What is a Banking?
Banking means the accepting, for the purpose of lending or investment, of deposits of money from public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise Any company doing banking business on these lines will be termed as a bank and individuals involved are the bankers.
When a person gives goods to some one for some purpose. When banks provide safe custody facility to customers to keep their valuable belongings. Customer is bailor and bank is bailee
Qualification of a Customer.
He should not be a minor. He should be a person of a sound mind (he understands the contract at the time of making it). He shall not have been debarred from entering into any contract under any law. He deposits money and bank accepts it.
RIGHTS.
To draw cheque against his credit balance. To get passbook, cheque book, and periodic accounts statement. To make bank liable to correct any over crediting or over debiting. To sue the bank for the cost, loss, and damages when his cheque is wrongfully dishonored. To sue the bank if the secrecy of his account was not maintained.
Lien
Right to Lien.
1. 2. 3. 4.
Lien means right to retain the property belonging to another until the debt due from the latter has been paid Bank has a right of Lien on any kind of securities deposited by the customer. Following conditions do apply for exercising right of Lien: The property of the customer must come into the hands of the banker. There should not be any entrustment for special purpose. Banker should obtain possession lawfully. There should be no agreement inconsistent with the right of Lien.
Bankers duty
The Bankers duty of Secrecy.
The banker customer relation is a confidential agreement/contract so it is the duty of the banker not to disclose any kind of information to third party who so ever he/she may be. It include both personal information and the information of the status of the account.
Disclosure
1. 2. 3. 4. 5. Banks can disclose information in the following cases. Under Compulsion of Law. Duty to public to disclose. In the Interest of the bank. Express or Implied Consent of the customer. Common courtesy to the other banks.
Termination of Relationship.
Since banker-customer relationship is a contractual one, it may be terminated by any one of the two by serving a notice to other. Notice by the customer. The following are reasons when customer serves notices to the bank for termination of the contract.
Termination of relationship
1. 2. 3. 4. Due to the change in residence. Unsatisfactory services by the bank. Death of the customer. Shifting of account to the other branch/bank. 5. Changing of account nature. 6. To close accounts for special purposes like salary accounts.