Question

Kwadwo Balkana is a big time business tycoon who is into spare parts business. He has ten shops in Abosey- Okai, five shops in Kokompe and ten shops in Kumasi Magazine. His total daily sales from all his shops in Ghana is GH50,000. Kwadwo Balkana for so many years, was keeping his money in his home until he suffered an armed robbery attack and a friend advised him to open a bank account for his business. He heeded to the advice and went to open an account with Standard Chartered Bank, Osu branch. The first day he went to the bank for the account opening, he deposited GH200,000 into his account. Two months after being a customer of Stand Chart, a friend of his’ needed money for some business transactions. He told the friend, who wasn’t a customer of Stand Chart, to go to Stand Chart Osu branch in his name for a loan. When the friend arrived at the bank, he was informed that he needed to be a customer by account opening before they could advance a loan to him. The friend told Kwadwo Balkana and he went with him to the bank. Kwadwo Balkana told the bank upon arrival that they should give a loan to his friend. The bank explained why they could not advance a loan to his friend but Kwadwo still insisted that they should give part of the money he has deposited to his friend as a loan. The bank refused and Kwadwo became furious and threatened to close his account with the bank. The bank did not want to lose him as a client so the branch manager explained to him that once he deposits his money with the bank, the bank now becomes responsible for the money. They decide what to do with the money and not the customer. Kwadwo told the manager that once he has given his money to them, he has the right to dictate to them what to do with his money. Is Kwadwo Balkana right on this?

Required

Advise Kwadwo Balkana on the legal position of this matter.

Answer 1

Kwadwo Balkana is not legally right by saying that once he has given his money to the bank, he has the right to dictate to them what to do with his money. Yes ofcourse, he can use his money or expend it as and when required but he cannot ask the bank to give loan to his friend or anyone from the money he has deposited. He can withdraw it from the bank and then he can lend the money to his friend or anyone but he cannot involve the bank to give the loan to someone from his money. The bank by saying that "once he deposits his money with the bank, the bank now becomes responsible for the money" is true in the sense that now bank will be accountable for the money he has deposited and so the bank has to follow the banking rules and regulations to offer a loan.

So to conclude, we can say that Kwadwo Balkana can legally withdraw his money and give loan but he cannot ask the bank to give loan to his friend out of his money deposited in the bank.