Law · Banking Documentation and Precautions

Evaluate the following statements regarding the precautions a bank employee must take during document collection: Statement 1: A 'Letter of Continuity' obtained along with the DPN ensures the documents remain valid for the fluctuating balance in a Cash Credit or Overdraft account. Statement 2: Without a Letter of Continuity, the 'Rule in Clayton's Case' might apply, where every deposit is deemed to pay off the oldest debt. Statement 3: Stamping of documents must be done before or at the time of execution; stamping after execution makes it 'Duly Stamped' only if a penalty is paid. Statement 4: A 'Guarantee Agreement' is a tripartite contract where the surety's liability is co-extensive with that of the principal debtor. Statement 5: For a 'Minor' to be a party to a contract, the documentation must be executed by a court-appointed guardian for clear legal necessity. Statement 6: A blind or illiterate person can execute documents, provided they are read out and explained to them, and the mark or thumb impression is properly witnessed. Statement 7: Banks maintain a 'Document Custody Register' and perform 'Annual Document Audits' to ensure vital loan agreements are protected. Which of the following combinations is correct?