Letter of setoff

Letter of setoff,

Definition of Letter of setoff:

  1. Written agreement through which a bank obtains a borrowers consent to seize his or her deposit(s) for non-payment of a loan or other obligations, or to offset credit balance of one account with the debit balance of another. Banks require this letter where they believe their normal right to setoff, provided under law, may be challenged. Also called lien letter.

Meaning of Letter of setoff & Letter of setoff Definition