BANKER AND CUSTOMER - BANKING THEORY LAW AND PRACTICES

1. BANKER AND CUSTOMER Ms Ann Mercy J, Assistant Professor, Sri Ramakrishna College of Arts & Science

2. A banker refers to an individual or an institution that provides financial services to customers. Banks, credit unions, and other financial institutions fall under this category. Responsibilities of a banker include accepting deposits, granting loans, providing investment services, facilitating transactions, and offering various financial products such as savings accounts, credit cards, and mortgages. Bankers are bound by regulatory guidelines and ethical standards to manage funds entrusted by customers responsibly and to maintain the confidentiality and security of customer information . BANKER - Meaning Ms Ann Mercy J, Assistant Professor, Sri Ramakrishna College of Arts & Science

3. The statutory definition of banker which refers exclusively to 'banker' and not 'bank' can be found in the Bills of Exchange Act 1882 and the Cheques Act 1957. The banker is a person who: accepts money from, and collects cheques for, his customers and places them to his credit; (2) honours cheques or orders drawn on him by his customers when presented for payment and debits his customers accordingly; and (3) keeps current accounts in his books in which the credits and debits are entered. BANKER - Definition Ms Ann Mercy J, Assistant Professor, Sri Ramakrishna College of Arts & Science

4. A customer, in the banking context, refers to an individual, business, or entity that maintains an account or has a relationship with a bank or financial institution. Customers engage with banks to deposit funds, withdraw money, borrow loans, receive financial advice, and utilize various banking services. The relationship between a bank and its customers is governed by contractual agreements and regulatory frameworks that outline rights and responsibilities for both parties. Customers entrust their funds to banks with the expectation of safety, accessibility, and reliability of banking services. CUSTOMER Ms Ann Mercy J, Assistant Professor, Sri Ramakrishna College of Arts & Science

5. According to Sir John Paget, to constitute a customer there must be some recognizable course or habit of dealing in the nature of regular banking business. CUSTOMER - Definition Ms Ann Mercy J, Assistant Professor, Sri Ramakrishna College of Arts & Science

6. General Relationship between Banker and Customer Ms Ann Mercy J, Assistant Professor, Sri Ramakrishna College of Arts & Science

7. Debtor and Creditor Relationship Trustee and Beneficiary Relationship Principal and Agent Relationship Lessor and Lessee Relationship Pledger and Pledgee Relationship Bailor and Bailee Relationship Advisor and Client Relationship Mortgagor and Mortgagee Relationship Hypothecator and Hypothecatee Relationship Ms Ann Mercy J, Assistant Professor, Sri Ramakrishna College of Arts & Science

8. Special Relationship between Banker and Customer Ms Ann Mercy J, Assistant Professor, Sri Ramakrishna College of Arts & Science

9. Maintaining Records Maintaining Confidentiality Obligation to Honor Cheques Ms Ann Mercy J, Assistant Professor, Sri Ramakrishna College of Arts & Science

10. Banker’s Rights Ms Ann Mercy J, Assistant Professor, Sri Ramakrishna College of Arts & Science

11. Right to charge interest Right to levy commission and service charges Right of Lien The Right of Set-off Right of Appropriation Right to Close the Account Ms Ann Mercy J, Assistant Professor, Sri Ramakrishna College of Arts & Science

12. Obligation of a Banker Ms Ann Mercy J, Assistant Professor, Sri Ramakrishna College of Arts & Science

13. The obligation of Bankers to Honor Checks The obligation of bankers to Maintain Secrecy The obligation of the Banker to Maintain Proper Records The obligation of the Banker to Follow the Customer’s Instructions The obligation of the Banker to give Notice before Closing the Account Ms Ann Mercy J, Assistant Professor, Sri Ramakrishna College of Arts & Science

14. Banker’s duty to maintain Secrecy Ms Ann Mercy J, Assistant Professor, Sri Ramakrishna College of Arts & Science

15. It is of utmost important that the bank ensures all banking records of the customers are protected and are not available to any other party or organisation with the customer’s consent . Ms Ann Mercy J, Assistant Professor, Sri Ramakrishna College of Arts & Science

16. Section 13 of the Banking Companies ( Acquisition and Transfer of Undertakings) Act, 1970, specially requires them to “observe, except as otherwise required by law, the practices and usages customary amongst bankers and in particular not to divulge any information relating to the affairs of the constituents except in circumstances in which they are, in accordance with law or practices and usages or appropriate for them to divulge such information.”

17. Thank You Ms Ann Mercy J, Assistant Professor, Sri Ramakrishna College of Arts & Science