Banker–Customer Relationship and Customer Services
This domain examines the legal relationship between banker and customer, the bank’s duties and rights, and the service and grievance-redress standards expected in branches.
Relationship types
When a customer deposits money, the bank is a debtor and the customer a creditor; for a loan, the roles reverse. The bank may act as trustee, bailee, agent or lessor. A safe-deposit locker is a lease of space, not a bailment of the contents; the bank is not liable for loss unless negligence is proved.
Duties
The bank must honour cheques drawn within the available balance and properly drawn, maintain secrecy of account information, and follow the customer’s standing instructions. Secrecy is not absolute: disclosure is permitted to the RBI, courts, tax authorities, with customer consent, or in the public interest.
Rights
The bank has a right of set-off between mutual debts that are due, a banker’s lien on securities, the right to appropriate payments, and the right to attach a customer’s account under a garnishee order.
Services and redress
Services include passbooks, cheque books, statements, remittances, nomination and standing instructions. Complaints are handled under the RBI Integrated Ombudsman Scheme, 2021.
Worked example
A customer has a fixed deposit of ₹1 lakh and an overdue loan of ₹40,000. The bank may set off the deposit against the loan because both are due and the parties are the same. It cannot use a joint account to set off a sole borrower’s debt without authority, because the account holder and the debtor are not the same person.
Traps
Bank secrecy is not absolute. A locker is not a deposit and the bank is not an insurer of its contents. A bank cannot unilaterally close an account without following due process. A person with only a locker may not be a customer for all purposes.