Notice of set-off is essential for bank and customer as well. Here are some situation when notice of set-off are required.
It is sometimes argued that when two or more accounts are opened by a customer. His intention is to keep them separate and so, the accounts cannot be arbitrarily combined without notice to the customer.
Notice of set-off
It is quite possible that the banker may be faced with difficult situation if cheques, drawn on an account are returned for want of fund, as a result of the credit balance having been set-off.
It is, therefore, advisable for the bank to give reasonable notice to the customer of its intention to exercise its right of set-off.
Some bankers obtain a letter of set-off duly signed by the customer according to which the banker makes his right to combine the accounts without notice to the customer.
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