Bank 1 has entered into a CP with you regarding a specific debt.
As long as you maintain your end of bargain, they can not and will not exercise their Right to Setoff.
Under common law that ability clearly exists and is an option should you not make your payments as arranged.
The reason I mention different branches is many confuse that for different bank which it is not.
You have a legal CP in place and they can not alter those terms at this point.....unless you breach that agreement by not paying on time.
So simple answer is no they can not take your deposit unless you screw up your CP terms with them.

so a little confused here. I understand that bank 1 cannot make bank 2 send bank 1 the money but by your answer it appears that bank 1 could keep the money >if< i went to bank 1 to open a new account (assuming they would let me) and then deposited this bank draft.

just wondering why you would ask if bank 1 and 2 are different banks and not different branches of same bank. there is where my confusion is. It looks like you are saying that bank 1 can keep the money if i went to open an acct or cash out the bank draft at a bank 1 branch.

i also have a question about bank drafts but will post in an appropriate forum section.

then answer is no.

totally separate banks

bank 1 - td canada trust

bank 2 - scotiabank

If there is CP in place and it is being honored and paid on time the bank will not exercise its right to set off.

And no one bank cannot force another to transfer funds.

This is assuming bank 1 and 2 are different banks and not just different branches of same bank.

so i am 2years in on a consumer proposal. (CP) Just curious about something

lets say you had an acct at bank 1 and changed to bank 2 at the time of the CP. You owed bank1 on a visa. Could you open and acct at bank 1 again during proposal and could bank 1 take any money in the account as right to offset? or is money not touchable due to the CP?

also if someone got a large bank draft on bank 1 sent to them could bank 1 make bank 2 give bank 1 the money?