A BANKERS SPECIAL RELATIONSHIP
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Principles and Practices of Banking — JAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is the special relationship between a banker and customer primarily based on?
The relationship between a banker and customer is primarily based on a contract, whereby the banker agrees to accept deposits and repay on demand or as otherwise agreed, creating a debtor-creditor relationship.
What is the legal nature of the relationship between a bank and a depositor?
Debtor-creditor relationship; bank owes money to depositor.
When does the relationship of banker and customer formally commence?
The relationship commences when the bank opens an account in the customer's name and the customer makes the first deposit, establishing a legally recognised contractual relationship.
What is the position of a bank when a customer takes a loan?
Bank becomes creditor and customer becomes debtor.
In the banker-customer relationship, who is the debtor and who is the creditor when a deposit is made?
When a customer deposits money, the bank becomes the debtor and the customer becomes the creditor, as the bank owes the money back to the customer.
What special relationship does a banker acquire when acting as an agent for a customer?
Principal-agent relationship where banker executes customer instructions.
What is the nature of a banker's obligation to repay a customer's deposit?
A banker's obligation to repay is not automatic; the customer must make a demand at the branch where the account is held during banking hours, and the bank is bound to repay on such demand.
Under what legal principle does a bank hold securities pledged by a customer?
Bank holds pledged securities as a secured creditor (bailee).
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