The general duties of partners in banking are as follows:
- To act in good faith: Partners must act in good faith towards each other and towards the bank. This means that they must not act dishonestly or unfairly.
- To act with due care and skill: Partners must act with due care and skill in the management of the bank’s affairs. This means that they must take reasonable steps to protect the interests of the bank.
- To account to each other for all money and property belonging to the bank: Partners must account to each other for all money and property belonging to the bank. This means that they must keep accurate records of all transactions and must not misappropriate any funds.
- Not to compete with the bank: Partners must not compete with the bank. This means that they cannot start their own banking business or work for a competing bank.
- To indemnify the bank for losses: Partners must indemnify the bank for losses that are caused by their negligence or misconduct.
Here are some MCQs on the general duties of partners in banking:
- Which of the following is a duty of partners in banking?
- To act in good faith.
- To act with due care and skill.
- To account to each other for all money and property belonging to the bank.
- All of the above.
- The answer is (d). All of the above are duties of partners in banking.
- A partner in a bank fails to keep accurate records of all transactions. Is the partner liable to the bank?
- Yes, the partner is liable to the bank.
- No, the partner is not liable to the bank.
- The answer is (a). The partner is liable to the bank for the losses that are caused by the partner’s negligence.
- A partner in a bank starts their own banking business. Is the partner liable to the bank?
- Yes, the partner is liable to the bank.
- No, the partner is not liable to the bank.
- The answer is (a). The partner is liable to the bank for any losses that are caused by the partner’s competition.