BANKER's CUSTOMER 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.
Who is considered a 'customer' of a bank for legal purposes?
A person who has an account with the bank or avails banking services habitually; even a single transaction can establish the relationship if it is of a banking nature.
What is the relationship between a bank and customer when the bank collects cheques on behalf of the customer?
Bank acts as an agent of the customer.
What is the primary legal relationship between a banker and a customer when a deposit is made?
The relationship is that of debtor and creditor, where the bank is the debtor and the customer is the creditor, since the bank borrows money from the customer.
What type of relationship exists between a bank and customer in a locker facility?
Banker is a licensor and customer is a licensee.
What relationship exists between a banker and customer when the bank grants a loan?
When a bank grants a loan, the relationship reverses: the customer becomes the debtor and the bank becomes the creditor.
What is the relationship when a bank issues a draft on behalf of a customer?
Bank acts as debtor of the payee, agent of customer.
What is the nature of the relationship between a bank and its customer when the bank holds valuables in safe custody?
The relationship is that of bailee and bailor, where the bank (bailee) holds the valuables on behalf of the customer (bailor) and must return them on demand.
What special feature distinguishes a bank customer from an ordinary debtor?
Customer can demand repayment during banking hours at branch.
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