Relationship Between Banker and Customer : Let us tell you what is the relationship between a banker and a customer. Usually the legal relationship between the customer and the bank is established on the contract and this relationship is known as debtor-creditor. You must have noticed that people who are customers of a bank, when a bank accepts money from a customer, the process is known as borrower, which is an inherent process. The money can be used by the bank as owned or as it pleases. In this regard, the customer has every right to demand a refund.
Bank
It is an institution that receives money from the public and gives loans and advances to the needy people.
Customer
A customer is a person who has a bank account in his name and the relationship he maintains with the bankers is of banking nature.
- A person doing banking business is a banker.
The banker-customer relationship is banking in nature and begins with the idea of opening an account by the customer.
Relationship Between Banker and Customer : Such a relationship can be either
1) General
2) special
General Relation –
1) Debtor and Creditor Relationship
2) Relationship of trustee and beneficiary
3) Baylor and Bailey’s relationship
Debtor and Creditor Relationship
When a customer opens an account with a bank and if the account has a credit balance, the relationship is debtor and creditor, it is because the banker owes the customer money. In case of loan and advance account the banker is the borrower and the customer is the borrower as the customer is owed money to the banker.
Relationship of Trustee and Beneficiary
When a banker accepts goods such as securities or documents for safe custody or in need of a customer’s money, the relationship between the banker and the customer is that of trustee and beneficiary. The bank is reliable and the customer is the beneficiary.
Baylor and Bailey’s Relationship
The relationship between the banker and the customer can be that of surety and surety.
a) A bailment is a contract by one party to deliver goods to the other party for a specific period and return them when the purpose is over.
b) The surety is the party who distributes the property to the other.
c) The surety is the party to whom the property is distributed.
So when a customer as a guarantor gives a sealed box to protect the customer, the customer becomes the guarantor and the bank becomes the guarantor
Special Relation –
1) Obligation to honor the check
2) Banker’s obligation to maintain confidentiality
3) Banker’s obligation to maintain proper records
Obligation to Honor the Check | Relationship Between Banker and Customer Services
The bank has a statutory obligation to honor checks up to the amount deposited in the account of its customer. If a bank wrongly refuses to honor its customer’s check, the bank will be liable to indemnify the customer.
This obligation is subject to certain conditions, namely:
a) The bank should have sufficient funds for the customer.
b) The amount should be appropriately applied for payment of the customer’s check.
c) The check should be properly drawn and complete in all respects.
d) The check must be presented for payment within a reasonable time of 90 days.
e) There should be no legal bar to stop the payment of such check.
Banker’s Obligation to Maintain Confidentiality
The banker should not disclose any extraneous details about the customer’s account as such disclosure may adversely affect the credit and business of the customer.
In this case, the following two conditions can be made:
a) when the following requires such disclosure, and
b) When dealings between banks give such disclosure
Banker’s Obligation to Maintain Proper Records
It is the responsibility of the banker to maintain accurate records of all the transactions of the customer made with the bank.
