customer relationship Banker Customer Relationship Banker 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 ID: 170960
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Slide1
Banker customer relationship Slide2
Banker Customer Relationship
Banker: 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.
Customer: any one conducting banking transactions with a bank is a customer.
A person who has an account in a bank is said to be a customer of the bank.
A person whose money has been accepted by a bank on the footing that they undertake to honor
cheques
up to the amount standing to his credit.
According to current banking practices only those persons are said to be customers who maintain a regular bank account . Slide3
Qualification of a customer
Nature of relationship is purely contractual.
Any one who is capable of entering into a contract can be a customer.
He must not be a minor. He must have attained the age of majority. A person is deemed to have attained majority when he has completed his age of 18 years.
He should be a person of sound mind. If not he is incompetent to contract. Section 12 of the contract act says that a person is said to be of sound mind for the purpose of making a contract if at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effect upon his interests.Slide4
Qualification of a customer
He shall not have been debarred from entering into any contract under any law.
Requisites of a contract:
Free consent
Competent to contract
Offer
Acceptance
considerationSlide5
Rights of a customer towards the banker
Rights:
To draw
cheques
against his credit balance.
To receive a statement containing a copy of his account with the banker. Customer has the right to get corrected any errors he finds.
To sue the bank for the cost, loss and damages when the
cheque
is wrongfully dishonored.
To sue when the banker has not maintained the secrecy of his account.
To claim for and receive the profit / return on his deposits as promised by the bank.Slide6
Duties of a customer towards the banker
Duties:
Customer must present the
cheques
for payment and collection within the business hours of his banker.
The customer should see that the
cheques
and other instruments are presented for payment within a reasonable time from the date of their issue.
Customer should keep his
cheque
book under lock and key so that no unauthorized person gets access to it.
He should draw
cheques
very carefully and in such a way that there is no room left for any fraudulent alterations and additions.
To pay charges to the bank. Bankers have the right to charge for the services they provide to their customers.Slide7
General relationship
The general relation ship between banker and customer is of a debtor and a creditor.
Creditor: a person from whom deposits have been received on the basis of participation in the profit & loss.
Debtor : a person to whom finance has been provided.Slide8
Other relationships
Bailor
and
Bailee
:
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 a
Bailor
and
Bailee
. Where the customer is the
bailor
and the banker is the
bailee
.
Old relationship started from earlier bankers-goldsmiths.Slide9
Principle and agent:
When a banker performs agency services he becomes agent of his customer. These services include collection of cheques and other instruments. Collection of utility bills and fees etc.Slide10
Pawner
/
pawnee
, mortgagor and mortgagee:
When a customer pledges goods and documents with the bank as security for an advance, he becomes the
pawner
and the banker becomes the
pawnee
.
Similarly when advance to the customer is made against security of immovable property the relationship becomes that of mortgagor and the mortgagee, where banker is the mortgagee and customer is the mortgagor. Slide11
Termination of relationship
Since banker customer relationship is a contractual one it may be terminated by any one of the two by serving a notice to the other.
Notice by a customer:
Change in the residence of the customer.
Customer may not be satisfied with the services offered by the banker.
Account may also be closed due to the death of the customer.Slide12
Notice by a banker
Banker may close the account of the customer for a number of valid reasons.
Cannot be done without giving reasonable notice.
Serve the notice generally on the following reasons.
Presentation of customer’s
cheques
for payment without having sufficient funds in the account.
When a customer is unable to keep a remunerative credit balance in the account.
Regular presentation of
cheques
after business hours.Slide13
Notice by a banker
Obstinacy of the customer.
When the customer does not close his account even after the expiry of reasonable notice given to him the banker may close the account by returning the entire credit balance in his account and asking for return of unused
cheques
.
Death of customer.
As soon as banker receives the intimation about the death of his customer he must stop payment of
cheques
drawn on him by deceased customer.Slide14
Customer insanity:
The mental disorder or insanity of customer automatically terminates the bank’s authority to act as his agent, since the banker customer relationship comes to an end.
Customer insolvency:
Insolvent customer looses all his rights.
As soon as the banker receives the notice of insolvency of his customer his authority to take any action on behalf insolvent customer comes to an end.
Order of court.
Unsatisfactory operation.