Banking · Ancillary Services
Statement 1: Under the safe custody ancillary service, the bank accepts specific articles like sealed packets or wills for safe keeping and the relationship established is that of a bailor and a bailee. The bank has actual possession and issues a safe custody receipt. Statement 2: When a bank undertakes government business, it acts as an agent for the RBI or governments for collecting taxes and making payments. It receives an agency commission and faces penalties for delays. Statement 3: A Letter of Comfort is an ancillary service providing a non-binding statement to a third party regarding a customer's financial capability, without creating a direct legal financial obligation to pay. Based on these statements, which of the following assessments is correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Statement 1 and Statement 3 are correct while Statement 2 is incorrect because banks do not receive any commission for government business.
- 2Only Statement 2 is correct while Statement 1 and Statement 3 contain fundamental legal errors.
- 3All three statements are correct as they accurately describe the legal nature and operational mechanics of these services.✓
- 4Statement 1 and Statement 2 are correct while Statement 3 is incorrect because a Letter of Comfort is always legally binding.
Correct answer
All three statements are correct as they accurately describe the legal nature and operational mechanics of these services.
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