BANKER- CUSTOMER RELATIONSHIP

A PRESENTATION BY B.J.VED WISH U ALL A HAPPY LEARNING

BANKING-SEC.5(b)OF BRA1949
Accepting of deposits Lending or investing(Purpose) From Public Payable on demand or therwise Withdrawal of deposits by cheque, draft
etc.

CUSTOMER
Maintaining any type of a/c Submission of a/c opening form fulfilling

KYC requirements Customer of specific branch only but with CBS advantages Not defined till 2002. Only mention in Sec 131 of N.I.Act. Now defined in Consumer Protection Act 1986.
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RELATIONSHIP
TRANSACTION
*DEPOSITS *LOANS/ADV. *BILLS - COLLECTION *BP/BD *LOCKER *ARTICLES-SAFE CUS.

BANKERS RELATION
DEBTOR CREDITOR AGENT HOLDER FOR VALUE LESSOR BAILEE
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CONTINUED
*INVESTIGATION *EXECUTOR/TRUSTEE *CUSTODIAL SERVICES REFEREE TRUSTEES CUSTODIAN

TERMINATION OF RELATIONSHIP
Notice of Death/insolvency of customer or
liquidation of company/lunacy Closure of a/c by customer (Voluntary) Closure of a/c by bank (Due Notice)

DUTIES OF BANKER
(1) To honour cheques provided 1. Cheque properly drawn/ Not post dt. Or stale 2. presented within business hours 3. Regular/proper endorsement 4. Sufficient balance in a/c/Limit 5. Relation is not terminated: a. death b. insolvent/lunatic 6. Payment is not stopped by drawer 7. Garnishee/income tax order
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DISHONOUR OF CHEQUES
Funds insufficient/exceeds arrangement Stop Payment by customer or by attachment
order or court order/ withdrawal stopped owing to death or lunacy or insolvency of a/c holder/ Cheque Altered & no authentication, Cheque post dated, un-dated, out dated, Effects not cleared-Present again, A/c closed, Refer to drawer ect. Instrument specially crossed to ----------Earmarked balance not sufficient
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(2) DUTY TO MAINTAIN SECRECY

Moral and legal duty Reputation of customer Applicable to transactions & security Continues even after death/closing of a/c Applicable for information obtained from
outside Divulge customary information

Exceptions To Duty Of Secrecy

A. UNDER COMPULSION OF LAW
1. 2. 3. 4. 5. 6. INCOME TAX ACT 1961 SEC 131/133 BANKERS BOOK EVIDENCE ACT CODE OF CIVIL PROCEDURE ACT RBI ACT 1934 BANKING REGULATION ACT 1949 GIFT TAX ACT 1958 SEC-36
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CONTINUED
Information to be furnished provided:
* Request is in writing under relevant section and act * Request is by authorised person * Furnish only asked information * Only specific(not general) infomation * Diff in a/c, name no info. to be furnished * Fact to be advised to a/c holder
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EXPRESS/IMPLIED CONSENT OF CUSTOMER

Customer himself directs to bank Only required information to be given Authority by customers actions or deeds

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DISCLOSURE TO PROTECT BANK/NATIONAL INTEREST

FILLING A FIR IN A FRAUD CASE FILLING A SUIT IN A COURT OF LAW INVOKING A GUARANTEE
*UNDER NATIONAL INTEREST: WITH REFERENCE TO HIGHER AUTHORITY

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DISCLOSURE UNDER BANKING PRACTICES

Opinion based on branch dealings and not
based on market dealings Disclosure by general statement and not by actual figures Impartial without prejudice In strict confidence and without responsibility

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(3)DUTY TO RENDER ACCOUNTS FOR SERVICES

To provide passbook or statement of a/c duly completed in all respects (4)To collect cheques, drafts etc. (5) To give reasonable notice before a/c is closed.

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LIABILITY IN CASE OF BREACH OF DUTY OF SECRECY

LIABLE TO CUSTOMER LOSS OF MONEY AND REPUTATION COURT TO CONSIDER ACTUAL LOSS OF
MONEY AND DAMAGE OF REPUTATION

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RIGHTS OF A BANKER
PARTICULAR LIEN: I.e. TAILORS LIEN GENERAL LIEN: LEGAL POSSESSION

UNTIL THE WHOLE OF THE DEBT IS PAID. (1)BANKERS LIEN IS GENERAL LIEN KNOWN AS IMPLIED PLEDGE RIGHT OF SALE IS ALSO AVAILABLE TO BANK WITH REASONABLE NOTICE. AGAINST TIME BARRED DEBTS ALSO
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BANKERS RIGHT OF LIEN

GEN. LIEN ON ALL GOODS & SECURITIES GOODS & SECURITIES IN THE NAME OF

BORROWER ONLY AVAILABLE AFTER REPAYMENT OF LOAN ALSO CHEQUES FOR COLLECTION CREDIT BAL. SUBJECT TO RIGHT OF SETOFF AND NOT LIEN
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LIEN CANT BE EXERCISED

SPECIFIC CONTRACT AT VARIANCE HELD AS TRUSTEES OR AGENT OWNED BY MORE THAN TWO PERSONS SDV & SAFE CUSTODY DOCUMENTS LEFT BY MISTAKE OR
NEGLIGENCE WHERE LOAN IS NOT YET DISBURSED

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(2)BANKS RIGHT OF SET-OFF

COMBINE SEVERAL A/Cs OF BORROWER LETTER OF SET-OFF TO BE OBTAINED REASONABLE NOTICE TO CUSTOMER CUSTOMER HAS NO CORRESPONDING
RIGHT OF SET-OFF TO COMBINE HIS A/Cs FOR PURPOSE OF WITHDRAWAL

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SET-OFF IS APPLICABLE IF
A/Cs ARE IN SAME NAME AND RIGHT BELONGING TO ONE PERSON i.e. SB A/C AND

PROPRIETORSHIP FIRMS ACCOUNT PARTNERS INDIVIDUAL A/C(CREDIT) AGAINST FIRMS DEBT AS LIABILITY OF PARTNERS IS JOINT & SEVERAL INDIVIDUALS A/C CREDIT BAL. AGAINST DEBIT BALANCE IN JOINT A/CS ALSO FORTWO A/CS AT DIFFERENT BRANCHES EVEN AGAINST TIME BARRED DEBTS SET-OFF BEFORE GARNISHEE/IT ORDER 21

RIGHT OF SET-OFF IS NOT APPLICABLE IF

FUTURE & CONTIGENT DEBTS DEBIT BAL. IN PERSONAL A/CS AGAINST
CREDIT BAL. IN JOINT A/C, CAPACITY AS TRUSTEE, AGENT, GUARDIAN, EXECUTOR ETC NO CLEAR CREDIT BALANCE

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(3)RIGHT OF APPROPRIATION (CLAYTONS RULE) &. 59 TO 61 OF IND. CONTRACT ACT 1872

DEBTORS INSTRUCTIONS TOWARDS SPECIFIC

DEBT IN ABSENCE OF DEBTORS INSTRUCTIONS, BANK TO APPLY TOWARDS ANY LAWFUL DEBTS (EVEN TIME-BARRED DEBTS) IN ABSENCE OF BOTH AS ABOVE ,TO BE APPLIED IN ORDER OF TIME OF CREATION OF DEBT WHETHER TIME-BARRED OR NOT. IF DEBTS ARE OF EQUAL STANDING, PAYMENT TO BE APPLIED PROPORTIONATELY>
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BANKERS RIGHTS
(4)CHARGE INTEREST,COMMISSION, EXCHANGE, INCIDENTAL CHARGES FOR SERVICES RENDERED AND SOLD TO CUSTOMERS

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CUSTOMERS DUTIES
A/c to be conducted satisfactorily.
Maintain Min. Reqd. Bal. Cheques to be drawn properly so as not to facilitate forgery or fraud. To give full & proper instructions while countermanding a cheque. To make demand for payment To pay charges for services rendered

THANK YOU

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