The document discusses the various types of relationships that can exist between a bank and its customers. It describes a banker as a dealer in capital who acts as an intermediary by borrowing from depositors and lending to others. A customer is defined as a person who has an account with the bank. The core relationships discussed are that of creditor-debtor when a customer deposits money, and debtor-creditor when a customer borrows from the bank. The document also outlines other relationships such as principal-agent, trustee-beneficiary, pawnee-pawner, mortgagee-mortgagor, and guarantor-guarantee.

1. As you may have guessed from all the fine print, you have a
contractual relationship with your bank
BANKER CUSTOMER
RELATIONSHIP

2. T O,
MR . GAUTAM SHAH .

3. W HAT IS THE MEANING OF
B ANKER ?
 A banker is a dealer in capital or more
properly a dealer in money.
 He is an intermediate party between the
borrower and the lender. He borrows from one
party and lends to another.
 Banking has been defined as “Accepting for the
purpose of lending or investment of deposits
of money from the public, repayable on
demand or otherwise and withdrawals by
check, draft, order or otherwise.

4. CUSTOMER
A person who buys goods or services
from a shop or a business entity. A person
you deal with as a business entity. There is
no statutory definition.
A person/ company/entity who has an
account with a bank is a customer. There is
no unanimity as regards to the time period
of the dealings. A casual transaction like
encashment of a cheque does not entail a
person to be customer.
The duration of association of the
customer with the bank is of no essence.

5. CREDITOR-DEBTOR
 Relationship between the customer having a
deposit account and the banker.
 Depositor is the lender and the banker is the
borrower.
 Depositor is the creditor and the banker is the
debtor.
 The money handed over to the bank is a debt.
 The money once deposited in the bank
becomes the money of the bank and it is
prerogative of the bank to use that money as it
deems fit. The depositor remains a creditor
that too an unsecured creditor

6. DEBTOR-CREDITOR
 When the customer avails a loan or an
advance then his relationship with the
banker undergoes a change to what it is
when he is a deposit holder.
 Since the funds are lent to the customer ,
he becomes the borrower and the banker
becomes the lender.
 The relation is the debtor- creditor
relation, the customer being a debtor and
the banker a creditor.

7. PRINCIPAL-AGENT
 The special relationship between the customer
and the banker is that of principal and agent.
 The customer (principal) deposits
checks, drafts, dividends for collection with the
bank.
 He also gives written instructions to the bank
to purchase securities, pay insurance
premium, installments of loans etc on his
behalf.
 When the bank performs such agency
services, he becomes an agent of his customer.

8. AGENT AND PRINCIPAL
R ELATIONSHIP
 BENEFICIARY- TRUSTEE:
section 3 of the Trusts Act defines a
trustee as one to whom property is
entrusted to be administered for the
benefit of another called the
beneficiary. A banker becomes a trustee
under special circumstances. When a
customer deposits securities or other
valuables with the banker for safe
custody, the banker acts as trustee of
customer.

9. AGENT AND PRINCIPAL
R ELATIONSHIP
 Pawnee and pawner:
Pawn is a sort of bailment in which the goods are
delivered to another as a pawn, to be a security for
money borrowed. Thus a banker acts as a pawnee where
a customer delivers he goods to him to be kept as
security till the debt is discharged. The banker can retain
the goods pledged till the debt is paid.
 Mortgagee and mortgagor:
He relation between a banker as mortgagee and his
customer as mortgagor arises when the latter executes a
mortgage deed in respect of his immovable property in
favour of the bank or deposits the title deeds of his
property with the bank to create an equitable mortgage
as security for an advance

10. AGENT AND PRINCIPAL
R ELATIONSHIP
 Bailer and Bailment:
During certain circumstances banker becomes
bailee. When he receives gold ornaments and important
documents for safe custody he takes charge of it as
bailee and not trustee or agent. He cannot make use of
them as he is bound to return the identical articles on
demand.
 Lessee-Lessor:
When a customer hires a locker in the bank’s safe
deposit vault, the bank undertakes to take necessary
precaution for the safety of the articles in the locker.
The relation between the parties is that of a lessor and
lessee.

11. AGENT AND PRINCIPAL
R ELATIONSHIP
 Guarantor and guarantee:
A bank as guarantor gives guarantee to its customer by
issuing a ‘letter of credit’. It is a kind of credit facility to its
customer to facilitate international trade. A bank guarantee
contains an undertaking to pay the amount without any
demur on mere demand of the principal amount on the
ground for non-performance or breach of contract.
 Fiduciary relationship :
Every relation of trust and confidence is a
fiduciary relation. A banker who receives a customer’s
money is under a duty not to part with it which is
inconsistent with the customer’s fiduciary chracter
and duty.

12. THANK YOU…!!