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 known as?
The relationship between a banker and customer is primarily that of a debtor and creditor, with the banker acting as debtor when accepting deposits and creditor when granting loans.
What is the primary legal nature of the debtor-creditor relationship in banking?
Bank borrows deposited money and repays it on demand.
When does the banker-customer relationship begin?
The banker-customer relationship begins when the bank opens an account for the customer and the first transaction is completed, establishing a contractual relationship.
Which landmark case established that the bank is a debtor to the depositor?
Foley v. Hill (1848) established bank as debtor to depositor.
What is the nature of the relationship when a customer deposits money in a bank?
When a customer deposits money, the bank becomes a debtor and the customer becomes a creditor; the bank is not a trustee or bailee of the deposited funds.
What is the nature of the relationship when a customer opens a fixed deposit account?
Bank is debtor; customer is creditor with a time-bound claim.
What additional relationship arises when a bank grants a loan to a customer?
When a bank grants a loan, the relationship reverses — the bank becomes the creditor and the customer becomes the debtor, obligated to repay the principal and interest.
What special relationship arises when a bank collects a cheque on behalf of a customer?
Bank acts as agent of the customer for cheque collection.
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