QS Study

Bank Customer

A person who has a bank account in his name and for whom the banker undertakes to provide the facilities as a banker is considered to be a customer. The relationship between banker and customer begins as soon as money or cheque is paid in and the bank accepts it and is prepared to open an account.

To constitute a customer the following requirements must be fulfilled:

(a) The bank account may be savings, current or fixed deposit must be operated in his name making a necessary deposit of money.

(b) The dealing between the banker and customer must be of the nature of the banking business.

A general relationship between banker and customer: The general relationship between banker and customer are as follows:

  1. Relationship as debtor and creditor.
  2. Banker as a trustee.
  3. Banker as an agent.

Relationship as debtor and creditor: On the opening of an account the banker assumes the position of a debtor. A depositor remains a Creditor of his banker so long as his account carries a credit balance. Relationship with the customer is reserved as soon as the customer account is overdrawn. Banker becomes a creditor of the customer who has taken a loan from the banker and continues in filet rapacity fills the loan is repaid.

Banker as a trustee: A banker is a debtor of his customer in the report of the deposit made by the letter but in certain circumstances, he acts as trustee also. A trustee hold holds money or asset and performs certain functions for the benefit of some other person called the beneficiary. For example; if the customer deposits securities or other values with the banker for the safe custody, the letter acts as a trustee of his customer.

As an agent: A banker acts as an agent of his customer and performs a number of agency functions for the conveniences of his customer. For example; he buys or sells securities on behalf of his customer, collects cheques on his behalf and makes payment of various dues of his customer.

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