The relationship between a bank and its customers can be general or special. Generally, it is that of debtor-creditor, with the bank as trustee and custodian of customers' assets. The general relationship also makes the bank an agent and bailor of customers' goods. Specifically, banks have obligations to maintain secrecy of accounts, honor checks drawn by customers, pay bills as instructed, provide proper services, and submit account statements periodically. Banks have corresponding rights like lien over customers' assets, set-off of accounts, appropriation of payments, and charging interest. The relationship ends upon death or insolvency of a customer, voluntary account closure, or completion of the specific transaction or contract.

1. BANKER AND CUSTOMER
RELATIONSHIP

2. Bank – Refers to an institution or any other who
accepts deposit from the public through various
scheme and lends the same amount to needy
people and performs agency functions.
Features of Bank
1. Bank should deal with money
2. Individual/ Firm/ Company
3. Acceptance of deposit
4. Lending loans
5. Name identity
6. Banking Business
7. Profit motives through services

3. Banker-Customer Relationship
a) General Relationship b) Special Relationship.

4. General Relationship (Primary)
1. Debtor – Creditor
2. Trustee and beneficiary relationship (Bank as Trustee cares assets)
3. Bailee – Bailor (bailment of tangible goods bank as bailee)
4. Lessor and Lessee (bank will be lessor)
5. Agent and Principal
6. As a Custodian (While opening a demat account bank becomes a
custodian.)

5. The relationship between a bank and a
customer ceases/stops on:
 The death, insolvency, lunacy of the customer.
 The customer closing the account i.e. Voluntary termination
The closing of the account by the bank after giving due notice.
 The completion of the contract or the specific transaction.

6. Special relationship (Secondary)
Obligations of Banker
1. Duty to maintain secrecy/confidentiality of customers' accounts.
2. Duty to honor cheques drawn by customers on their accounts and collect
cheque, bills on his behalf.
3. Duty to pay bills etc., as per standing instructions of the customer.
4. Duty to provide proper services and act as per the directions given by the
customer
5. Duty to submit periodical statements i.e. informing customers of the state of
the account
6. Articles/items kept should not be released to a third party without due
authorization by the customer

7. Rights of banker
Right to Lien - A lien is the right of a creditor in possession of
goods, securities or any other assets belonging to the debtor to
retain them until the debt is repaid.

8. Lien has 2 Types they are:
1. Particular Lien
2. General Lien
Right of set-off
Right to Automatic set off
Right to Appropriation
Right to charge interest, commission etc.,
Right to withhold payments on issue of Garnishee
Order

9. THANK YOU