The document discusses the relationship between bankers and customers. It outlines that they have a contractual relationship and the banker acts as an intermediary between borrowers and lenders. The main relationships discussed are: 1. Creditor-debtor, with the customer as creditor and banker as debtor for deposit accounts. 2. Debtor-creditor, with the customer as debtor when taking a loan from the banker creditor. 3. Principal-agent, with the banker performing services like collections and payments as an agent for the customer principal. 4. Other relationships like trustee-beneficiary, bailor-bailee, pawner-pawnee, mortgagor-mort

1. BANKER CUSTOMER RELATIONSHIP
- As you may have guessed from all the fine print, you have a contractual relationship
with your bank.
to,
Mr. Gautam Shah.
by,
Mitika Patel.
93.
Augest,2012.

2. PREFACE:

3. ACKNOWLEGEMENT:
First and foremost, we would like to thank to our
supervisor of this project, mr. Gautam shah for the
valuable guidance and advice. He inspired us greatly to
work in this project. Her willingness to motivate us
contributed tremendously to our project. We also would
like to thank her for showing us some example that
related to the topic of our project. Besides, we would
like to thank the authority of m.s. university (msu) for
providing us with a good environment and facilities to
complete this project.it gave us an opportunity to
participate and learn about the operation of flights
ticket reservation.
Finally, an honorable mention goes to our families
and friends for their understandings and supports on us
in completing this project. Without helps of the
particular that mentioned above, we would face many
difficulties while doing this.
Mitika patel.

4. CONTENTS:
1. Cover Page.
2. Preface.
3. Acknowledgement
4. Content
5. Introduction
6. Banker
7. Customer
8. Relationship between banker and
customer
9. Debtor-Creditor
10. Creditor- Debtor
11. Agent- principal relationship
12. Different types of agent- principal
relationship
13. Bibliography

5. *Introduction:
Today, many businesses such as banks, insurance
companies, and other service providers realize the importance
of Customer Relationship Management (CRM) and its potential
to help them acquire new customers, retain existing ones and
maximize
their lifetime value.
*Banker:
A banker is a dealer in capital or more properly a dealer in
money. He is an intermediate party between the borrower and
the lender. He borrows from one party and lends to another.
Banking has been defined as
“Accepting for the purpose of lending or investment of deposits of
money from the public, repayable on demand or otherwise and
withdrawals by check, draft, order or otherwise.
A banker is the one who gets into debts and creates debts.
According to H.L. HART –
the banker is one who receives money, collects cheques and
drafts, for customers, with an obligation to honour the cheques
drawn by customers from time to time subject to availability of
amounts in the account.
*CUSTOMER:
A person who buys goods or services from a shop or a
business entity. A person you deal with as a business entity. There
is no statutory definition.
A person/ company/entity who has an account with a bank
is a customer. There is no unanimity as regards to the time period

6. of the dealings. A casual transaction like encashment of a cheque
does not entail a person to be customer.
The duration of association of the customer with the bank is
of no essence.
*Banker and Customer Relationship:
• The relationship between the banker and customer is very
important. Both serve the society to grow and the economy
to expand.
*CREDITOR-DEBTOR:
 Relationship between the customer having a deposit account
and the banker.
 Depositor is the lender and the banker is the borrower.
 Depositor is the creditor and the banker is the debtor.
 The money handed over to the bank is a debt.
 The money once deposited in the bank becomes the money
of the bank and it is prerogative of the bank to use that
money as it deems fit. The depositor remains a creditor that
too an unsecured creditor.
*DEBTOR-CREDITOR:
 When the customer avails a loan or an advance then his
relationship with the banker undergoes a change to what it
is when he is a deposit holder.
 Since the funds are lent to the customer , he becomes the
borrower and the banker becomes the lender.

7.  The relation is the debtor- creditor relation, the customer
being a debtor and the banker a creditor.
*PRINCIPAL-AGENT:
 The special relationship between the customer and the
banker is that of principal and agent.
 The customer (principal) deposits checks, drafts, dividends
for collection with the bank.
 He also gives written instructions to the bank to purchase
securities, pay insurance premium, installments of loans etc
on his behalf. When the bank performs such agency services,
he becomes an agent of his customer.
 Sec.182 of ‘The Indian Contract Act, 1872’ defines “an agent”
as a person employed to do any act for another or to
represent another in dealings with third persons. The
person for whom such act is done or who is so represented
is called “the Principal”.
 One of the important relationships between a banker and
customer is that of an agent and principal. The banker
performs various services of the customer, where he acts as
the agent.
1. Buying and selling securities of customer
2. Collection of cheques, bills of exchange, promissory notes on
behalf of customer
3. Acting a trustee, executor or representative of a customer
4. Payment of insurance premium, telephone bills etc.
 DIFFERENT AGENT AND PRINCIPAL Relationship:

8. *BENEFICIARY-TRUSTEE:
 The bank act as a trustee for his customer in those cases
where he accept securities and other valuables for safe
custody.
 In such cases the customer continues to be the owner of the
valuables deposited with the bank.
 Section 3 of the Trusts Act defines a trustee as one to whom
property is entrusted to be administered for the benefit of
another called the beneficiary. A banker becomes a trustee
under special circumstances. When a customer deposits
securities or other valuables with the banker for safe
custody, the banker acts as trustee of customer.
*Bailer and Bailment:
 A bailment is the delivery of goods in trust. A bank may
accept the valuables of his customer such as jewellary,
documents, securities for safe custody.
 In such a case the customer is the Bailer and the bank is
bailee.
 The bank (bailee) charges a very small amount as service
charges for safe custody of the valuables from his customer
(bailer).
 This relationship between the bank and the customer as
bailee and bailer started from the days of earlier goldsmiths.
A bailment is the delivery of goods in trust. A bank may
accept the valuables of his customer such as jewellary,
documents, securities for safe custody.
 In such a case the customer is the Bailer and the bank is
bailee.

9.  The bank (bailee) charges a very small amount as service
charges for safe custody of the valuables from his customer
(bailer).
 This relationship between the bank and the customer as
bailee and bailer started from the days of earlier goldsmiths.
*Pawner and Pawnee:
 When a customer Pledge goods and documents as security
for an advance he then become Pawner (Pledger) and the
bank becomes the pawnee (pledgee).
 The pledged goods are to be returned intact to the pawner
after the debt is repaid by him.
 Pawn is a sort of bailment in which the goods are delivered
to another as a pawn, to be a security for money borrowed.
Thus a banker acts as a pawnee where a customer delivers,
he goods to him to be kept as security till the debt is
discharged. The banker can retain the goods pledged till the
debt is paid.
*Mortgager and Mortgagee relationship:
 Mortgage is the transfer of an interest in specific immovable
property for the purpose of securing the payment of money
advanced or to be advanced by way of loan.
 When a customer pledges a specific immovable property
with the bank as security for advance, the customer becomes
mortgager and banker is the mortagee.
 The relation between a banker as mortgagee and his
customer as mortgagor arises when the latter executes a
mortgage deed in respect of his immovable property in

10. favour of the bank or deposits the title deeds of his property
with the bank to create an equitable mortgage as security for
an advance.
*Lessee and lessor:
 when a customer hires a locker in the bank’s safe deposit
vault, the bank undertakes to take necessary precaution
for the safety of the articles in the locker. The relation
between the parties is that of a lessor and lessee.
* Guarantor and guarantee:
 a bank as guarantor gives guarantee to its customer by
issuing a ‘letter of credit’. It is a kind of credit facility to its
customer to facilitate international trade. A bank
guarantee contains an undertaking to pay the amount
without any demur on mere demand of the principal
amount on the ground for non-performance or breach of
contract.
* Fiduciary relationship:
 every relation of trust and confidence is a fiduciary
relation. A banker who receives a customer’s money is
under a duty not to part with it which is inconsistent with
the customer’s fiduciary character and duty. It was held
that banks old money for a specific purpose of sending it
somebody the money is impressed with trust.

11. BIBLIOGRAPHY:
 http://www.hanumant.com
 www.google.com
 www.wikipedia.com
 www.slideshare.com
 www.ask.com