1. Revise Lecture 26

2. Lecture 26
Banker and Customer

3. Banker and Customer The Banker
The role of a banker is one filled with multiple duties and responsibilities.
There are different types of bankers and each one is unique in his own way.
Some of these individuals work for large corporate conglomerates while others work for small town financial institutions.

4. Banker and Customer The Banker
Each banker has his own set agenda in his role as a banker.
A banker is an individual (or an institution) who advises his clients with regard to financial matter.
The duties concerning saving, loans, taxes, investment and securities are all within the job realm of a banker.

5. Banker and Customer The Banker
He will provide financial assistance to the client in accordance with their needs.

6. Banker and Customer
The Customer

7. Banker and Customer The Customer
In banking, a customer is someone who makes use of or receive the services of the bank.
The word customer historically derives ‘custom’ meaning habbit, so a customer was someone who frequented a particular shop, who made it a habbit to purchase goods there

8. Banker and Customer
Duties of a Customer All banks carry out the customer’s instructions in a business-like manner. In return, the customer has special duties of cooperation and other duties of care. A customer is bound to the following;

9. Banker and Customer Duties of a Customer
Communication of important information and changes.
Unambiguous information in orders and instructions
Care in transmission of particular orders

10. Banker and Customer Duties of a Customer 4. Use of forms
5. Express notification of any special instruction
6. Notification of time limits and dates
7. Complaints to be made immediately
8. Checking of confirmation of the bank
9. Liability arising from neglect of duty

11. Banker and Customer
Banker’s obligation to protect customer secrecy

12. Banker and Customer
The obligation of a banker to observe secrecy relating to affairs of his customers is an implied term of the contract between a banker and his customer.
A banker would not divulge to third persons, without the consent of the customer, express or implied, either the state of the customer’s account or any of his transactions with the bank.

13. Banker and Customer
Banker’s right to charge interest and commission

14. Banker and Customer Banker’s right to charge interest and commission
The bank generates its profits from the differential between the level of interest it pays for deposits and other sources of funds, and the level of interest it charges in its lending activities.
All banks at any time and form time to time are entitled to charge the rate of interest on loan either by express agreement or right of custom or usage of trade.

15. Banker and Customer
Banker’s right to charge interest and commission
They also entitled to charge compound interest and commission for services rendered to the customer.
In the absence of an express agreement or without due notice, a bank is not allowed to debit charges at any date other than the customary dates.

16. Banker’s Right to Lien

17. Banker and Customer Banker’s Right to Lien
A lien is the right of a creditor in possession of goods, securities or any other assets belonging to the debtor to retain them until the debt is repaid, provided that there is no contract express or implied, to the contrary.

18. Banker and Customer Banker’s Right to Lien
Lien is, in its primary sense, a right in one man to retain that which is in his possession belonging to another until certain demands of the person in possession are satisfied.
In its primary sense, it is given by law and not by contract.

19. Banker and Customer Banker’s Right to Lien
A banker’s lien on negotiable securities has been judicially defined as ‘ an implied pledge’.
A banker has, in the absence of agreement to the contrary, a lien on all bills received from a customer in the ordinary course of banking business in respect of any balance that may be due from such customer.

20. Banker’s right of set-off

21. Banker and Customer Banker’s right of set-off
The of right of set-off is also known as the right of combination of accounts.
A bank has a right to set-off a debt owing to a customer against a debt due from him.
‘A legal set-off is where there are mutual debts between the plaintiff and the defendant, or if either party sue or be sued as executor or administrator, one debt may be set against the other’.

22. Banker and Customer Banker’s right of set-off
From a commercial standpoint, a right of set-off is a form of security (right) for a lender.
It is an attractive security because its realization does not involve the sale of an asset to a third party.
A set-off must be in the form of a cross claim for a liquidated amount, and it can be pleaded only in respect of a liquidated claim.

23. Deposit Account

24. Banker and Customer Deposit Account
The main banking activities consist of acceptance of deposit from the public for the purpose of lending to businessmen and others who may seek loans.
Actually, the money deposited in any bank is mostly the saving of the people.
Money may be needed in future for various purposes such as medical treatment, marriages and for other events.

25. Banker and Customer Deposit Account
So people keep their savings with someone where it will both be safe and earn a return.
A bank is a such place where money once deposited remains safe and also earns profit.

26. Types of deposit account

27. Banker and Customer Types of deposit account
Bank deposits serve different purposes for different people.
Some people cannot save regularly, they deposit money in the bank only when they have extra income.
Some, mostly businessmen, deposit all their income from sales in a bank account and pay all business expenses out of the deposits.

28. Banker and Customer Types of deposit account
Keeping in view these differences, banks offer the people the facility of opening different types of deposit accounts to suit their purpose and convenience.

29. Types of deposit account
Accordingly, bank deposit accounts may be classified as;
Savings bank account
Current deposit account
Fixed deposit account
Recurring deposit account
Salary account

30. Withdrawal from deposit account

31. Banker and Customer Withdrawal from deposit account
Customer deposit his savings for use in future.
The need for money may arise any time. So customer should know how to get back your money from the bank.

32. Banker and Customer Withdrawal from deposit account
Money can be withdrawn by using;
Withdrawal form
Cheque
ATM card

33. Lecture 27
Types of Accounts Holders

34. Types of Accounts Holders
Banks are custodians of public money.
Basically, the money is accepted as deposit for safe keeping.
A bank account is a monetary account with a banking institution recording the balance of money for a customer.

35. Types of Accounts Holders
Opening an account is the most common and the first service of the banking sector.
There are different types of bank accounts in the Pakistan banking sector;
Bank savings account
Bank current account
Bank term deposits account
Bank online account

36. Types of Accounts Holders
While opening an account, the banker should provide the customer with details of various types of accounts that he may open with the bank.
The customer can have his choice on what type of account would best suit him, based on his needs and requirements.

37. Types of Accounts Holders
The banker should, prior to opening an account, require documentation and information as prescribed by the Know Your Customer (KYC) guidelines issued by SBP and such other norms or procedures adopted by the bank.

38. Types of Accounts Holders
The due diligence process that the banker should follow will involve providing documentation verifying the customer’s identity, address, and information on his occupation or business and source of funds.
A part of the due diligence process, the bank may also require an introduction from a person acceptable to the banker if they so deem necessary, and may need the customer’s recent photographs.

39. Types of Accounts Holders
The bank reserves the right, at its sole discretion, to open any account and, at such terms, as the bank may prescribe from time to time.
A bank has to deal with different types of account holders which are the following;

40. Types of Accounts Holders
Individual
Joint account holders
Illiterates
Minors
Married women
Non-resident accounts
Sole proprietorship
Partnership firms

41. Types of Accounts Holders
9. Joint stock company
10. Clubs, Associations and Societies
11. Trusts
12. Government departments
13. Local authorities

42. Types of Accounts Holders
Payment of Pension

43. Types of Accounts Holders
Payment of Pension
Banks make pension payments on behalf of the government to the retired employees of Central and State Governments, Defence services, Railways and others.
All prnsion payments are subject to rules and procedures prescribed by the government, SBP and concerned departments / organizations from time to time.

44. Types of Accounts Holders
Payment of Pension
A pensioner can open an account with cheque book facility and also give nomination in his pension account.
Once the account is opened, no credit other than pension is permitted in the account.
Pension accounts are allowed 50% concession in minimum balance requirements as well as in service charges.

45. Types of Accounts Holders
Payment of Pension
If the family pensioner is a widow, at the time of first payment of pension, a certificate to the effect that she has not re-married and an undertaking to the effect that if she re-married later, she will intimate the fact promptly to the pension-paying branch is required.

46. Types of Accounts Holders
Payment of Pension
The pension usually credited by the branch to the pensioner’s saving or current account during the last four working days of the month.
Income tax at the prescribed rate is deducted from the pension amount, and net amount is payable to the pensioner’s account.