RELATIONSHIP BETWEEN BANKER AND CUSTOMER
The relationship between a banker and a customer depended on the following
1) Activities
2) Products
3) Services
given by banks to its customers.
Banker and Customer relationship is a transactional relationship.
Bank’s business totally depended on the strong bondage with the customer.
Trust is a most crucial and important role in building healthy relationship between a banker and customer.
BANKER DEFINATION
Banker definition not defined by The Banking Regulations Act (B R Act) 1949.
Its only defines what is banking?
In simple words banking means accepting the deposit and giving loans. As per Banking regulation act 1949 defines banking in Sec.5 (b) “Banking' means accepting, for the purpose of lending or investment, of deposits of money from the public repayable on demand and withdrawn by cheque and demand draft, order or otherwise."
As per the Indian Negotiable Instruments Act 1881 banking in the Section 3 the word
The Banking Regulations Act (B R Act) 1949 defines in sec 5(b)
1) "Banking company" as a company that transacts the banking business in India.
2) Banking company Accepts deposits from public (Customers)
3) Lending in the form of giving loans.
4) Invests the money collected by the public in way of deposits.
5) Allowing withdrawals on demand of public deposits.
CUSTOMER DEFINATION
Any act does not define the term Customer.
Customer word derived from the word “custom”.
In simple words Custom means a habit or to de certain thing on a regular basis.
The Negotiable Instrument Act 1881, in sec 131 when a banker receives payment of a crossed cheque in good faith and without negligence for a customer, the bank does not have any liability to the true owner of the cheque by reason only of having received such payment.
Its means that to become a customer account relationship is must. Account relationship is a contractual relationship.
It is believed that any individual or any organisation, which conducts banking transactions with a bank, is the customer of bank. However, there are many persons who do uses services of banks, but do not maintain any account with the bank.
Bank customers can be divided in to four categories.
1) One who maintain account relationship with banks. (Existing customers)
2) One who had account relationship with banks (Old customers)
3) One who do not maintain any account relationship with the bank but frequently
visiting the branch of a bank for availing banking facilities such as for purchasing a demand draft, encashing a cheque.
4) Prospective and Potential customers.
The practice followed by banks in the past was that for opening account there has to be start deposit in cash. However the condition of staring deposit is cash deposit for opening the account appears to have been dispensed with the opening of ‘No Frill’ account by banks as per directives of Reserve Bank of India. ‘No Frill’ accounts are opened with no balance.
The term 'customer' is only used in respect to the branch, where the account is maintained.
Customer cannot be treated as a ‘customer' for other branches of the same bank.
However there the implementation of’ ‘Core Banking Solution’ the customer is the customer of the bank and not of a particular branch as he can operate his account from any branch of the bank and from anywhere.
‘Know Your Customer’ Guidelines and Customer:
Reserve Bank of India issued Know Your Customer’ guidelines which defines
1) A person or entity which maintains an account or it has a business relationship with bank.
2) The beneficial owner on whose behalf the account is maintained.
3) Beneficiaries of transactions conducted by
Professional intermediaries.
Stock Brokers.
Chartered Accountants etc. as permitted under the law.