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Associate
Banking Diploma — Core Subject
Law Relating to Banking |
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| Objective
of the course The main objective of the course is to ensure that you are able to make sound business decisions based on your understanding of the legal principles relating to: - special types of customers such as partnerships and limited companies - special types of customers such as partnerships and limited companies; - the operation of bank accounts - the position of a bank as an agent of its customers - cheques and other means of payments - bankers securities - forgery and fraud in banking business. |
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A. Banker/Customer Relationship |
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| (i) | Definitions: - The meaning of Banker/Customer - The significance of definitions - Types of customers Individual customer Minors Married women Customers in profession - Lawyers, Accountants, etc. Partners Joint Account Holder Executive and Administrators Trustees Companies Receivers and debenture holders Liquidators Clubs and societies. |
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| (ii) |
Nature of their relationship - General - Special |
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| (iii) | Implied terms of the contract between banker and customer: | |
| (a) | Customers
obligations - Writing cheques carefully - Informing the bank of forgeries committed on the account |
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| (b) |
Bankers Obligations - Bankers duty to pay on demand - Bankers duty of secrecy and exceptions thereto - Bankers duties in respect of pass books and statement of accounts. |
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| (c) | Banker
Rights - Set off and the rule in Clayton case - Right to charge commission - Bankers right to lien. |
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| (iv) |
Banks and Agency - General principles of Agency - Meaning - Types - Creation of Agency - Obligations and rights of the parties under the Agency contract - Consequence of the contract made by the Agent - The doctrine of undisclosed principal - Termination of their principal/agent relationship - (Relevancy of Agency to the banking business should be discussed each stage teaching whenever it becomes relevant). |
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| B. BANKERS SECURITY | ||
| 1. | -
Land as a security - Introduction to Tanzania Land Tenure System - Creation of securities-equitable, legal, mortgage. |
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| 2. | Guarantees | |
| 3. | Company Debentures | |
| 4. | Life Assurance Policies | |
| 5. | Other less important securities (pledge, shares and stock). | |
| C. CHEQUES PAYMENTS, ORDERS AND PAYMENT SYSTEMS | ||
| 1. | Cheques - Essentials of a cheque - Crossing on cheque - Issuing a cheque - Negotiation of cheque - Holders of a cheque - Liability of parties to a cheque - Collecting bank and his defences to claims arising from cheques. |
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| 2. | Bankers Draft and Promissory note. | |
| 3. | Electronic banking (subject to discussion with bankers) | |
| D. FRAUD AND FORGERY | ||
| Meaning of fraud/forgery | ||
| Types of forgery/fraud | ||
| Readings and Local statues | ||
| 1.
TIOB (2003) Law Relating to Banking, Colour Print, DSM 2. Law of Contract Ordinance 422 3. Bill of Exchange Ordinance 4. Company Ordinance Cap 212 5. Cheques Act, 1969 6. Penal Code-Cap. 16 7. Economic and Organised Crimes Act, 1984 8. Bank of Tanzania Act, 1995 9. Banking and Financial Institution Act, 1991 10. Land Ordinance - Cap. 113 11. Land Registration Ordinance 334 12. Land law (Conveyancing and Transfer of Property Ordinance) Cap. 114 13. Registration of Documents Ordinance Cap. 117 14. Land Regulations 1948 15. Bankruptcy Ordinance Cap 25 16. Various local cases (to be researched). |
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