Banker-customer relationship arises from the services rendered by banks to their customers. The relationship varies depending on the services.
a. Debtor-Creditor (Bank as the Debtor and Customer, the Creditor) When a customer deposits money by opening an account with the bank, the customer becomes a lender and the bank becomes borrower. As such, the relationship is that of a Debtor and Creditor.
b. Creditor-Debtor (Bank isa Creditor and Customer a Debtor) When the bank lends money to the customer, the customer is the borrower and the bank is the lender. The relationship, therefore, is that of a Creditor and Debtor. The Customer/ Borrower executes documents and offers security to the Bank before utilising the loans.
c. (Bailee-Bailor Relationship) When a customer deposits certain valuables such as bonds, securities or other documents with the bank, for safe custody, the bank performs the role of a bailee and the customer is the bailor.
d. Agent-Principal Relationship (Bank is Agent and Customer is Principal) Some of the ancillary services rendered by the bank are remittances, collection of cheques, bills, etc., on behalf of the customers. It could also undertake to pay regularly, based on the instructions of the customer, electricity bills, telephone bills, insurance premia, club fees, etc. In all such cases, the bank acts as an agent, the principal being the customer.
e. Lessor and Lessee (Bank is a Lessor and Customer is a Lessee) When a bank provides safe deposit lockers to the customers who hire them on lease basis, the relationship is that of lessor and lessee.
f. Trustee and Beneficiary (Bank - Trustee and Customer - Beneficiary) When a trust is created appointing the bank as a trustee, the relationship is that of a trustee and a beneficiary.
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