QS Study

Banker’s Obligations to Customer

Banks are essential for carrying on business nowadays. A customer makes lots of classified statements to his bank for purposes of borrowing and depositing money with the bank. The relationship that arises between banker and customer, in conducting, various businesses involve certain obligations and rights on the banker as well as the customer. The bank becomes a debtor of the customer when the customer deposits money in a bank account.

The main customer’s obligations to his bank are:

(a) the customer is under the duty to exercise reasonable care when drawing his cheques, to help prevent fraud or forgery,

(b) the customer must go to his bank when he requires payment it is not the incumbent on the banker to seek out the customer,

(c) before drawing the cheques, the customer must ensure his account is put in funds to meet it;

(d) A customer must pay reasonable interest and commission and other charges for banking services and this is implied when he/she opens an account.

(e) It is a statutory obligation of the bank, having sufficient funds of the customer to pay cheques duly drawn and presented.

(f) It is one of the principal duties of the banker to maintain complete secrecy of the status of customer’s account and failure to do so will make the bank to compensate the customer for any damage or loss suffered.

(g) The banker keeps books of accounts of the customers which records every transaction of the customer with the bank.

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