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The Banker’s right of set-off refers to the right of a bank to combine two or more of a customer’s accounts held with that bank, where one account has a credit balance and the other has a debit balance, in order to give a net position. There is a debate as to whether the right is a standalone legal principle, or a reflection of the accounting reality of the net Liabilities between the customer and their bank. Notwithstanding this debate, the right is subject to a number of well-established limitations.

First, although the right is applicable to accounts held at different branches of the same bank, the customer must hold both accounts in the same capacity. Thus, a bank cannot set-off a debt owed by the customer personally against a credit balance