FURNISHING OF OPINION

FURNISHING OF OPINION

One of the important duties of a bank is to submit an opinion reort on its customer if asked for by fellow banker. A bank is also required to obtain such report from other banks before processing any application for credit facilities. The bank invariably obtains opinion reports before sanctioning credit facilities to a new person who is maintaining deposit/advance accounts with other banks. While obtaining guarantees from a third party, not known to bank or while sanctioning bills purchase/discount/book debts facility, etc. banks invariably call for opinion report from other agencies. The bank should consider the following aspects at the time of submission of the report.

1. An implied authority of customer is available to the bank to disclose information about the customer to the other bank.

2. The information may be sought by the other bank as the customer would be undertaking some liability direct or contingent, like request for credit facilities, or would be accepting bills, or would be a guarantor, etc. As such the report should be based on factual records at the bank. No special efforts should be made to obtain more information about the customer. Banker should make the report on the basis of available information, if possible.

3. No personal opinion of the bank official should be given. Bank should not volunteer information which is not asked for.

4. The opinion should be given in general terms only. The bank should not misguide/misrepresent the other bank. It (bank) should give true opinion of the customer as held by the bank. While indicating worth of the customer, it is customary not to give it in figures but to couch it in certain conventional terms used in the bank.

5. While furnishing opinion report, the bank should stipulate that the report is submifted without any responsibility on the part of the bank and its officers and should also indicate that all information so furnished should be treated as confidential.

6. If the bank furnishing such report, had any bad experience about the customer in the past, the report should invariably convey the signal to the fellow banker about the bad feature of the account.