifi
cal
lyt
obep
aidasp
eri
ns
tru
cti
onsg
ive
n.Ch
equ
es
c
oul
dbeag
oodwayo
fpay
ingd
iff
ere
ntk
ind
sofb
il
ls
.
Ont
heo
the
rsi
de,
che
que
sar
eco
mpar
ati
vel
yas
lowme
tho
dofp
ayme
ntan
dmi
ghtt
akes
omet
ime
t
obep
roc
ess
ed.

CH
ARACTE
RIS
TICSOFNE
GOTI
ABL
EINS
TRU
MENTS

 E
asyTr
ans
fer
abi
l
ity
:An
ego
tiab
lei
ns
tru
men
tisf
ree
lyt
ran
sfe
rab
le.U
sual
ly,wh
enwet
ran
sfe
r
an
ypr
ope
rtyt
oso
meb
ody
,wear
ere
qui
redt
omak
eat
ran
sfe
rde
ed,
geti
tre
gis
ter
ed,
pays
tamp
d
uty
,et
c.Bu
t,s
uchf
ormal
i
tie
sar
eno
tre
qui
redwh
il
etr
ans
fer
rin
gan
ego
tiab
lei
ns
tru
men
t.Th
e
o
wne
rsh
ipi
sch
ang
edb
yme
red
eli
ver
y(wh
enp
ayab
let
oth
ebe
are
r)o
rbyv
ali
den
dor
seme
ntan
d
d
eli
ver
y(wh
enp
ayab
let
oor
der
).F
urt
her
,wh
il
etr
ans
fer
rin
giti
sal
son
otr
equ
ire
dtog
ivean
oti
ce
t
oth
epr
evi
oush
old
er.
 Ti
tl
e:Ne
got
iab
il
it
yco
nfe
rsab
sol
utean
dgo
odt
it
leo
nth
etr
ans
fer
ee.
Itme
anst
hatap
ers
onwh
o
r
ece
ive
san
ego
tiab
lei
ns
tru
men
thasac
learan
dun
dis
put
abl
eti
tl
etot
hei
ns
tru
men
t.H
owe
ver
,th
e
t
it
leo
fth
ere
cei
verwi
l
lbeab
sol
ute
,on
lyi
fheh
asg
ott
hei
ns
tru
men
ting
oodf
ait
han
dfo
ra

1
1|Page
 L
awan
dPr
act
iceo
fBan
kin
g

c
ons
ide
rat
ion
.Al
sot
her
ece
ive
rsh
oul
dhav
enok
nowl
edg
eoft
hep
rev
iou
sho
lde
rhav
ingan
yde
fec
t
i
nhi
sti
tl
e.S
uchap
ers
oni
skn
ownash
old
eri
ndu
eco
urs
e.
 Mu
stb
einwr
it
ing
: An
ego
tiab
lei
ns
tru
men
tmu
stb
einwr
it
ing
.Th
isi
ncl
ude
shan
dwr
it
ing
,ty
pin
g,
c
omp
ute
rpr
int
outan
den
grav
ing
,et
c.
 U
nco
ndi
ti
onalOr
der
:Ine
ver
yne
got
iab
lei
ns
tru
men
tth
eremu
stb
eanu
nco
ndi
ti
onalo
rde
ror
p
romi
sef
orp
ayme
nt.
 P
ayme
nt:
 
Thei
ns
tru
men
tmu
sti
nvo
lvep
ayme
nto
fac
ert
ains
umo
fmo
neyo
nlyan
dno
thi
nge
lse
.
F
ore
xamp
le,
onec
ann
otmak
ea 
pro
mis
sor
yno
te 
onas
set
s,s
ecu
rit
ie
s,o
rgo
ods
.
 Th
eti
meo
fpay
men
tmu
stb
ece
rtai
n:
 I
tme
anst
hatt
hei
ns
tru
men
tmu
stb
epay
abl
eatat
ime
wh
ichi
sce
rtai
ntoar
riv
e.I
fth
eti
mei
sme
nti
one
das‘
whe
nco
nve
nie
nt’i
tisn
otan
ego
tiab
le
i
ns
tru
men
t.H
owe
ver
,ift
het
imeo
fpay
men
tisl
i
nke
dtot
hed
eat
hofap
ers
on,
iti
sne
ver
the
les
sa
n
ego
tiab
lei
ns
tru
men
tasd
eat
hisc
ert
ain
,th
oug
hth
eti
met
her
eofi
sno
t.
 Th
epay
eemu
stb
eac
ert
ainp
ers
on:
 
Itme
anst
hatt
hep
ers
oni
nwh
osef
avo
rth
ein
str
ume
nti
s
mad
emu
stb
ename
dord
esc
rib
edwi
thr
eas
onab
lec
ert
ain
ty.Th
ete
rm‘
per
son
’in
clu
desi
ndi
vi
dual
,
b
odyc
orp
orat
e,t
rad
eun
ion
s,e
vens
ecr
etar
y,d
ire
cto
rorc
hai
rmano
fani
ns
ti
tut
ion
.Th
epay
eec
an
al
sob
emo
ret
hano
nep
ers
on.
 S
ign
atu
re:
 An
ego
tiab
lei
ns
tru
men
tmu
stb
eart
hes
ig
nat
ureo
fit
smak
er.
Wit
hou
tth
esi
gnat
ureo
f
t
hed
rawe
rort
hemak
er,
thei
ns
tru
men
tsh
alln
otb
eav
ali
don
e.
 De
li
ver
y: 
Del
i
ver
yoft
hei
ns
tru
men
tise
sse
nti
al
.An
yne
got
iab
lei
ns
tru
men
tli
keac
heq
ueo
ra
p
romi
ss
oryn
otei
sno
tco
mpl
etet
il
liti
sde
li
ver
edt
oit
spay
ee.
Fore
xamp
le,
youmayi
ss
ueac
heq
ue
i
nyo
urb
rot
her
’sn
ameb
uti
tisn
otan
ego
tiab
lei
ns
tru
men
tti
l
liti
sgi
vent
oyo
urb
rot
her
.
 S
tamp
ing
: 
Stamp
ingo
f Bi
l
lso
fEx
chan
ge 
and
 Pr
omi
ss
oryNo
tes
 i
sman
dat
ory
.Th
isi
sre
qui
redasp
er
t
heI
ndi
anS
tampAc
t,1
899
.Th
eval
ueo
fst
ampd
epe
ndsu
pont
hev
alu
eoft
hep
ron
oteo
rbi
l
lan
d
t
het
imeo
fth
eirp
ayme
nt.
 R
igh
ttof
il
esu
it:
 
Thet
ran
sfe
reeo
fan
ego
tiab
lei
ns
tru
men
tise
nti
tl
edt
ofi
l
eas
ui
tinh
iso
wn
n
amef
ore
nfo
rci
ngan
yri
ghto
rcl
ai
mont
heb
asi
soft
hei
ns
tru
men
t.
 No
tic
eoft
ran
sfe
r: 
I
tisn
otn
ece
ssar
ytog
iven
oti
ceo
ftr
ans
fero
fa 
neg
oti
abl
ein
str
ume
nt 
tot
he
p
art
yli
abl
etop
ay.
 P
res
ump
tio
ns:
 
Cer
tai
npr
esu
mpt
ion
sap
plyt
oal
lne
got
iab
lei
ns
tru
men
ts,f
ore
xamp
lec
ons
ide
rat
ion
i
spr
esu
medt
ohav
epas
sedb
etwe
ent
het
ran
sfe
roran
dth
etr
ans
fer
ee.
 P
roc
edu
ref
ors
ui
ts
: 
InI
ndi
aas
pec
ialp
roc
edu
rei
spr
ovi
dedf
ors
ui
tso
npr
omi
ss
oryn
ote
san
dbi
l
ls

1
2|Page
 L
awan
dPr
act
iceo
fBan
kin
g

o
fex
chan
ge.
 Nu
mbe
roft
ran
sfe
r: 
The
sei
ns
tru
men
tsc
anb
etr
ans
fer
redi
nde
fin
ite
lyt
il
lth
eyar
eatmat
uri
ty
.
 R
uleo
fev
ide
nce
: 
The
sei
ns
tru
men
tsar
einwr
it
ingan
dsi
gne
dbyt
hep
art
ie
s,t
heyar
eus
edas
e
vid
enc
eoft
hef
acto
fin
deb
tne
ssb
ecau
set
heyh
aves
pec
ialr
ule
sofe
vid
enc
e.
 E
xch
ang
e: 
The
sei
ns
tru
men
tsr
elat
etop
ayme
nto
fce
rtai
nmo
neyi
nle
galt
end
er,t
heyar
e
c
ons
ide
redass
ubs
ti
tut
esf
ormo
neyan
dar
eac
cep
tedi
nex
chan
geo
ffg
ood
sbe
cau
sec
ashc
anb
e
o
btai
nedatan
ymo
men
tbyp
ayi
ngas
mal
lco
mmi
ss
io
n.

As
si
gnme
nt

An
swe
rth
efo
llo
win
ges
sayt
ypeq
ues
ti
ons
.

Q1
.Wh ati
sBanke
r’sLi
en?Di
stin
gui
shbet
weenGeneralLie
nan dSpeci
alLi
en.
Q2
.Whatarethecondi
ti
onsthattheban
kershou
lds ati
sfytoexer
cis
eLien
?
Q3
.Ho
wan dund
erwh atci
rcumstan
cescanab an
kere xer
cis
eh i
sri
ghtofsetof
f?
Q4
.Ex
plai
nthegen
eralandspeci
alrel
ati
onshi
pbet
we enBankerandcust
omer.
Q5
.Whatisanego
tiabl
eins
trument
?Dist
ing
uis
hbetwe e
np ro
miss
orynote
san db
il
lso
fex
chan
ge.

No
tes
:

 Mai
ntai
nas
epar
aten
ote
boo
kfo
rth
iss
ubj
ect
.
 Yo
une
edn
otc
opyd
ownt
hes
tud
ymat
eri
al
s.
 As
si
gnme
ntmu
stb
ewr
it
ten
,sc
ann
edan
dfo
rwar
dedt
omye
mai
lI
Dpar
izh
aok
ip@g
mai
l
.co
m
th
o
norb
efo
re1
2no
ono
f25 Ju
ne2
021(
Fri
day
)
 Th
esu
bje
cto
fth
emai
lyo
use
ndmu
stc
ont
ainy
ourF
ullName
,Ro
ll.
No.
andS
eme
ste
r.
 F
orq
uer
iesan
ddo
ubt
s,c
ont
actme@8
310
10761
0be
twe
en1
0a.
m.an
d3p
.m.

1
3|Page