Banker and Customer Ppt

7/23/2019 Banker and Customer Ppt

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BANKER-CUSTOMER

RELATIONSHIP & RIGHTSPresented By:

Sasmita Behera

Pooja SamantarayHamid Raza Farooqi

Ankan Pattanayak

Farha NaazHemant Kumar Sharma


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BANKER

DEFINITION

A banker is a dealer in capital, or more properly, a dealer

in money. He is an intermediate party between theborrower and the lender. He borrows from one partyand lends to another.

J.W.Gilbert Principles & Practice of Banking


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CUSTOMER

DEFINITION

Customer is a person who has some sort of account,either deposit or current account or some similar

relation

Any person or corporate body is a customer when it isopening a current or deposit account, or when

negotiates on advance on his account, or a loanaccount.


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QUALIFICATIONS OF A CUSTOMER

He should not be a minor & must have attained the

age of majority, because a minor is not competent to

contract. However exception has been allowed.

He should be a person of sound mind. If not so he is

incompetent to contract.

He shall not have been debarred from entering into a

contract under any law, like un discharged bankrupt,

proclaimed offender and alien enemy.


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RIGHTS OF A CUSTOMER

To draw cheques against his credit balance, or anoverdraft if there are accommodations made with the

banker.

To receive a pass book or a statement containing acopy of his account with the banker.

To sue the bank for the cost, loss & damages when hischeque is wrongfully dishonored.


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RIGHTS OF A CUSTOMER

To sue when the banker has not maintained thesecrecy of hid account

To claim for & receive the profit/return on hiddeposits as promised by the bank


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GENERAL RELATIONSHIP

The relationship between banker & customer is in

fact that of a debtor & creditor.

When the banker receives money from customers he

does not hold it in a fiduciary capacity, but it was

generally believed that by accepting deposits from

the depositor the banker assumed the responsibilities

of his agent.


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CREDITOR-DEBTOR

Relationship between the customer having a deposit

account and the banker.

Depositor is the lender and the banker is the borrower.

Depositor is the creditor and the banker is the debtor.

The money handed over to the bank is a debt.


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PRINCIPAL-AGENT:

The special relationship between the customer and thebanker is that of principal and agent.

The customer (principal) deposits checks, drafts,dividends for collection with the bank.

He also gives written instructions to the bank to

purchase securities, pay insurance premium,installments of loans etc on his behalf. When the bank

performs such agency services, he becomes an agentof his customer.


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OTHER RELATIONSHIPS

1-BAILOR & BAILEE

A bailment is delivery of goods by one person to

another for some purpose, upon a contract.

When the banker provides safe custody facilities to

his customers for their valuables, the relationship

becomes that of Bailor & Bailee.


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OTHER RELATIONSHIPS

2-PRINCIPAL & AGENT

When a banker performs agency services he becomes

agent of his customer. These services include collection

of cheques, other negotiable instruments, payment ofpremium, subscription & fee to clubs & associations

etc.


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SPECIAL FEATURES OF

RELATIONSHIP

a. Obligation to honour cheques

It is a statutory obligation to honour cheques drawn on

him by his customer as long as his balance issufficient, provided that the cheque is not stale or

post dated and appears to be valid on the face of itand that there is no prohibiting order of any court

against the account of the customer.


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SPECIAL FEATURES OF

RELATIONSHIP

b. Right of Lien

Lien is the right to retain the property belonging

to another until the debt due from the later hasbeen paid. A bankers general lien is of peculiartype, for it extends to all the securities placedwith him by his customer.


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SPECIAL FEATURES OF

RELATIONSHIP

c. Right to charge for their services

Bankers have the right to charge for the servicesthey provide to their customers.


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FIDUCIARY RELATIONSHIP

Every relation of trust and confidence is a fiduciary

relation. A banker who receives a customers money

is under a duty not to part with it which is

inconsistent with the customers fiduciary characterand duty. It was held that banks old money for a

specific purpose of sending it somebody the money is

impressed with trust.


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DUTIESOF A CUSTOMER

Customer must present the cheques for payment &collection within the business hours of his banker.

The customer should see that the cheque & otherinstruments are presented for payment within areasonable time from the date of their issue.

He should keep cheque book at a safe place. Failing todo so he is to be held responsible for leaving hischeques unprotected.


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DUTIES OF A CUSTOMER

He should draw the cheques very carefully & in

such a way that there is no room left for any

fraudulent alterations & additions.


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THE BANKERS DUTY OF SECRECY

The relationship between banker & his customer is

obviously confidential, therefore, a banker must

maintain secrecy about the state of his customersaccount.


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THE BANKERS DUTY OF SECRECY

The obligation of secrecy, may not be considered

essential on the following occasions:

1. Under Compulsion of Law

2. Duty to Public to Disclose

3. In the Interest of the Bank

4. Express or Implied Consent of Customer

5. Common Courtesy to other Bankers


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TERMINATION OF RELATIONSHIP

1. Notice by a customer

i. Due to change in address

ii. A customer may not be satisfied with the services

of his bank.iii.Account may be closed due to death of thecustomer or having zero balance in the account.


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2. Notice by Banker

i.

Insufficient funds.ii. Non maintenance of minimum balance.

iii. Asking banking facilities after banking hours.


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3. OTHER REASONS:

1. Obstinacy of the customer

2. Death of the customer

3. Customers insanity

4. Customers insolvency

5. Order of court6. Assignment of account

7. Unsatisfactory operation


23/23ANY QUESTIONS

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Banker and Customer Ppt