Combination of accounts

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The banker’s right to combine accounts arises where a customer has multiple bank accounts, usually where some are in debit and some in credit. This stands to reason, obviously — unless there are multiple accounts, all overdrawn, but only some of them benefit from a security interest — though see also the rules about bailment. It is sometimes called a Banker’s set-off but, in 1972’s (still leading) case National Westminster Bank Ltd v Halesowen, Lord Buckley noted it isn’t a set off right so much as a function of accounting:

“Nor is it a set-off situation, which postulates mutual but independent obligations between the two parties. It is an accounting situation, in which the existence and amount of one party’s liability to the other can only be ascertained by discovering the ultimate balance of their mutual dealing.”

See also

• Bailment

• Set-off