Relationship between customer & banker

BANKER AND CUSTOMER:-

DEFINITION OF BANKER:-

Banker is who take deposit account, take current account, issue and pay cheques, collect cheques crossed and uncrossed for his customers.

Banker is an institution which borrows money by accepting deposits from the public for the purpose of lending to those who are in need of money.

A banker is a dealer in capital or more properly a dealer in money. He is an intermediate party between the borrower and the lender. He borrows from one party and lends to another.

DEFINITION  OF CUSTOMER:-

A customer is a person who has some sort of account, either deposit or current  or some similar relation with a bank and from this it follows that any person could become a customer by opening or current account or having some similar relation with a bank.

Relationship between Banker and Customer:-

There are two types of relationship between banker and customer

1. General relationship
2. Special relationship

General relationship:- 

The general relationship between banker and customer are describes into 2 forms:-

• Primary relationship 
• secondary relationship 

Primary Relationship:-  Relation of debtor and creditor:-  The true relationship between a banker and his customer is that of a debit and a creditor.

Creditor must demand payment:- 

The banker is a debtor and customer is creditor, it is not at all necessary for the debtor to go to the creditor to pay the amount.

demand must be made in proper from:-

it means that the demand for the refund of money deposited must be made through a cheque or an order as per the common usage amongst the banker.

 Secondary relationship:-

Bailee-Bailor:-  Whom delivered the goods are bailee. delivering the goods one person to another for some purpose upon a contract, they are bailor.

Lessor-Lessee:- On hiring out of locker, bank becomes lessor and the hirer a lessee and the relationship is that of landlord and tenant.

Guarantor and Guarantee:- A bank as guarantor gives guarantee to its customer by issuing a letter of credit. A bank guarantee contains an undertaking to pay the amount without any demur on mere demand of the principal amount on the ground for non-performance or beach of contract.

Agent principal:-

• Purchasing or selling of securities.collection of income.collecting cheques, hundies, drafts of the customers.Receiving safe custody valuables and securities lodged by his customers.

Fiduciary relationship:- 

Every relation of trust and confidence is a fiduciary relation. 

Special relationship between banker & customer:-

Duties of a banker:- these duties are as following:-

1. Duty to provide proper service to customer.
2. Duty to pay bill
3. Duty to submit periodical statements.
4. Duty to care
5. Duty to maintaining secrecy of customer's account.
6. Duty to honour the customer's cheques.
7. Duty to give reasonable notice before closing the account.

Duties of customer's to banks:-

1. To draw cheques in such a manner so as to avoid any change of alternation.
2. To pay reasonable charges for services rendered.
3. To make a demand on the banker for repayment of deposit.

Rights of banker:-

1. Right to retain goods
2. Right to recover extra ordinary expenses.
3. Right to full value of goods.
4. Right to close accounts.
5. Right not to produce books of accounts.