LW 231 COURSE REVIEW(DRAFT ONE)

COURSE REVIEW.
ADB-II
LAW RELATING TO BANKING
1. BILLS OF EXACHANGE AND BANKING
1.1. Introduction
1.2. Banking system in Tanzania
1.3. The development of the monetary systems and the financial sector reforms 1998 to date.
1.4. Financial institutions in Tanzania and their position in the Banking system
1.5. Applicable Law
• The Bank of Tanzania Act, 1995
• The Banking and Financial Institutions Act, 2006
• The Capital Markets and Securities Act
• The Dar-es-salaam Stock Exchanges Act,
• The Foreign Exchanges Act.
• The Bills of Exchange Act.
• Basel II Accord.

2. BILLS OF EXCHANGE AND THE PROTECTION OF THE BANKER.SECTION 73-85 BEA
2.1. Definition of the Bills of Exchange
2.2. Types of the bills of exchange.
2.3. Definition of a Cheque
2.4. Crossed cheque
2.5. Presentment of a cheque for payment
2.6. Protection of the paying bank and the drawer when the cheque is crossed.
2.7. Protection of the collecting bank on unendorsed cheque
2.8. Effects of crossing on the holder
2.9. Rights of the banker collecting unendorsed cheque.

3. ELECTRONIC PAYMENT MECHANISMS IN BANKING INDUSTRY.
3.1. Definition of a payment mechanism
3.1.1. Definition of money
3.1.2. Definition of payment
3.1.3. Definition of electronic payment mechanism
3.2. Forms of electronic payment mechanism and their legal consequences.
3.2.1. Electronic Funds Transfer (EFT)
3.2.2. Automated Teller Machines (ATM)
3.2.3. Credit /debit transfers
3.2.4. Payment cards or Electronic Funds Transfer at the Point of Sale (EFTPOS)
• Credit cards
• Cheque cards
• Debit cards
• ATM cards
• Multifunctional cards
3.3. Duties of the banks involved in electronic funds transfer.
3.3.1. Originating bank
3.3.2. Intermediary bank
3.3.3. Agency/beneficiary bank.
3.4. Completion of payment
i.e. when is payment complete
does it discharge the payee from liability?


4. BANKS AND THEIR CUSTOMERS.
4.1. What is a bank
4.2. Who is a customer
4.3. Role of the bank
4.4. The nature of the banker- customer relationship
• The bank as an Agent
• The bank as a creditor/debtor
• The bank as a trustee etc.
4.5. Terms of the bank-customer contract and when is it made.
4.6. The banker’s duties.
4.6.1. Duty to honour customer’s mandate
4.6.2. Duty to obey customer’s countermand
4.6.3. Fiduciary duties
4.6.4. Duty of care
4.6.5. Confidentiality duty.
4.7. The customer’s duty of care
4.8. Banks and fraud: “liability as a constructive trustee”
4.9. Termination of a banker-customer relationship
4.9.1. Death- administration of estate
4.9.2. Bankruptcy and receivership.

5. SECURITIES FOR BANKER’S ADVANCES.
5.1. Meaning of security
5.2. The nature and purposes of security
5.3. Types of securities acceptable in banking business.
5.3.1. Life Policies
5.3.2. Mortgages
5.3.3. Pledges, debentures and shares
5.3.4. Guarantees
5.4. Banker’s Lien
5.4.1. What is a lien
5.4.2. How does a lien arise
5.4.3. General lien
5.4.4. Enforcement and termination of lien
5.5. Bank Guarantees
5.5.1. Legal nature of guarantees
5.5.2. Distinction between indemnity and a guarantee
5.5.3. The contract of guarantee
5.5.4. Relationship between the creditor and surety
5.5.5. The relationship between the principal and debtor

6. INSOLVENCY/BANKRUPTCY.
6.1. Definition and elements of bankruptcy
6.2. Persons who may be declared bankrupt
6.3. Bankruptcy process adjudged, undischarged and discharged bankruptcy.
6.4. Position of the banker in the bankruptcy process.

7. BANK SUPERVISION AND REGULATION.
7.1. What is bank supervision
7.2. What is bank regulation
7.3. Who is responsible for prudential regulation and supervision in Tanzania
7.4. Threshold conditions for bank supervision and regulation in Tanzania
7.5. Basel II requirements.






THE END.

Prepared by: Mr.Augustus Fungo
Department of Insurance and Social Security Administration,
Institute of Finance Management.
Dar-es-salaam.

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