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 for the indebtedness of the customer to the bank.
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, subject to the important exception that it does not apply to property which is deposited with the bank for safe custody.
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 the sell the relevant property.
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.
The banker’s lien may be modified or abrogated by agreement.
- ^ Jump up to:ab P. Ellinger; E. Lomnicka; C. Hare (2011). Ellinger’s Modern Banking Law (5th ed.). Oxford University Press. p. 864. ISBN 978-019-923209-3.
- ^Brandao v Barnett (1846) 12 Cl 7 F 787
- ^Leese v Martin (1873) LR 17 Eq 224 at 235. The bank holds such property as bailee, and may be entitled to exercise a separate lien as such.
- ^Rosenberg v International Banking Corporation (1923) 14 Ll LR 344 at 347
- ^National Westminster Bank Ltd v Halesowen Presswork & Assemblies Ltd  AC 785