Banker-Customer Relationship Explained in Detail
Banking customer is defined as: A person or entity that maintains account and/or has business relation with the bank One on whose behalf. The relationship between bank and customer is based on simple contract. Meaning of a .. Duties and Obligations of Paying Bankers and Collecting Bankers. In a banker-customer relationship, one of the roles of banker is to act it is the responsibility of bank to ensure the security of these properties.
It includes a promise to repay any part of the amount due against the written order of the customer addressed to the bank at the branch, and as such written orders may be outstanding in the ordinary course of business for two or three days, it is a term of the contract that the bank will not cease to do business with the customer, except upon reasonable notice. The customer on his part undertakes to exercise reasonable care in exercising his written orders as not to mislead the bank or to facilitate forgery.
I think it is necessarily a term of such a contract that the bank is not liable to pay the customer the full amount of his balance until he demands payment from the bank at the branch at which the current account is kept. Butterworths, at p. However, this duty is subject to certain conditions aimed at realities of banking practice and business efficacy.
It is an implied term in the contract between the bank and its customer that the bank is not liable to repay the customer until demand is made for repayment.
Job Description of a Branch Relationship Banker
Until then, there is no presently due debt owed by the bank to the customer. Although, an oral demand would be technically sufficient to be termed as a valid demand, the normal practice adopted by banks is to consider a cheque or passbook as a demand, apart from the e- banking and mobile-banking methods.
However, as seen in the present context, banks may contract with its customers so as to enable the customers to withdraw money or make demand for repayment from any branch of the bank.RELATIONSHIP BETWEEN BANKER AND CUSTOMER (G.A for IBPS CLK & P.O 2016 EXAMS)
In such circumstances, there would be an added obligation created on the banks to conform to what they have contracted with their customers. The bank-customer relationship had been historically held as essentially a debtor- creditor relationship.
Even, in the decision of Foley v. Hill, 18 where it was National Provincial Bank Ltd. Lord Justice Bankes reached the same decision as Lord Justice Atkin, whilst adhering to the notion of implied superadded obligations.
This would mean repaying by the bank to its customers directly after the customers had deposited the money into their respective accounts. It would also be unrealistic to permit customers, like ordinary creditors, to demand repayment of the deposits from their banks, at any time and any place. Lord Justice Bankes observed in Joachimson v. When the bank acts outside the authority conferred by the mandate, effects of such acts will not be binding on the customer and therefore, bank alone would be liable for any loss incurred thereby.
There should be no legal impediments to the payment of the cheques. The cheque is also required to be drawn in proper form. Hulls 10 VLR L Weerasooria37 sums up the two courses of action seem to be open to the bank in this context; that is, either dishonor the cheque for want of funds or exercise discretion to grant the customer a temporary overdraft, since drawing of a cheque when funds are insufficient to meet it is equivalent to asking the bank for an overdraft 38 Another important concern for banks is the order of payment of cheques.
Duckworth LR 4 Ex ; Joachimson v. Bank of London 3 F The bank must either pay or refuse the payment by dishonour. The death of the customer terminates the authority given by the customer to the bank and would terminate the bank-customer relationship by operation of law. It also operates as an automatic countermand of any outstanding cheques. See also, Westminster Bank Ltd. Hilton 43 TLR Punjab National Bank Ltd.
- Relationship Officer Responsibilities and Duties
- The Banker—Customer Relationship; Rights and Duties
See also, Freeman v. Standard Bank of South Africa Ltd. A request by the bank to re-present the cheque amounts to dishonour and the bank would be liable if the dishonour is wrongful.
Vagliano Bros  AC at Bank of New South Wales  Knox However, the Ordinance is silent on what amounts to countermand and, who is entitled to countermand. Clear, unambiguous, unequivocal and unmistakable instructions of the customer to the bank to stop payment are the prerequisites of an effective countermand.
Collecting bank is the bank which collects cheques and receives the payment for the said cheques from the paying bank on behalf of its customer. The first standard [i. It is also essential that the bank should be informed of the countermand properly.
Institute of Bankers of Sri Lanka, at pp. Bank of England 17 CB ; Jones v. Gordon  2 AC ; Baker v.
Barclays Bank  1 WLR The bank would be deemed to have acted without negligence where it has acted reasonably. See for instance, Karak Rubber Co. Bank of Ceylon 59 NLR Midland Bank  2 All ER Apart from the legal requirement, the banking practice also jealously guards confidentiality of the customer accounts.
National Provincial and Union Bank of England. See also, Tournier v.
The duty remains even after the closure of the account and the termination of the bank-customer relationship. National Provincial and Union Bank of England  1 KBitself identified that the duty is not absolute and recognized certain exceptions to the duty.
Accordingly, a fiduciary duty could arise; 1. When the bank provides investment advice or financial advice to the customer,74 2. When the customer pledges an asset or signs a guarantee to secure the debt of another customer,75and 3.
When the bank acts as an agent or trustee for the customer. Hooley, Modern Banking Law 4 th ed Oxford: Oxford University Press, ; J. Blair ed Banks, Liability and Risk 3rd ed. Information may be gained from web sites, text books, the quality press, banks and building societies. The two banking professional bodies may also be able to assist.
List of Relationship Officer Responsibilities and Duties
Delivery of outcome 1 and 2 could be supported by learners undertaking independent research using indicated web sites, books and journals on the various topics covered in the unit to build on more formal classroom input from tutors. Learners will need guidance and tutorial support to ensure their research is carried out appropriately, enabling them to have sufficient knowledge and evidence to achieve the assessment criteria.
For outcome 1, this requires the learners to know the origins of banks. A poster presentation or an information leaflet which could be displayed at an open day or course recruitment event could be used as an assessment method. This could include an illustrated and annotated time line.
Know the rights and duties of a banker and of a customer Amplification of the Learning Outcome: Rights and duties of a banker: Duties of a customer: For outcome 2, this requires learners to know the functions of a bank.
Assessment for this outcome could take the form of a presentation to colleagues or a similar form to that used for outcome 1. Lien of the banker: For outcome 3, this requires learners to understand the need for liquidity and other sources of finance. Resources used for the delivery of this outcome could include a simple series of bank balance sheets to demonstrate the effects of reducing liquidity, ranging from one for a bank that is entirely i.