Current account in a commercial bank
P.P.Upadya
(Querist) 09 December 2011
This query is : Resolved
I am a small time businessman running a consultancy firm and have opened a Current Account in a Commercial Bank (Vijaya Bank) My understanding is that the overdraft facility comes automatically with the current account.But the Bank denies it and says that I should request for that and it is the descretion of the manager to allow or not! is it so? Pl.clarify.
I issued a cheque on my current account in favour of my other account (S B) in the same branch of the bank. Simultaneously I had deposited more than the required amount by cheque to the current account. But telling that there was no balance in current account they held up the cheque drawn in favour of my S B account.(There was no information to me) As a result, the cheque issued by me after 12 days on my SB account got dishonoured. Now the Bank is refusing to own up the mistake. They are telling that now they are transfering the amount from my current account to SB account and I can issue a fresh cheque in lieu of the one dishonoured.
Please answer my qery.
Thanks
P.P.Upadya
ajay sethi
(Expert) 09 December 2011
please read the terms and conditions mentioned in your account opening form . does it mention over draft facility ocmes automatically ?
if it does not mention then you have to specifically ask for over draft facility
if you are disatisfied with servcies of the bank close your account .
Guest
(Expert) 09 December 2011
Dear Upadhyay,
Overdraft facility does not come automatically by opening of a current account. The manager of bank decides on specific request based on the credibility of the firm based on the frequency of credit transactions in the account.
About deposit of cheques more than the cheques issued by you, the credit of cheques deposited is given on clearance by the concerned banks on which the cheques are drawn. However, if the account holder specifically requests the bank to give credit before clearnce that also depends upon the discretion of Bank Manager. Normally bank managers give credit on request before clearance with nominal charge of interest etc. for the days between the date of credit and the date of clearance of cheques.
Banks are commercial entities and work only to earn profit for its stake holders. So, they are not obliged by any law to provide extra facility automatically than the law provides in general.
Rajeev Kumar
(Expert) 09 December 2011
Yes i too agree with experts
Raj Kumar Makkad
(Expert) 09 December 2011
I endorse the views of respected Dhingra g.
prabhakar singh
(Expert) 09 December 2011
Any over draft facility is discretion of manager of the branch to the extent he is empowered from his superior authority,which he extends only viewing the risk involved in advancing unsecured overdraft,so credibility
is the main factor in the overdraft's grant
depending upon goodwill made with the Bank Branch.
Shonee Kapoor
(Expert) 09 December 2011
I also second what Ld. Mr. Dhingra has stated.
Regards,
Shonee Kapoor
harassed.by.498a@gmail.com
vasant kulkarni
(Expert) 10 December 2011
IF BOTH THE ACCOUNTS STAND IN YOUR NAME,THEN THE BANK CAN EXERCISE THE GENERAL LIEN AND CREDIT THE AMOUNT TO YOUR C/A INSTED OF S/B AND RETURN THE CH.
RAJU O.F.,
(Expert) 10 December 2011
Presume that you had opened current a/c in bank and later issued a cheque in favour of your SB a/c in the same branch and then issued a cheque from SB a/c to a third party which was bounced due to insufficiency of fund in SB a/c. If it was so, if at the time of issue of cheque in current a/c there was no sufficent balance,bank is justified in not transferring the cheque amount to SB a/c. Bank is also justified, if the SB a/c was not having sufficient balance when the cheque was presented and thus cheque is returned unpaid. It is purely at the discretion of the bank to allow unsecured overdraft in the current a/c.
