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    Banker and Customer

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    basalingoluma

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    Banker and Customer

    Uploaded by

    basalingoluma
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    Copyright:

    © All Rights Reserved
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    Download as pptx, pdf, or txt
    7 views8 pages

    Banker and Customer

    Uploaded by

    basalingoluma

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 8

    Module - 2

    Banker and Customer


    Banker and customer relationship
    • Who is banker?
     The B R Act 1949 does no defined the term banker, but defines what is
    banking.
     As per section 5(b) of B R Act 1949 the term ‘Banking’ means, “accepting for
    the purpose of lending or investment of deposits of money from the public
    repayable on demand or otherwise and withdrawal by cheque, draft, order or
    otherwise.”

    • Who is customer?
     The term customer is not defined by law. In general a person or a entity that
    maintains account and/or has a business relationship with the bank.
     The relationship of banker and customer begins as soon as the first cheque is
    paid and accepted.
    Introduction:
     Nature of services defines the relationship.

     Core banking business of the bank.

     Other services like,


    Discounting of
    bill
    Project Remittances
    appraisal

    Safe custody
    Factoring
    and lockers
    Bank Foreign
    Security exchange and
    trading Govt
    transaction

    Collection of
    bill and cheque Sale of 3rd LC
    party product
    Different types of Relationship of Banker and Customer
    Transaction Bank Customer
    Deposit in the bank Debtor Creditor
    Loan from bank Creditor Debtor
    Safe custody Bailee Bailor
    Locker Lessor Lessee
    Collection of cheque Agent Principal
    Purchase of draft Debtor Creditor
    Payee of draft Trustee Beneficiary
    Pledge Pawner/Pledgee Pawnee/Pledger
    Mortgage Mortgagee Mortgagor
    Standing instruction Agent Principal
    Sale/purchase of security on behalf of customer Agent Principal
    Money deposited but instructions not given for Trustee Beneficiary
    disposal
    Articles left by mistake Trustee Beneficiary
    Hypothication Hypothecatee Hypothecator
    Bankers obligation to customer
    1. Obligation to honour cheques.
    2. Obligation to maintain secrecy.
    3. Obligation to follow customers.
    4. Obligation to maintain paper record.
    5. Obligation to give notice before closing account.

    Rights of bank
    6. Right of lien
    7. Right of set-off
    8. Right of appropriation
    9. Right to charge interest and commission
    10. Right to close the account
    Banker Legal Duty of Disclosure and Related Matter
    (Exception to duty of secrecy)

    o Disclosure is under compulsion of law.

    o Where there is a duty to the public to disclose

    o Where the interest of bank requires disclosure

    o Where the disclosure is made by express or implied consent of the


    customer
    KYC Norms
    • What is KYC?
    RBI has advised banks to make the KYC (Know Your Customer)
    procedure mandatory while oening and operating the accounts and
    has issued KYC guidelines under section35(A) of B R Act 1949.

    • What KYC means?


    1. Customer
    2. Your? (Who should know?)
    3. Know? (What you should know?)
    Individual
    A/c

    Personal Account Joint A/c

    Minor A/c

    HUF

    Types of Accounts Partnership firm

    Ltd Companies

    Trusts
    Accounts of other
    customer Co-operative
    society
    Govt and public
    bodies
    Executors and
    Administration

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