Question

1.A bank’s right of set-off can be restricted by an express agreement with the customer.

2.Even if there is an agreement prohibiting set-off, the bank can still exercise the right at its discretion.

Which of the statements given above is/are correct?

• A. 1 only
• B. 2 only
• C. Both 1 and 2
• D. Neither 1 nor 2

Answer 1

Answer:

A. 1 only

Statement 1 is correct. Statement 2 is incorrect because an agreement against set-off is binding on the bank.