Notice of Set-Off

Notice of set-off is essential for banks and customers as well. Here is some situation when notice of set-off is 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 a difficult situation if cheques, drawn on an account are returned for want of funds, as a result of the credit balance has 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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