MAJOR LAWS IMPACTING

OPERATIONS IN BANK ACCOUNTS:

 The Negotiable Instruments Act. 1881

 The Banking Companies Ordinance, 1962
 The Companies Ordinance 1984
 The Contract Act, 1872
 Financial Institutions (Recovery of Finances) Ordinance, 2001
 The Partnership Act, 1932
 The Transfer of Property Act, 1992
 The Bankers Book Evidence Act, 1891
 The Power of Attorney Act, 1882
Others.
BANKER:-
THOMSON’S DICTIONARY OF BANKING:-

 The word bank is said to be derived from

the Italian word “Banco” a bench. The
early bankers, the Jews in Lombarday,
transacted their business at the bench in
the market place. When a banker failed
his “banco” was broken up by the people,
whence on word bankrupt.
DICTIONARY OF BANKING BY
F.E PERRY.

 The bank is an establishment which

deals in money, receiving it on deposit
from customers, honouring customer’s
drawings against such deposits on
demand, collecting cheques for
customers or lending or investing surplus
deposits until they are required for
repayment.
SIR JOHN PAGET’S 1912

 A bank or banker is a corporation or person

(or group of persons) who accepts money
on current accounts, pay cheques drawn
upon such account on demand and collect
cheques for customers; that if such
minimum services are afforded to all and
sundry without restriction of any kind, the
business is a banking business.
BUSINESS OF BANKING
COMPANIES

 The borrowing, raising or taking of deposits

of money.
 The lending or advancing the money either
upon or without security.
 The drawing, making, accepting, discounting
buying, selling, collecting, and dealing in bills
of exchange, promissory notes, coupons,
drafts, bills of lading, railway receipts,
warrants, debentures, certificates, Scripps
and other instruments and securities.
BUSINESS OF BANKING
COMPANIES

 The granting and issuing of letters of credit and

travelers cheques.
 The buying and selling of foreign exchange.
 The acquiring, holding, issuing on commission
underwriting and dealing in stock, funds
shares, debentures, bonds and investments of
all kinds.
 The purchasing and selling of bonds, Scripps
or others forms of securities on behalf of the
constituents.
BUSINESS OF BANKING
COMPANIES

 The negotiating of loans and advances.

 The receiving of all kinds of bonds,
Scripps or valuables for safe custody.
 The providing of safe deposit vaults for
custody of valuables of customers.
 The collecting and transmitting of money.
BUSINESS OF BANKING
COMPANIES

 A banking company may act as an agent.

 A bank may carry on and transact every
kind of guarantee and indemnity
business.
 It may manage, sell and realise any
property which may come into its
possession in satisfaction of its claims.
THE CUSTOMER
 Time Factor Theory:-
 Sir John Paget
 “to constitute a customer there must be some
recognizable course or habit of dealing in the nature
of regular banking business. It is difficult to reconcile
the idea of a single transaction with that of a
customer”.
 Thus two things are necessary.
 some recognizable course or habit of dealing
between him (customer) and the bank.
 That the transactions were to be in the nature of
regular banking business.
THE CUSTOMER
 Heber L. Hart
 “A customer is a person who has an account with a banker”
 Bills of Exchange Act (England) 1882 (s, 82)
 “ A person is a customer of a bank if he keeps either a deposit
account with the bank or it would seems, if the bank systematically
transacts with him, any kind of banking business.
 Lord Davey, (in the course of his judgement observed as under)
 “It is true that there is no definition of the customer in the Act but it
is a well known expression, and I think there must be some sort of
account either a deposit or a current account or some similar
relation to make a man a customer of a banker.