How a Banker’s Lien is an Implied Pledge

Banker’s lien is an implied pledge: to discuss the statement at first let us know about banker lien. 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 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.

Such right of lien thus resembles a pledge and is usually called an implied pledge. The banker thus enjoys the privileges of pledge and can dispose of the securities after giving proper notice to the customer.