Banking Law and Practice

Preface ix
PART 1 BANK-CUSTOMER RELATIONSHIP AND ACCOUNT OPENING 1
1 Contractual Relationships in Law and Practice 3
Learning Objectives 3
Introduction 4
Definition of 'Customer' 4
Nature of the Banker-Customer Relationship 5
Laws and Practice 7
Mandates 9
Power of Attorney 11
Limitation of Actions 14
Appropriation of Payments 15
Set-off 17
Banker's Lien 20
Banker's Duty of Secrecy 21
Personal Data and Consumer Credit Data 28
Statement of Account or Passbook 33
Wrongful Dishonour of Cheques 34
Exemption Clauses 36
Summary 37
Key Terms 38
Study Guide 39
Further Reading 39
2 Opening and Conduct of Accounts 41
Learning Objectives 41
Introduction 42
Opening of an Account 42
Conduct of Account 44
Closing of Account 51
Opening and Conduct of Accounts for Various Customers 52
Defi nition of Different Types of Authorities 82
Anti-Money Laundering and Counter-Terrorist Financing 85
Summary 98
Key Terms 99
Study Guide 100
Further Reading 100
PART 2 BANKING OPERATIONS 101
3 Bills of Exchange and Promissory Notes 103
Learning Objectives 103
Introduction 104
Negotiable Instruments 104
Bills of Exchange 107
Promissory Notes 124
Summary 127
Key Terms 128
Study Guide 128
Further Reading 129
4 Other Banking Operations 131
Learning Objectives 131
Introduction 132
Credit Cards 132
Direct Debiting 138
Automated Teller Machines 141
Electronic Funds Transfer at the Point of Sale 143
Investment Advice 144
Safe Custody 146
Other Banking Services 150
Internet and Phone Banking 152
Summary 154
Key Terms 156
Study Guide 156
Further Reading 157
PART 3 LAW RELATING TO SECURITY 159
5 Guarantee 161
Learning Objectives 161
Introduction 162
What is a Guarantee? 162
Undue Infl uence 165
Guarantees by Minors 166
Guarantees by Partnerships 167
Corporate Guarantees 168
Joint and Several Guarantees 168
Liability of Guarantors 170
Guarantor's Rights as Against the Creditor 172
Guarantor's Rights as Against the Debtor 173
Rights of Co-Guarantors 174
Duties of the Creditor Bank 175
Discharge of the Guarantor 176
Summary 180
Key Terms 181
Study Guide 182
Further Reading 182
6 Mortgage of Land 183
Learning Objectives 183
Introduction 184
Land in Hong Kong 184
Mortgages 187
Priorities 192
Rights of Mortgagee/Chargee 195
Rights of Mortgagors/Chargors 201
Discharge 205
Summary 205
Key Terms 206
Study Guide 207
Further Reading 207
7 Other Security Interests 209
Learning Objectives 209
Introduction 210
Company Charge 210
Pledge 218
Hypothecation 222
Company Shares 224
Insurance Policies 229
Bankers' Lien 235
Summary 236
Key Terms 237
Study Guide 237
Further Reading 238
PART 4 INSOLVENCY 239
8 Bankruptcy 241
Learning Objectives 241
Introduction 242
Bankruptcy 242
Bankruptcy Order 244
Discharge From Bankruptcy 248
Voluntary Arrangements 248
Legal Issues for the Banker 250
Summary 254
Key Terms 256
Study Guide 256
Further Reading 256
9 Winding Up 257
Learning Objectives 257
Introduction 258
Winding Up 258
Compulsory Winding Up 259
Voluntary Winding Up 262
Petition for Winding Up 265
The Liquidator 265
Unregistered Companies 271
Assets Available for Distribution 271
Ranking of Claims 274
Antecedent Transactions 276
Legal Issues for the Banker 278
Summary 282
Key Terms 283
Study Guide 283
Further Reading 284
Index 285