Banker and Customer Relationship

In any country, banks are well known profitable institutes. Banking is a business’ and is not a profession. But it is the safest place to keep your money. When you start your dealings with a banker he calls you as his customer. This article will illustrate the relationship between Banker and the customer.

The traditional business of the bank’ is accepting deposits on current accounts or otherwise, re-lending it for profits and paying and collecting cheques.

In general terms, when a person deposits money in a bank, he becomes a customer of that bank. This relationship between banker and the customer is a contractual relationship and both parties should be honest to each other.

Bankers’ services for his customers in modern world are so diverse. A customer can open and maintain different kinds of accounts and also could obtain the service of safe custody from the bank’ to protect their valuables.

When a customer deposits his money in a bank account, he becomes a creditor of the bank and the bank becomes a debtor of the customer.  On the other hand, when the bank lends money to his customer, the relation ship between the bank and customer is reversed. Then the bank takes the position as a creditor of the customer and the customer becomes a debtor of the bank.

In another instance customer takes position as a principal of the banker when he draws cheques on his account and the banker becomes his agent.   

However there are number of implied obligations between the banker and the customer. Receiving money and collecting bills for its customer’s accounts is a primary obligation of a banker. Customer has the right to withdraw money from his account and can order the banker to pay a third party by drawing a cheque on his account.

The banker has an implied duty to honour the cheques drawn by the customer in legal form.

Duty of secrecy is a very important principle in the customer and banker relationship.  Customers are especially keen on this particular duty of the banker. This duty is not limited to protect the secrecy of the balance of the customer’s account, but also to all other dealings which arise from the customer’s account.  This duty is known as “banker’s duty of confidentiality” towards the customer’s account.

But, it is important to know by every customer, that the monies of a customer in the bank are considered to be monies of the bank, and the bank can do what it hopes to do with that money until such money is demanded by the customer

However, Banks could offer different policies and services to their customers depending on the individual circumstances and the discretion of the bank manager involved. But many banks have special policies to deal with their ‘good customers’ and provide maximum service to such customers!   

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Published in: Personal Finance


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  1. Hi, my name is Jobain from University of Ilorin. Study banking and finance, i commend on this theses and i we be glad if you can be updating me at all time

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