BANKER, CUSTOMER RELATIONSHIP BETWEEN BANKER AND CUSTOMER RIGHTS AND DUTIES OF A BANKER

1. BANKER AND CUSTOMER
RELATIONSHIP
Dr. R. THANGASUNDARI, MBA., M.Phil., Ph.D.,
Research Adviser and Assistant professor,
PG And Research Department Of Management Studies,
Bon Secours College For Women, Thanjavur-06.
South India, India.

2. RELATIONSHIP BETWEEN BANKER AND CUSTOMER

3. DEBTOR -CREDITOR
TRUSTEE-BENEFICIARY
AGENT - PRINCIPALBAILOR-BAILEE
ASSIGNOR-ASSIGNEE

4. DEBTOR- CREDITOR:
When a banker receives deposit from customer, if the deposit is to the
credit of the customer, the banker becomes a debtor and the customer creditor.
TRUSTEE – BENEFICIARY:
The banker is also a trustee whenever he/she undertakes to collect
cheques given for collection. Once the cheques are realized, the banker is a
trustee and the customer is a beneficiary.
AGENT – PRINCIPAL:
This relationship arises only in certain cases, when a customer
deposits draft, cheques, dividends, certificates etc., for collection he becomes
the principal and bank acts as his agent. In other words when a bank is
performing agency services for his customer he is acting as their agents.

5. BAILER – BAILEE
A bailment is the delivery of goods by one person to another for some
purpose upon a contract. As per the contract, the goods should when the
purpose is accomplished be returned or disposed off as per the directions of the
person delivering the goods is called the bailer and the person to whom the
goods are delivered is called the bailee.
ASSIGNOR – ASSIGNEE
An assigner is person who transfers property (Ex-Insurance) rights or
power to another. An assignee is a person (or) entity to which property right
(or) power are transferred as assignee is the one whom assignments are made.
An assignor can limit the operation of his/ her assignment and impose and
condition that the assignor thinks appropriate.

6. RIGHTS AND DUTIES OF A BANKER

7. 1.Rights of a Banker
Right of set off
Right of lien
Right of appropriation
Right to charge interest,
commission and brokerage
Right to close the account of
undesirable customer
2.Duty of a Banker
Duty to honor customer cheque
Duty to maintain secrecy of
customer account
Duty to render proper account of
deposits made and withdrawn by
customer

8. Right of a banker
RIGHT OF SET OFF:
When a debtor who owes a debt to the creditor recovers any debt due
from the creditor before the settlement of debt with the creditor is called the right of set
off.
RIGHT OF LIEN:
Lien is a right of a banker by which he can retain any security coming
to his possession for the purpose of any loan due by the customer. Lien is a right to
retain any security belonging to the customer. The right to retain any security by the
bank is called a lien.
RIGHT OF APPROPRIATION:
In right of appropriation, we find how a debtor who has three or four debit
account settle by making payment to the creditor.

9. Right of a banker
Right of a banker
Right to charge interest, commission and brokerage
A banker grants loan advances to customers and charges interest on the same. Banker
usually debits the customer’s account when a customer fails to pay the interest amount every
month. After period of three months, the interest will be added on to the principal amount and
the principal amount. This kind of interest added with the principal interest is called compound
interest and the banker has every right to do.
Right to close the account of undesirable customer
A banker has a right to close the account of the customer who is found undesirable as
he has been frequently issuing cheques which are bouncing or which are getting dishonored. Due
to this, the reputation of the banker is affected. In such a situation, the banker , after giving due
notice to the customer will close the account. In the case of other account holder, The happening
of certain events like death, insolvency, lunacy of customer, dissolution of firms or winding up of
companies will also lead to closing of accounts.

10. DUTIES OF A BANKER
Duty To Honor Customer Cheque
Every banker has a prime duty to honor customer’s cheques which are drawn
properly and presented during the working hours of the bank.
DUTY TO MAINTAIN SECRECY OF CUSTOMER’S ACCOUNT
The banker has an obligation towards the customer to maintain secrecy about
the status of the account. Under any circumstance, the banker should not reveal the
secrecy of customer’s account.

11. DUTY TO RENDER PROPER ACCOUNTS OF
DEPOSITS MADE AND WITHDRAWN BY
CUSTOMERS
As far as India is concerned, when there is bending on the customer to
go through the entries in the pass book the entries in the pass book, cannot be
taken as conclusive evidence and settled account. The customer has a right to
point out the mistake in the pass book at any time. In this way, the entries in
pass book do not form conclusive of transactions between banker and customer
Thank

12. Thank you