1. Banking Law
Commercial Law

2. Duties of banker & customer
Definition of banking – Accepting for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdrawals by check, draft, order or otherwise.

3. Duties of banker & customer
As Debtor & Creditor
When a customer deposits money with a bank, their relationship is that the bank becomes the debtor and the customer becomes the creditor.
The customer expects from the bank that his money will be kept safe by the bank and will be returned on demand within business hours.
The position is reversed if the was advanced with a loan. Here the banker becomes creditors and customer becomes debtors.

4. Duties of banker & customer
Principal & Agent
The customer becomes principal when he deposits cheques, drafts, dividends for collection with the bank.
As principal, the customer gives written instruction to the bank to purchase securities, pay insurance premium, installments of loans etc. on his behalf.
The bank becomes an agent by performing the services.

5. Duties of banker & customer
Bailor & Bailee
A bailment is a delivery of goods in trust. A bank may accept the valuables of his customer such as jewelries, prized documents, valuable items etc. for safe custody.
In such circumstances, the banker is the Bailee and the customer becomes the Bailor.

6. Duties of banker & customer
Pawner & Pawnee
When a customer pledge goods and documents as security for an advance, he then becomes Pawner and the bank becomes the Pawnee.
The pledged goods are to be returned to the Pawner after the debt is repaid.

7. Rights of Customer A customer has the rights to:
Draw cheque on his account up to the extent of his credit balance or according to overdrawing limit as allowed by the bank.
Right to interest.

8. Duties of Customer The customer has the following duties which are:
To take reasonable care in drawing cheques
To disclose forgeries once he is aware of it. A customer must keep safe the cheque book issued by the bank.
In cases of theft or loss of the cheque book, to report the matter immediately to the bank.

9. Rights of Bank Bank has the right:
To receive money and collect cheques for his customer account.
To honor cheques and not to pay without a valid authority, provided a cheque is properly drawn, the customer still have balance to his credit, no legal restriction against the customer’s funds.
To set off – it is the right of the banker to adjust outstanding loans in the name of the customer from his credit balance of any of the accounts maintained by the bank.
To charge interest, commission etc. It is the right of the banker to charge interest according to the rates of services rendered.
To service charges.

10. Duties of Bank Bank have duties to:
Abide to the standing orders made by the customer in making scheduled payments on his behalf.
Keep secrecy of the customer’s account. The bank owes a contractual obligation not to disclose the customer’s financial information without his consent. However this obligation is not considered essential when:
A banker is required to give evidence in court
National emergency and public interest
Treason against State
Consent is given by customer

11. Conclusion Banking Law
Banking law revolves around the relationship between the customer and the bank.
As a financial institution, the bank enjoys the rights but is subjected to the duties as imposed upon it by the law.
The same goes to the customer, with his own sets of rights and duties.