Banker customer relationship

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Banker customer relationship

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  2. 2. BANKER CUSTOMER RELATIONSHIP. BANKER CUSTOMER RELATIONSHIP Customer/Account Holder Lord Lindley remarked that a customer is a person who has “some sort of account” either deposit or current account or similar relation with a banker. 2
  3. 3. BANKER CUSTOMER RELATIONSHIP. BANKER CUSTOMER RELATIONSHIP QUALIFICATION OF A CUSTOMER.  He should not be a minor.  He should be a person of sound mind.  He shall not have been debarred from entering into any contract, under any law.  Offer and acceptance. 3
  4. 4. BANKER CUSTOMER RELATIONSHIP BANKER CUSTOMER RELATIONSHIP. RIGHTS OF CUSTOMER.  To draw cheques against his credit balance.  To receive statement of account.  To sue the bank for wrongful dishonor of his cheques.  To sue the bank for not maintaining secrecy of his account. 4
  5. 5. BANKER CUSTOMER RELATIONSHIP. BANKER CUSTOMER RELATIONSHIP DUTIES OF CUSTOMER.  To present the cheques for payment within business hours.  To present the cheques for payment within a reasonable time from the issuance of cheques.  To keep his cheques book under lock & key.  To draw the cheques carefully. 5
  6. 6. BANKER CUSTOMER RELATIONSHIP. BANKER CUSTOMER RELATIONSHIP RIGHTS OF BANKER. Right of Lien. Lien is a right of a creditor to retain the goods and securities owned by the debtor until the debt due from him is paid. 6
  7. 7. BANKER CUSTOMER RELATIONSHIP. BANKER CUSTOMER RELATIONSHIP RIGHT OF SET-OFF. A banker like other creditors possess the right of set-off which enable him to combines two accounts in the name of same customer and adjust the debit balance in one account with the credit balance in the other. The right to combine two accounts is known as the right of set-off. 7
  8. 8. BANKER CUSTOMER RELATIONSHIP. BANKER CUSTOMER RELATIONSHIP Essential Features of Set-off.  The customer has been given a formal notice regarding the banker’s intention to exercise the right of set off.  The capacity of the a/c holder in all the accounts must be the same. 8
  9. 9. BANKER CUSTOMER RELATIONSHIP. BANKER CUSTOMER RELATIONSHIP  The right can be exercised only in respect of debts due and not in respect of future or contingent debts  The right can be exercised in respect of debts which are certain.  When a bank receives a garnishee order  For the purpose of this right of set-off the different branches of the bank will constitute one entity 9
  10. 10. BANKER CUSTOMER RELATIONSHIP. BANKER CUSTOMER RELATIONSHIP FOLLOWING ACCOUNTS CAN BE SUBJECT TO SET-OFF.  Debit balance of Trust Account can be set-off against the credit balance of trustees private account after the trustee is personally liable.  A deposit account can be set-off against an overdraft account.  If all the Joint a/c holders have given individual guarantees, a joint a/c can be set-off against individual a/c. 10
  11. 11. BANKER CUSTOMER RELATIONSHIP. BANKER CUSTOMER RELATIONSHIP BANKER’S DUTY OF SECRECY. One of the most important obligation of a banker is to take utmost care not to disclose the state of his customer account as such disclosure may do considerable harm to his reputation and business. But this obligation to maintain secrecy is not un-qualified. In certain circumstances the banker has to make such disclosure and the customer can not challenged the banker legally. 11
  12. 12. BANKER CUSTOMER RELATIONSHIP. BANKER CUSTOMER RELATIONSHIP Banker’s duty of secrecy is revoked when:  Under Compulsion of Law.  Disclosure in Public Interest.  Disclosure in Bank’s Interest.  Under Common Courtesy Among Bankers. 12
  13. 13. BANKER CUSTOMER RELATIONSHIP. BANKER CUSTOMER RELATIONSHIP TERMINATION OF RELATIONSHIP.        Notice by a customer. Notice by a banker. Death of customer. Customer insanity. Customer insolvency. Order of Court. Un-satisfactory Operation. 13

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