PAPER II – PRINCIPLES & PRACTICES OF BANKING: MODULE A: GENERAL BANKING OPERATIONS | Banker-Customer Relationship Notes & MCQs
Banker-Customer Relationship and Banking Services Requirements to be Called a Bank Acceptance of deposits from the public for the purpose of lending or investment. Repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise. Must be licensed by the Reserve Bank of India (RBI) under the Banking Regulation Act, 1949. Banker-Customer Relationship Primarily a debtor-creditor relationship when a customer deposits money. Becomes a creditor-debtor relationship when a customer takes a loan. May also include relationships like trustee-beneficiary, agent-principal, etc. Bank as a Trustee The bank acts as a trustee when it holds securities or funds on behalf of a customer, managing them according to the terms of the trust. Bailee-Bailor Relationship Occurs when a customer gives valuables for safe custody; the bank (bailee) is responsible for their safekeeping and return. Agent-Pr...