A banker's lien is a legal right arise in many common law jurisdictions of a bank to exercise a lien over any property in the custody of the bank as security. Lien is of two types:
Particular lien
General lien
Particular lien confers to retain the goods in connection with which a particular debt arose i.e. A particular lien applies to one transaction or certain transaction only. e.g. a tailor has the right to certain the clothes made by him for his customer until his tailoring charges are paid by customer.
Scope
The precise effect of a banker's lien varies according to the laws of a particular jurisdiction. Under English common law it applies to all property coming into the possession of the bank in the usual course of banking business,[1] subject to the important exception that it does not apply to property which is deposited with the bank for safe custody.[2]
Whilst most common law liens normally only give the lienee a passive right to retain the property, unusually, the banker's lien permits the bank to sell the relevant property.[3]
The lien does not generally extend to intangible rights, including credit balances on accounts. However those credit balances may be subject to the banker's right to combine accounts.[4]
The banker's lien may be modified or abrogated by agreement.[5]
