Author Name:   bhardwaj shivam

legal and contractual relationship between banks and customer as per RBI guidelines

There are numerous kinds of relationship between the bank and the customer. The relationship between a banker and a customer depends on the type of transaction; provided by a bank to its customers or availed by the customer. The opening of an account with the banker, and the banker’s acceptance of such opening of account gives rise to a ‘contractual relationship’. Thus, the relationship between a banker and customer is a ‘Commercial Transactional’ relationship. It is the foundation on which mutual duties, liabilities and privileges are being built. The legal relationship between a bank and its customer differs in several important respects like that of debtor-creditor, agent-principal, pledger-pledgee, licensor-licensee, bailor-bailee, trustee-beneficiary etc. At its essence, interactions between a customer and a bank can be broken down as actions of borrowing and lending money – despite the use of complex jargon. In Foley v Hill [1], contractual relationships can be seen through the prism of debtor and creditor. Of course, the relationship between a customer and institution has evolved and so has the refinement of the contractual relationship.

 

ISBN No: 978-81-928510-1-3
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