2. INTRODUCTION
The word Bank derived from the Italian word “Banco” means “desk /
bench”.
Berenberg Bank is the oldest bank founded in 1472 in Italy.
The Bank of Hindustan, was established in 1770 and liquidated in 1829–32
The General Bank of India, established in 1786 but failed in 1791
The largest bank, and the oldest still in existence, is the State Bank of India
(S.B.I).
It originated and started working as the Bank of Calcutta 1806. In 1809, it
was renamed as the Bank of Bengal. This was one of the three banks
founded by a presidency government, in 1843. The three banks were
merged in 1921 to form the Imperial Bank of India, which upon India's
independence, became the State Bank of India in 1955
4. BANKER
DEFINITION
According to sec 5(c) of the Banking Regulation Act
1949, “a banker is a person who undertakes
business of banking. Banking means accepting
deposits from public, for the purpose of lending,
repayable on demand or otherwise with drawable by
cheque, draft, order”.
5. CUSTOMER
Meaning of customer
A customer means a person who seeks to open
account which banker accepts with proper
introduction. The relationship is not based on
frequency of transactions, and durations.
7. Primary Relationship
Debtor & Creditor Relationship
Bank is Privileged Debtor:
Banker is dignified debtor
Repayment of deposits on demand
Customer is unsecured creditor
Demand must in right place
Demand must in right time
8. Secondary Relationship
1. Bailee & Bailor Relationship
Bailor is a person who gives up the
possession of the goods to another
person (customer)
Bailee is an person who possess the
goods belongs to others (banker)
9. 2. Trustee & Beneficiary Relationship
Trustee is a person administrates the assets or fund for the benefit
of third party.
Beneficiary is a person who receives benefits from trustee as per
the instruction given.
3. Agent & Principal Relationship
Payment of bills, Tax, Bill of exchange purchase of securities, etc,.
4. Mortgagee & Mortgagor Relationship
Banker is Mortgagee & customer is Mortgagor
5. Guarantor & Guarantee Relationship
10. Special Relationship
Obligations:
a. Statutory Obligation to honour cheque
Banker honour cheque in following situation:
When there is balance inaccount
Correctness of cheque
Time of presentation of cheque
Legal restriction
11. b. Obligation to maintain secrecy of
customer
Banker can disclosure of information in following situations:
Disclosure of info under compulsion of law
Disclosure of info under baking practice (if fails to repay)
Disclosure by the instruction of customer
Disclosure for the interest of the nation
Disclosure as common courtesy (issuing LOC, discounting
bills)
12. Rights:
Right of banker’s Lien:
Lien is the right to retain the property belonging to
another until the debt due from the owner of that
property is repaid.
Types of Lien:
Particular Lien
General Lien
13. Right to charge interest
Right to charge commission
Right to charge incidental charges
Right to charge commitment charges
Right to Set off
Right to apportion of payment
Right to produce books of account
Right to Garnishee order