Section 45ZB of the Banking Regulation Act, 1949

Solution

Section 45ZB provides that no notice of any third party’s claim in respect of a deposit held by a banking company shall be receivable by the bank, nor shall the bank be bound by any such notice even if expressly given. The proviso, however, states that where any decree, order, certificate or other authority from a court of competent jurisdiction relating to such deposit is produced before the banking company, the banking company shall take due note of such decree, order, certificate or other authority. This exception recognises judicial process as the legitimate mechanism for third parties to assert rights over deposits. Absent a court authority, the bank is protected from conflicting claims and may deal exclusively with the account holder, thereby ensuring certainty and smooth operation of the deposit contract.