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Banker-Customer Relationship Explained

The document discusses the relationship between bankers and customers, outlining several key aspects: - Bankers have a duty to honor customer checks, maintain account secrecy, and not close accounts without consent. They also have rights like liens, set-off, appropriation of payments, and claiming interest. - A garnishee order allows a creditor to attach a debtor's property held by a third party, like funds in a bank account. It warns the third party like a banker to freeze the debtor's deposits. There are preliminary (order nisi) and final (order absolute) types of garnishee orders issued by courts.

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Siva Sankari
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180 views15 pages

Banker-Customer Relationship Explained

The document discusses the relationship between bankers and customers, outlining several key aspects: - Bankers have a duty to honor customer checks, maintain account secrecy, and not close accounts without consent. They also have rights like liens, set-off, appropriation of payments, and claiming interest. - A garnishee order allows a creditor to attach a debtor's property held by a third party, like funds in a bank account. It warns the third party like a banker to freeze the debtor's deposits. There are preliminary (order nisi) and final (order absolute) types of garnishee orders issued by courts.

Uploaded by

Siva Sankari
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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General Relationship Between Banker and

Customer
• Relationship of Debtor and Creditor.
• Relationship of Trustee and Beneficiary.
• Relationship of Agent and Principal.
• Relationship of Bailer and Bailee.
• Relationship of Assigner and Assignee.
Special features of relationship or rights and
obligations between Banker and Customer.
• Duty to honour the cheques drawn by the customer.
• Duty to maintain the secrecy of the Account.
• Duty not to close the Customer’s Account without his
consent.
• Banker’s Right of General lien.
• Banker’s Right of set off.
• Banker’s Right of Appropriation of Payments.
• Banker’s Right to claim The Incidental charges.
• Banker’s Right to claim The Interest.
• Banker’s and the Law of Limitation.
• Debtor owes some money to his creditor and if he fails to pay
the amount, the latter may file a suit against the debtor and
he may get a decree from the court for payment of his debt.
• Sometimes creditor may not get any property from the
debtor for execution of his decree, but there may be some
person who is having the debtor’s property. In this situation,
the creditor may request the court to issue an order so as to
attach the debtor’s property which is in the hands of third
party.
• If court issues an order, such an order is called “garnishee
order”.
• Since banker is also a third party who is always
keeping customer money, court may also issue
an order to the banker to freeze the
customer’s deposits in his hand. He must obey
for the order.
• The word “garnishee” is derived from a Latin
word “Garnir” which means to warn the third
party. Thus, it is a warning to the third party
with regard to property of others in his hand;
it is called as garnishee order.
• There are some parties to this order. Judgement debtor
is a person against whom the court issues a decree to
pay the money to his creditor.
• Judgement creditor is another person whose favour the
decree is issued.
• The banker to whom this order is directed to stop the
operation of the customer’s account is called ‘garnishee’.
• The order issued by the court is of two kinds namely (1)
order NISI or preliminary order (2) order Absolute or
Final order.
• Order NISI:
• It is a preliminary order issued to the banker,
– To stop the payment over the customer account
– To give explanation why the judgement debtors
credit balance in his account should not be use for
the purpose of payment of the judgement creditor
and
– It is also a duty of the banker to inform the same
to his customer.

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