This document discusses the relationship between bankers and their customers, including their mutual rights and duties. It defines a banker as a financial institution that accepts deposits and lends money, and a customer as a person who has an account with a bank. The relationship can take several forms - debtor/creditor when a customer deposits money; bailor/bailee for safe deposit services; principal/agent when the bank acts on a customer's behalf; and trustee/beneficiary if a customer deposits securities for safekeeping. Mutual rights include set-off, appropriation, and charging interest on loans. Mutual duties include maintaining secrecy, honoring checks, following instructions, providing proper service, and submitting account statements.

1. BANKER CUSTOMER
RELATIONSHIP AND THEIR
MUTUAL RIGHTS AND DUTIES
CHRIST COLLEGE
SREERAMPURA, MYSURU

3. Group presentation
Topic:
BANKER CUSTOMER
RELATIONSHIP AND THEIR MUTUAL
RIGHTS AND DUTIES
Group Members
Swaroop Thomas (L)
Sr. Simi Jose
Sona Rose Scaria
Tony John

4. INTRODUCTION
 The relationship between banker and his customer depends
upon the nature of service provided by a banker. Accepting
deposits and lending and/ or investing are the core banking
business of the bank. In addition to its primary functions it
deals with various customers by providing other services like
safe custody services, safe deposit lockers and assisting the
clients by collecting their cheques and other instruments as an
agent and trustees for them.

5. Banker
 In general, bank or banker means a financial
institution that accepts deposits and lends money
to the needy people. It deals in money. A banker is
one who in the ordinary course of of his business,
honors cheques drawn upon him by persons from
and for whom he receives money on their account.

6. Customer
 A person who has an account with a bank is a customer.
Customer can be any person for whom the bank agrees
to conduct an account. The relation of a banker and
customer begins as soon as the first cheque is paid in
and accepted.

7. Different types of relationship
1. Debtor and Creditor
When customer deposit money, he becomes creditor
and bank as debtor by accepting and then further utilizing
it.
2. Bailor and Bailee
When banks provide safe custody facility to customers to
keep their valuable belongings. Customer is bailor and bank
is bailee

8. 3. Principal and Agent
Banks collect cheques, bills, and makes payement to
various authorities through rent, bills, insurance, premium
etc… Bank also abides by the standing instructions given by
its customers. In all such cases bank acts as an agent and
customer acts as a principal.

9. 4. Trustee and Beneficiary
Trustee holds property for the beneficiary, the profit earned
from this property belongs to the beneficiary. If the
customer deposits securities or valuable with the banker for
safe custody, banker becomes a trustee of his customer.
The customer is the beneficiary.

10. 5. Advisor and Client
When a customer invests in securities, the banker acts as
an advisor. The advice can be given officially or unofficially.
While giving advice the banker has to take maximum care
and caution. Here the banker is an advisor, and the
customer is a client.

11. Mutual Rights
Right of set off-
The mutual claims of a debtor and creditor are adjusted
together and only the remainder amount due is payable.
Right of appropriation-
If the customer has more than one loan account, the
customer can direct the repayment of the loan as credit into
any other accounts. If there is no specific directions from the
customers the banker has a right to appropriate as per his
choice.
Right to charge interest-
As a creditor the banker has right to charge interest on the
funds he lends as per the norms and as per the contract.

12. MUTUAL DUTIES
A) Duty to maintain secrecy/confidentiality of customers’
account
B) duty to honor cheques drawn by customers on their
accounts and collect cheque, bills on his behalf.
C) duty to pay bills etc.. As per standing instructions of the
customer.
D) duty to provide proper service.
E) duty to act as per the directions given by the customer.
If directions are not given the banker has to act
according to how he is expected to act.
F) duty to submit periodical statement like informing
customers of the state of the account
G) articles/ items kept should not be released to a third
party without due authorization by the customer