Re: Legal Opinion regarding signing of BANK 1 net Customer Associate Letter of Authority by COMPANY 1, Bangladesh Liaison Office.
We refer to your letter dated 25 April 2007 on the above subject.
From your letter it appears that, according to the Customer Associate Arrangement of BANK 1, COMPANY 1 (“the Associate”) can allow COMPANY 1 Inc. (“COMPANY 1”) to have access to the Associates’ bank accounts with BANK 1. The master agreement, i.e. the Customer Agreement is signed by COMPANY 1 and the BANK 1 net Customer Associate Letter of Authority (“CALA”) is signed by the authorised signatory of the Associate. The CALA is also accompanied with a Certificate of Due Authorisation (“CDA”) signed by the Director/Corporate Secretary of the Associate, which certifies that a board resolution has been passed nominating the authorised signatories.
Now BANK 1 have received a request from the group office of BANK 1 in USA, which is dealing with COMPANY 1, to waive the requirement of a CDA.
In these circumstances, you have asked our legal opinion as to whether BANK 1 can waive the requirement of the CDA.
As a general rule, BANK 1 is under a duty not to allow access to the Associates’ account to any third party. BANK 1 may only allow such access to COMPANY 1 if the Associate authorises BANK 1 to do so. In the present case the Associate is a limited company. As such, the Associate has to nominate authorised signatory/signatories, through a board resolution and that authorised signatory/signatories shall in turn sign the CALA on behalf of the Associate, authorising COMPANY 1 to have access to the account of the Associate.
Therefore, we are of the opinion that, a board resolution of the Associate nominating authorised signatory/signatories, to sign the CALA, is necessary. And BANK 1 should ask the Associate to give BANK 1 a copy of that board resolution.
However, the CDA is not a board resolution, the CDA is a letter signed by the Director/Corporate Secretary of the Associate, certifying that a board resolution has been passed on a certain date nominating the authorised signatories. The CDA is an acknowledgement of the board resolution. Therefore, we are of the opinion that there is no legal requirement of the CDA and the CDA may be waived.
If you have any further query, please do not hesitate to contact the undersigned.
For: “The Lawyers & Jurists”