Commercial Commercial BankingBanking

Commercial Commercial BankingBanking

Banker & Banker & Customer Customer

RelationshipRelationship

Banker & Banker & Customer Customer

RelationshipRelationship

Who is Banker?Who is Banker?

A Banker is a dealer in A Banker is a dealer in capital or more properly a capital or more properly a dealer in money. dealer in money.

Banker is an intermediate Banker is an intermediate party between the borrower party between the borrower and the lender.and the lender.

He borrow from a party and He borrow from a party and lend to another party.lend to another party.

Dr. Herber HartDr. Herber Hart

A banker or a bank is a person A banker or a bank is a person carrying on the business of carrying on the business of receiving money and collecting receiving money and collecting drafts for customers subject to the drafts for customers subject to the obligating of honoring cheques obligating of honoring cheques drawn upon them from time to time drawn upon them from time to time by the customers to the extent of by the customers to the extent of the amounts available on their the amounts available on their current account.current account.

Banking Company Banking Company OrdinanceOrdinance

Banking has been define as Banking has been define as accepting for the purpose of accepting for the purpose of lending or investment of deposits lending or investment of deposits of money from the public of money from the public repayable on demand or repayable on demand or otherwise and withdrawals by otherwise and withdrawals by cheques, draft, order or cheques, draft, order or otherwise.otherwise.

CustomerCustomer Person who maintain a regular account Person who maintain a regular account

with the bank without taking into with the bank without taking into consideration the duration and frequency consideration the duration and frequency of operation of his account.of operation of his account.

One should have an account.One should have an account. One should deal with the bank in its One should deal with the bank in its

nature of regular banking business.nature of regular banking business. One should deal with the bank without One should deal with the bank without

consideration of the duration and consideration of the duration and frequency of operation of his account.frequency of operation of his account.

General Relationship General Relationship between Banker and between Banker and

Customer Customer Customer brings the bread Customer brings the bread

and butter of the banker.and butter of the banker. No banking is without a No banking is without a

customer.customer. Customer act in various Customer act in various

status and categories whereas status and categories whereas the banker provide financial the banker provide financial services in different ways. services in different ways.

Debtor & CreditorDebtor & Creditor Customer deposit money with the bank Customer deposit money with the bank

then bank become debtor and creditor is then bank become debtor and creditor is the customer. the customer.

The customer expect from the banker The customer expect from the banker that the money deposited, remain safe at that the money deposited, remain safe at the bank and with the banker.the bank and with the banker.

The money placed at the bank should The money placed at the bank should have increase.have increase.

The position is reversed if the customer The position is reversed if the customer is advanced then the banker become the is advanced then the banker become the creditor and customer is the debtorcreditor and customer is the debtor

Principal & AgentPrincipal & Agent The customer is Principal when it The customer is Principal when it

deposit cash, cheques or draft for deposit cash, cheques or draft for collection with the bank.collection with the bank.

The bank act as an agent and get the The bank act as an agent and get the funds credited to customers account by funds credited to customers account by getting the proceeds against the getting the proceeds against the instrument.instrument.

The bank as an agent of the customer The bank as an agent of the customer purchase securities, paying insurance purchase securities, paying insurance premium, installment of loans etc. premium, installment of loans etc.

Bailer & BaileeBailer & Bailee Bailment is delivery of goods by Bailment is delivery of goods by

one person to another for some one person to another for some purpose on contract.purpose on contract.

The banker provides safe custody The banker provides safe custody facilities to their customer.facilities to their customer.

Bank accept valuables such as Bank accept valuables such as bonds documents or securitiesbonds documents or securities for for safe custody on behalf of customer. safe custody on behalf of customer.

In all cases banks act as Bailee to In all cases banks act as Bailee to customer on charging nominal fee customer on charging nominal fee for providing safe custody facilitiesfor providing safe custody facilities

Mortgager & MortgageeMortgager & Mortgagee

Mortgage is the transfer of an interest in Mortgage is the transfer of an interest in specific immovable property for the specific immovable property for the purpose of securing the payment of purpose of securing the payment of

money advance or to be advance by way money advance or to be advance by way of loan.of loan.

When customer offer his property for When customer offer his property for mortgage to avail financial assistance the mortgage to avail financial assistance the

customer become the mortgager and customer become the mortgager and banker act as mortgagee. banker act as mortgagee.

Banker is the TrusteeBanker is the Trustee Banker keep the customers valuable including Banker keep the customers valuable including

the documents and other items without the documents and other items without physically seeing and in trust between the two.physically seeing and in trust between the two.

The banker act as the trustee and the customer The banker act as the trustee and the customer remain the owner to the valuables. remain the owner to the valuables.

Executor- Attorney- Executor- Attorney- GuarantorGuarantor

The bank acts as an executor, The bank acts as an executor, attorney for its customer.attorney for its customer.

The bank executes the standing The bank executes the standing instruction of its customers instruction of its customers

for making for making various for making for making various periodic paymentsperiodic payments..

Customer Right & DutiesCustomer Right & Duties Customer can deposit and withdrew funds Customer can deposit and withdrew funds

without any restrictions.without any restrictions. Customer avail financing facilities to the Customer avail financing facilities to the

satisfaction of the banker.satisfaction of the banker. Customer has the right to receive all the Customer has the right to receive all the

documents pertain to the activities of his documents pertain to the activities of his account.account.

Customer has the right to sue the bank for Customer has the right to sue the bank for compensation for a wrongful dishonor of his compensation for a wrongful dishonor of his cheques cheques

Customer has a right to sue and demand Customer has a right to sue and demand compensation if the bank fails to maintain compensation if the bank fails to maintain the secrecy of his account.the secrecy of his account.

Customer has the right to check his Customer has the right to check his documents pertain to conduct of the documents pertain to conduct of the account and all those document that account and all those document that signed for facilities.signed for facilities.

Customer has the right to withdraw his Customer has the right to withdraw his amount during the banking hours and can amount during the banking hours and can see his banker during the time of banking see his banker during the time of banking