The mandate and power of attorney are the rights cast upon a third person to act on behalf of the principal person/s. The rights of mandate and power of attorney holders are very similar in the operation of bank accounts but they are issued for different reasons and purposes.
A mandate is a simple letter of authority, signed by a constituent authorising the bank to permit a certain named person (agent) to operate the account on his/her behalf. A mandate to operate an account does not extend to overdrawing the account unless the mandate letter specifically provides the authority to overdraw the account. In the case of Joint accounts, all the depositors to the account must sign the mandate letter. In the case of partnership firms, all the firm’s partners must sign the mandate letter. One of the joint account holders or any firm partner as the case may be can revoke this authority by writing to the bank. In the case of H.U.F, the mandate must be signed by the Karta and all the major co-parceners. In case the mandate is to be issued in favour of a third party an Indemnity has to be executed by the Karta and major co-parceners of the H.U.F.
Conclusion:
The customer may authorise the bank to operate his account by a certain named person by way of mandate and power of attorney. Similarly, the Banks are conferred with the right to retention of goods or security (such as cheques, bills of exchange, deposits, etc.) By way of general lien until some claim attaching to it, is satisfied or discharged. The lien extends to all such documents under which money will or may be payable to the customer. Further, the banker has the right of appropriation and right of set-off when the money owed to the bank is a certain sum, which should be due at the time of set-off and there shall not be an agreement, express or implied to the contrary.
To know them in detail read the following articles.
