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“A customer is a person who has some sort of account, either fixed or current account or some other relationship with a banker.”


“Any person may become a customer as soon as he opens an account with the bank.”



Legal Requirements to be qualified as Customer:

· Customer should be a major
· Customer be of sound mind
· He should not be debarred under any law
· There must be an offer and acceptance of the proposal.

Things to be noted:
· A single transaction can constitute a customer
· Every customer should have an account
· There should be some frequency in transactions
· All the dealing must be of banking nature
· The customer can be a person, a company, a society or a legal entity.


General Relationship between the Banker and Customer

Principal and Agent:

The customer is principal and the banker is the agent, when he collects cheques, bills of exchange, drafts, dividends and buys & sells stock and shares on behalf of his customer.

Mortgager & Mortgagee:

When loan is taken against immovable property ( land and building) the relationship is created that of mortgager and mortgagee. The customer is mortgagor and banks as mortgagee.

Pledger &Pledgee:

When the customer pledges movable property with the banker as security for loan, he becomes the pledger and the banker as pledge.

This relationship is also known as pawnor & pawnee.

Bailor & Bailee:

The bank accepts valuables for safe custody from the customer. In this case customer is bailor and the banker as bailee.

Financer & Finance:

When bank advises his client on any important financial matters, bank becomes advisor and client becomes advisee.

Advisor & Advisee:

When bank advises his client on any important financial matters, bank becomes advisor and client becomes advisee.

Assignor & Assignee:

When any obligation or property is assigned to the bank then the bank becomes assignee and client becomes assignor.

Principle Debtors & Surety (guarantor):

If bank provides guarantee for its customer to a third party then the bank is called surety and the customer is called the principal debtor.

Indemnifier and indemnity holder:

“Indemnity is a contract where one party promises to save the other party from the loss caused to him by the conduct of the promisor himself or by the conduct of any other person.”

When the bank makes a contract of indemnity with the customer, bank becomes indemnifier and customer becomes indemnity holder.

Reference and Referee:

When bank informs the state bank or any other authority about the financial status of a customer, bank is called referee and customer is called reference.

Modarib and Aamal:

When a banker provides finance to customer under the agreement of modaraba the relationship becomes that of modarib and aamal. The banker being modarib and the customer aamal.

Cordial relationship between Banker & Customer:

Sometimes the banker is in a position to established cordial relation with this customer by providing reliable and confidential information about the general standing of the people.

Purchaser and Seller:

Under deferred payment sale on mark up mode of financing. The banker is the seller of the goods financed and the customer is the purchaser of the same.




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