3.Banker -Customer Relationship.pptx General and Special Relationship

Banker -Customer Relationship.pptx General and Special Relationship

1. Banker Customer Relationship Dr.S.Jayanthi Sobhana Asst.Professor ,Department of commerce PA Sri Ramakrishna College of Arts & Science

2. In banking law, the relationship between a bank and its customer is primarily a debtor-creditor relationship that shifts depending on whether the customer deposits money (bank is the debtor) or takes a loan (customer is the debtor). 

3. This primary relationship is supplemented by several subsidiary relationships, including trustee-beneficiary for safe deposits, agent-principal for transactions, and bailor-bailee for valuables. 

4. Primary relationship: Debtor-Creditor Bank as Debtor, Customer as Creditor:   When a customer deposits money, the bank borrows from the customer. The bank is the debtor and the customer is the creditor who can demand the money back. Bank as Creditor, Customer as Debtor:   When a customer takes a loan or overdraft, the bank lends money to the customer. The bank becomes the creditor and the customer is the debtor, obligated to repay. 

5. Subsidiary (or special) relationships Trustee and Beneficiary:   The bank acts as a trustee for valuables or securities deposited for safekeeping, with the customer as the beneficiary.  Agent and Principal:   The bank acts as an agent when it carries out transactions on the customer's behalf, such as collecting checks or making payments. 

6. Lessor and Lessee:   When a customer rents a safe deposit locker from a bank, the bank acts as the lessor (landlord) and the customer is the lessee (tenant).  Pledger and Pledgee:   This applies when a customer pledges an asset (like shares) to the bank as security for a loan. The customer is the pledger, and the bank is the pledgee. 

7. Foundational principles Trust and Good Faith:  The entire banker-customer relationship is built on a foundation of trust. Duty of Secrecy:  Banks have a legal duty to maintain the secrecy of a customer's account and financial information, though there are legal exceptions.