banker's lien

Type of charge that gives a bank automatic claim over a borrower's property or assets that come in bank's possession in the normal course of its business. Bankers' lien is both a possessory lien and special lien: the bank has the right to seize and sell the defaulting borrower's property in its possession, after giving a reasonable notice but without going through the foreclosure procedure. Enforcement of a banker's lien, however, may depend on the type of the property and the reason it was handed over to (or came in possession of) the bank. Bills of exchange, credit cash-balances, negotiable securities (such as cleared checks and drafts), and promissory notes, may be claimed under this lien. But it is not applicable where the borrower's property was handed over to the bank for a specific purpose, such as for safe custody (as in the bank's safe deposit boxes) or for sale through a department of the bank.