There have to be a relation more than transactional banking between Banker and the Customer. Just check the detailed relationship between Bankers and the Customers in different scenarios…
The customer opening an account with the banker and agreeing with the terms of account creation does give rise to Contractual Relationship with Banker. The relation between and Banker Customer is generally termed as Commercial Transaction, which arose due to mutual duties, liabilities, privileges and service offered.
In these terms of relationship there are few different points which can be clear. Here the customer can be a single party or group of people or an entity or a firm which brings ahead their requirements and gets an account created. Banker will be a single entity which offers financial services to all around the clock.
Also read: Private Banks in India
Relationship between Banker and Customer
Through the different scenarios below, you can learn how both bankers and customers correlate to each other in the world of finance and banking. This might be helpful as you would learn more about these types of relationship between banker and customer like you to get some real life understanding from this article.
Debtor Creditor Relationship:
When a customer makes spite of funds in their account they are referred as Debtor and the bank here becomes creditor. Here the customer becomes Lender and the Bank becomes borrower, which is termed as Debtor and Creditor relation. In the same points, if a customer tries to deposit money from his account through Cheque or by any means, then the Banker becomes the depositor and the Customer becomes the creditor.
Bank as an Agent:
Banker acts as a Standing Instruction of the customers, as they pay insurance premium, electricity Bill Taxes as enrolled with the bank. As well they collect interest on investments, Dividends on shares and do collect cheques from customers. Banker as providing these all services does act as an Agent and then the customer who receives them acts as a Principal. Thus the relationship between Banker and Customer is like Agent and Principal for the services offered.
Customer Demanding payment:
Under maturity the creditor does become liable for the debt aroused. As the Banker who is a debtor has to make payment of the amount of maturity to the Creditor who is a customer on due date. The customer demands the amount written to the Banker, which is to pay without any delay.
Banker as Bailee:
Under the Indian Contract Act Sec 148, the Delivery of Goods by any person to another for a purpose with a Contract, shall retain when the purpose accomplished or deposited off on directions of person. As a customer leaves their amount or some valuable items in the bank, then the Banker becomes Bailee. They entitled to have their value items in the Bank until the agreement term of maturity or conditions, these should returned to the real owner who the customer, when their term reaches.
Banker as Trustee:
The relation between two persons becomes a trust. When one person holds property vested in him on behalf of another for a period. As a customer deposits security deposit for any financial transaction with the Bank, then Banker becomes Trustee of the customer. These items not used by Banker anytime. As they are only entitled to keep hold and return back to customers once their requirement met.
Time and Place of Demand:
Creditor demand must done at proper place and place time. The commercial branch has numerous branches and demand for money from customers has to make at their home branch. But not in any other branch, which must be also during business hours.
Bank as an Executor:
In case customer appoints banker as their Executor by leaving property as deposit for any loan taken or under deposit. Then if it is written under will then, the executor will hand over the property to the deceased heirs. Else the law permits Bank to act as an executor while distributing property to all heirs as per the law.
Banker as Attorney:
In certain conditions, Banker may appointed as Attorney by the customer and in that point. The banker will play full role as an attorney with proper authority.
Banker has Right to Combine Accounts:
If any customer has two or more accounts within Bank, then Bank has authority to combine these accounts as one. Bankers being the authority of holding of accounts, can combine these accounts.
Banker has no Right to Close Account:
If a customer is not using the account or has excess deposits. Then Banker has authority to close the account at any time without any permission from the customer.
Also read: Foreign Banks in India for International Banking
What is the main difference between Banker and Customer?
Banker is the one who serves or behave as a agent to provide the banking services easily to the customers. Customer is the one who gets the benefits of that services and acts as beneficiary.
What are the different types of Customers in Banking?
There are many types of customers that separated according to their literacy, marital status, account types and their availing services in the bank like Loan, Savings, Locker security and many more.