Course Description:
This course provides an in-depth introduction to the legal framework governing the banking industry, with a focus on the laws, regulations, and practices that shape banking operations in both domestic and international contexts. Students will examine the roles and responsibilities of financial institutions, the legal relationship between banks and their customers, and the legal treatment of instruments and securities commonly used in banking. The course combines theoretical principles with practical applications, equipping students with the foundational legal knowledge necessary for effective and compliant banking operations.

Course Objectives:
Upon successful completion of this course, students will be able to:
•    Understand the structure, types, and functions of banks and financial institutions.
•    Examine key legislation and legal principles affecting banking activities.
•    Analyze the legal relationship between bankers and customers, including confidentiality and liability.
•    Interpret the legal implications of negotiable instruments and banking transactions.
•    Evaluate the legal basis for securities, credit arrangements, and financing mechanisms.
•    Understand the legal duties and responsibilities of bank officials and employees.
•    Explore the regulatory and ethical considerations in modern banking law.

Course Learning Outcomes:
By the end of the course, students will be able to:
•    Distinguish among various types of banks and their services within a legal context.
•    Apply statutory and common law principles to banking operations and customer relationships.
•    Interpret legal issues related to bank secrecy, negotiable instruments, and accounts.
•    Identify and explain the different forms of securities used for bank advances.
•    Evaluate legal procedures for terminating banking relationships, including liquidation.
•    Analyze the rights and liabilities of banking institutions, officers, and staff.
•    Apply legal reasoning to real-world banking scenarios using relevant laws and case studies.

Recommended Course Materials:
•    The Law and Practice of Banking by G.A. Penn, A.M. Shea, and A.R. Arora
•    Legislation: Banks and Trust Companies Regulation Act (Bahamas), Financial Transactions Reporting Act, Central Bank Act
•    Case law handouts and legal updates from regional jurisdictions
•    Access to local financial regulatory websites and legal databases

 

 

Course Content:
1.    Types of Banks and Their Services
o    Commercial banks, savings banks, development and government institutions
o    Domestic and international banking services
 

2.    Statutes Affecting Banks
o    Legal structures: sole proprietorship, partnerships, corporations
o    Relevance to bank formation and governance
 

3.    Banker-Customer Relationship
o    Definitions, obligations, and legal characteristics
o    Confidentiality and its exceptions
o    Debtor-creditor relationship
 

4.    Bank Secrecy
o    Legal provisions on bank secrecy
o    The nature and limits of confidentiality in banking
 

5.    Negotiable Instruments
o    Cheques, bills of exchange, promissory notes, bearer instruments
o    Endorsements, collections, and liabilities

6.    The Bank Account
o    Types of accounts: current, savings, fixed deposit, special accounts
o    Legal responsibilities and documentation

7.    Bank Financing
o    Loans, overdrafts, bill discounting, export and documentary credits
o    Legal treatment of instruments like bills of lading
 

8.    Other Bank Services
o    Custody, investment advice, references, and travel services
o    Bank giro system (UK example)
 

9.    Securities for Advances
o    Types of collateral: mortgages, charges, pledges, stocks, guarantees
o    Legal procedures for perfection and enforcement
 

10.    Termination of the Banker-Customer Relationship
o    Grounds for termination
o    Liquidation, insolvency, and related procedures
 

11.    Legal Aspects of Bank Organization
o    Legal status of headquarters, branches, and correspondents
 

12.    Rights and Liabilities of Bank Officials
o    Responsibilities under partnerships and corporate law
o    Liabilities for negligence, fraud, or misconduct

 

Course Assessment & Evaluation:
•    Class Participation and Attendance: 10%
•    Midterm Examination: 30%
•    Final Examination/Project: 60%