Duties or obligations of a banker towards the customer
(1) To honor a customer’s cheque. The banker is to honor the cheques of the customers provided the cheques are:
(i) Properly drawn.
(ii) The customer has balances to his credit.
(iii) The loan contract has been signed.
(iv) There is no legal bar or restriction attaching to the customer’s funds.
(2) Standing Orders. It is the duty of the bank to abide by the standing orders of the customers in making periodical payments on his behalf such as club, library, insurance premiums, etc.
(3) Secrecy of the Customer’s Account. The bank owes a contractual duty not to disclose the customer’s financial position without his consent.
However, the obligation of secrecy is not considered essential on the following occasions:-
(1) When a banker is required to give evidence in the Court.
(2) When there is national emergency and disclosure is essential in the public interest.
(3) When there are clear proofs of treason to the State.
(4) When a consent is given by the customer to provide information for the preparation of balance sheet.
(4) Garnishee Order. (Order of the Court). If is the duty of the banker to abide by the order of the court (called garnishee order) and attach the funds of the customer to the creditor who has obtained the order in his favor.
Rights of a banker:
(i) Right to set off. It is a right of the banker to adjust his outstanding Joan (debit) in the name of the customer from his credit balance of any of the accounts he s maintaining with the bank.
(ii) Right to chargé interests commission etc. If is t right of the banker to charge interest, commission etc according the prevalent rates for the services the banker has’ rendered to the customer as agent, trustee, bailee etc.
(iii) Right to lien. A banker has the right to retain the property belonging to the customer until the debt due from him has been paid.
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