Colombian Commercial Code - Decree 410 of 1971 - Book IV - Of Contracts and Corporate Obligations - Title XVII - Of the Bank Agreements - Chapter V - Opening credits and discounts - From: Section 1400 to: 1407 Art

CHAPTER V

Opening credits and discounts

Section 1400 .- Means opening a credit agreement under which a banking institution agrees to make available to a person of money within the agreed limit and for a fixed or indeterminate. If you do not express the duration of the contract, it shall be held for an indefinite term.

Section 1401 .- The availability of the preceding article may be simple or rotating. In the first case, uses the bank's obligation extinguished until concurrence of the amount thereof. In the second, refunds verified by the customer will again be used by it during the contract period.

Section 1402 .- The credit facility agreement be made in writing which shall state the amount of credit open.

Omitting the nature of availability, means that it is simple. If not otherwise stipulated, the amounts used for bank earn interest at less than one year term, during the time of use.

Section 1403 .- The credit of the previous articles that can be handled through the customer's checking account.

Section 1404 .- The temporary overdrafts to the bank authorize, shall be governed by Article 1388 and about them not be required in writing.

Section 1405 .- When the person has opened a credit account be declared (bankruptcy) *, the bank shall not make deliveries because of the credit. But if this were handled through the bank account, the bank will debit the account to the extent of the unused amounts in order to establish the true balance.

* Open compulsory liquidation proceedings. 

Section 1406 .- Unless otherwise agreed, the credit institution can not terminate the contract before the expiry of the stipulated term.

If the opening of credit is for an indefinite period each party may terminate the contract by the agreed notice or, failing that, a fortnight.

Section 1407 .- When credit is granted by discounting securities and they are not paid when due, the bank may, at its option, to pursue the payment of such instruments or demand restitution of the sums given by them. If you have given in the form of overdraft, the bank shall not pay for new checks and balances to determine the customer's expense.