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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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TERMINATION OF RELATIONSHIP
2. Notice by Banker
i.
Insufficient funds.ii. Non maintenance of minimum balance.
iii. Asking banking facilities after banking hours.
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TERMINATION OF RELATIONSHIP
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
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23/23ANY QUESTIONS