The relationship between a banker and customer can take several forms: 1. Debtor-creditor, where the bank is a debtor when a customer deposits money and a creditor when providing loans. 2. Bailee-bailor, where the bank takes custody of customer valuables as a bailee responsible for their safe return. 3. Trustee-beneficiary, where the bank acts as trustee for customer securities and valuables held for safekeeping. 4. Principal-agent, where the bank performs agency functions like cheque collection on behalf of the customer principal. 5. Pledgee-pledger, where the bank holds customer movable property as collateral security with the customer as p

1. RELATIONSHIP BETWEEN
BANKER AND CUSTOMER
L. PRAKASH KANNAN, M.COM, M.PHIL., (PH.D.), ASSISTANT PROFESSOR,
S. J. MONISHA, II B.COM,
PARVATHY’S ARTS AND SCIENCE COLLEGE, DINDIGUL

2. BANKER - MEANING
• A banker is an employee of a bank or financial institution who services the financial
needs of clients. These clients can be individuals or institutions, both with different
needs. A banker tries to maximize the profit of a bank while maintaining appropriate risk
levels.
• Bankers raise capital to make loans and investments. They charge interest and fees for
the service and seek profit on the investments.
• There are different types of bankers. They are
1. Personal Bankers
2. Commercial Bankers
3. Investment Bankers
4. Merchant Bankers

3. CUSTOMER - MEANING
• A customer is a person who has some kind of account, such as deposit or current with a
bank and from this it follows that any person may become a customer by opening a
deposit current account or having some similar relation with a bank.
• A customer is a person; he/she should have some kind of an
account with the bank.

4. RELATIONSHIP BETWEEN BANKER AND
CUSTOMER
• DEBTOR AND CREDITOR
• BAILEE AND BAILOR
• TRUSTEE AND BENEFICIARY
• PRINCIPAL AND AGENT
• PLEDGE AND PLEDGER

5. DEBTOR AND CREDITOR RELATIONSHIP
• This is the primary relationship between a banker and its customer.
• When customer deposits money with a bank the relationship of debtor and creditor will
be established. In this case Banker is the Debtor an Customer is the Creditor.
• When the customer overdrawn is account he become debtor and the bank a creditor.
• When a bank grants loan and other credit facilities to the customer, the relationship
between the banker customer is reversed, that the customer is Debtor and Banker is
Creditor.

6. BAILOR AND BAILEE
• A bank function as a bailee when it keeps valuable articles, ornaments, title deeds, etc.,
of its customers. The bank takes custody of these things and it is implied the
responsibility of the bank to return these things safely.
• Thus the bank is a bailee and the customer is bailor.
• It is also liable to compensate any loss to the property under its custody.

7. TRUSTEE AND BENEFICIARY RELATIONSHIP
• The banker becomes a trustee when he accepts securities or valuable from the
customers for safe custody. In this relationship banker is a trustee and customer is a
beneficiary.
• The banker acts a trustee for his customers in those cases where
• He accepts securities and other valuables for safe custody.
• If money is deposited to the bank with a special instruction to retain it till the customer
gives further instruction.
• When a cheque or bill is deposited with the bank for collection until it is collected and
credited to the customers account.

8. PRINCIPAL AND AGENT
• Banker acts as an agent of the customer in those cases where it performs agency
functions:- such a collection of cheque and bills of exchange on behalf of his customer,
purchasing and selling of securities on behalf of his customer, payment of insurance
premium, executing standing instructions etc.

9. PLEDGE AND PLEDGER
• Pledge means the bailment of goods as security for payment of a det or performance of
a promise. When facility is provided by a bank to its customers against collateral
security of movable property, the relationship of pledger and pledgee is established.
• In this case customer is the pledger and banker is the pledgee.