a customer has deposit jewels worth 100000 for safe custody later he becomes a debtor to the bank
will the bank take his jewels for his debt
Hi,
When taking a loan from the bank, a collateral must have been given for security purposes. Only if the debtor has defaulted on the payment of the loan can the collateral be used to settle the debt. Incase there is no security provided to the bank for the loan, recovery will be through the process of law.
However the bankers also have certain rights.
Banker's lien is the right of retaining assets delivered to the bank’s possession unless the borrower to whom they belonged has agreed that this right shall be excluded, such as in the case of valuables kept in the bank for safe custody. A bank may exercise the option to set off the dues against your deposits. So to answer your question, yes, the bank may use the deposit to recover its loan.
I hope this answers your question.
Have a good day!
