The presentation deals with various relationships between a bank and its customer. This presentation defines bank and customer along with this it explains 4 major relationships of bank and customer

1. BANKER - CUSTOMER
RELATIONSHIP
BANKING LAW

2. WHO IS A
BANKER?
• An institution which borrows money by accepting deposits from the
public for the purpose of lending to the needy.
• Section 5(b) of Banking Regulation Act,1949
• To sum up,banker is who-
 Take deposit account
 Take current accounts
 Issue and pay cheques
 Collect cheques crossed and uncrossed for his customers

3. WHO IS A CUSTOMER?
•A person who has same sorted of an account, either deposit or current
account or some similar relation with a banker.
•To consider any person as a customer, following conditions must be
satisfied-
 He must have some sort of account
 Even a single transaction may constitute as a customer
 Frequency of transactions is anticipated but not insisted upon
 The dealing must be of banking nature.

4. GENERAL RELATIONSHIPS BETWEEN
BANKER AND CUSTOMER
Debtor
and
Creditor
Principal
and
Agent
Bailer
and
Bailee
Mortgage
e and
Mortgagor

5. DEBTOR AND CREDITOR
When a customer
opens an account
with a bank, then
the relationship
is that of debtor
and creditor.
In case of
savings/fixed
deposit/current
account, the
banker is the
debtor, and the
customer is the
creditor.
In case of loans
and advances
accounts, banker
is the creditor,
and the customer
is the debtor.
A customer
remains a
creditor until
there is credit
balance in his
account with the
banker.

6. PRINCIPAL AND AGENT
Agent is defined u/s 182 of the Indian Contract Act.
Banker acts as an agent of the customer(principal) by providing
the following agency services:
• Buying and selling securities on his behalf
• Collection of cheques, dividends, bills, promissory notes on his
behalf
• Acting as a trustee, attorney, executor, correspondent or
representative of a customer
• bank as an agent performs many other function such as payment of
insurance premium, electricity and gas bills, handling tax problems,
etc.

7. BAILEE AND BAILOR
Section 148 of Indian
Contract Act defines the term
Bailment.
2 parties-Bailer
Bailee
When a customer gives a sealed
box to the bank for safe keeping,
the customer becomes the bailor
and the bank becomes the bailee.

8. MORTGAGEE AND MORTGAGOR
Section 58(a) of Transfer of Property Act defines Mortgage
2 parties- Mortgagor
Mortgagee
Relationship between a banker and his customer is
established when the customer executes a mortgage deed in
respect of his immovable property in the favor of the bank.

9. By-DHARA SHARMA
LL.M (2nd Sem)
Business Law.