Banker’s Lien: Definition, Types, Example (Explained)

Banker's Lien: Definition, Types, ExampleBanker’s lien is an implied pledge.

Why?

Lien is one of the important rights enjoyed by a banker.

Lien means the right of the creditor to retain the goods and securities owned by the debtors until the debt due from him is repaid.

It confers upon the creditor the right to retain the security of the debtor and not the right to sell it.

In case of a pledge, the creditor enjoys the right of sale.

A banker right of lien is more than “General lien”. It confers upon him the power to sell the goods and securities in case of default by the customer.

Related: General Lien and Particular Lien (Definition, Types, Example)

Such right of lien thus resembles a pledge and is usually called an implied pledge.

The banker thus enjoys the privileges of the pledge and can dispose of the securities after giving proper notice to the customer.

Related: When Banks Required to Disclose Customers’ Information

Types of Liens

There are several specific types of liens, such as; consensual lien, Tax liens, Contractor’s or mechanic’s liens and more.

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