1.1 MEANING:-
As soon as as we open open an an account account in a bank or the the banker banker issue a draft or we deposit deposit our valuables in a bank, a relationship is created with the bank at that moment. However, the relationship relationshipss are not the same in all the cases. It means that for the differen differentt functions functions of banks, the nature of relationship between the banker and the customer varies. The The commercial banks, their functions, different types of banks and the role played by the banks in the economic development of a country. Now it will be appropriate to focus on the relationship that eists between the banker and the customer in providin! the different services to the customers. The word word customer means a person who has bank account in his name and for whom the the banker undertakes to provide the facilities, facilitie s, which are enormously provided by banks. It must also be remembered remembered that all customers customers do not re"uire all the services, services, i.e., an ordinary ordinary saver does not re"uire more sophisticated financial services but his bankin! needs are very much limited. #urther, a customer needs bankin! services in that area which he lives or works for his livelihood. Therefore, the aim of the banks should be to brin! new areas and new classes of people within their fold in order to tap potential deposits to optimum level by providin! wide ran!e of bankin! services to the needs of different classes and sectors of society and also by improvement in the "uality and efficiency of services. $fficiency and "uality can be maintained not necessarily throu!h automation alone but throu!h personal approach also. Thus in providin! all a ll these services, emphasis e mphasis should be laid on the "uality "uality of services services rather than the "uantity "uantity or variety of services. services. %anks should should try to understand understand the psycholo psycholo!y !y of their customers customers while while dealin! with with them. They They should should satisfy their customers customers well so that not only their relationship relationship with the banks may continue but it will also become beneficial and pay dividends in the form of attractin! new customers customers to the banks. banks. Thus, Thus, the relationship relationship between the banker banker and customer customer is not merely of debtors and creditors but it should also embrace the super added obli!ation on the part of banker to honour the customer&s need effectively and efficiently. The The function functionss and services services provi provided ded by bank bankss to their custo customer merss !ive rise rise to certain certain relationship between them, with the openin! of an account by the customer with a banker.the application application for openin! an account account is considered considered as aletter of a!reement a!reement for establishin! establishin! the banker-customer relationship. The application applica tion for openin! an account is considered as aletter of a!reement a!reement for establishin! establishin! the banker-cu banker-customer stomer relationship. relationship. 'eposits are lifelines lifelines of banks. The !eneral view is that the banker-customer relationship is mainly that of a debtor
and a creditor with certain special features.
However, today the ran!e of bankin! services is more etensive and indeed is epandin! all the time. (o it must be epected epected that other relationship relationshipss will arise besides that of debtor debtor and creditor. #or instance, the relationship of principal and a!ent is present when the customer instructs his bank to buy or sell stocks on his behalf and when items are held in safe-custody the relationship is that of bailer and bailee. )here the bank&s eecutorships service takes on the administration of a deceased&s estate, the relationship is that of trustee and beneficiary. 'uties akin to a trusteeship trustees hip mi!ht also happen when a branch comes in to t o possession of funds or property that belon! to a third party, as when the bank has sold property in mort!a!e and has a surplus surplus to pass pass to the subse" subse"uen uentt mort!a mort!a!e. !e. *bvio *bviously usly,, the relatio relationsh nship ip with with the customer in that situation is that of a mort!a!or with a mort!a!ee on the customer.
The roads to pro!ress and prosperity can easily be made throu!h friendly behavior with the customers. If the bankers wish to develop their or!ani+ational ima!e, they have to offer better services and cooperation, cooperation, coupled with courteous courteous service service to !ain a competitive competitive ed!e. (o the relationships depend on the nature of transaction and chan!es from customer to customer. A bank customer may be a creditor, a beneficiary and a bailor simultaneously when heshe deposi deposits ts money money,, remits remits money money by mail mail transfer transfer andor andor for!et for!etss a docume document nt in the bank bank inadvertentlynot for security of any loanadvances.
*ur primary concern will be to analyse the relationship that is created between a banker and a customer on different occasions.
This unit will be interestin! as you are !oin! to learn the different aspects of the relationships between the banker and the customer. %ankin! %ankin! is a trust-based trust-based relationship. relationship. There are numerous numerous kinds of relationship relationship between the bank and the customer. The relationship between a banker and a customer depends on the type type of transac transactio tion. n. Thus the relationsh relationship ip is based based on contract, contract, and on certain terms and conditions.
These relationships confer certain ri!hts and obli!ations both on the part of the banker and on the customer. customer. However, However, the personal personal relationship relationship between the bank and its customers is the lon! lon! lastin lastin! ! relatio relationsh nship. ip. (ome (ome banks banks even even say that they they have have !enerat !eneration ion-to -to-!e -!ener nerati ation on
and a creditor with certain special features.
However, today the ran!e of bankin! services is more etensive and indeed is epandin! all the time. (o it must be epected epected that other relationship relationshipss will arise besides that of debtor debtor and creditor. #or instance, the relationship of principal and a!ent is present when the customer instructs his bank to buy or sell stocks on his behalf and when items are held in safe-custody the relationship is that of bailer and bailee. )here the bank&s eecutorships service takes on the administration of a deceased&s estate, the relationship is that of trustee and beneficiary. 'uties akin to a trusteeship trustees hip mi!ht also happen when a branch comes in to t o possession of funds or property that belon! to a third party, as when the bank has sold property in mort!a!e and has a surplus surplus to pass pass to the subse" subse"uen uentt mort!a mort!a!e. !e. *bvio *bviously usly,, the relatio relationsh nship ip with with the customer in that situation is that of a mort!a!or with a mort!a!ee on the customer.
The roads to pro!ress and prosperity can easily be made throu!h friendly behavior with the customers. If the bankers wish to develop their or!ani+ational ima!e, they have to offer better services and cooperation, cooperation, coupled with courteous courteous service service to !ain a competitive competitive ed!e. (o the relationships depend on the nature of transaction and chan!es from customer to customer. A bank customer may be a creditor, a beneficiary and a bailor simultaneously when heshe deposi deposits ts money money,, remits remits money money by mail mail transfer transfer andor andor for!et for!etss a docume document nt in the bank bank inadvertentlynot for security of any loanadvances.
*ur primary concern will be to analyse the relationship that is created between a banker and a customer on different occasions.
This unit will be interestin! as you are !oin! to learn the different aspects of the relationships between the banker and the customer. %ankin! %ankin! is a trust-based trust-based relationship. relationship. There are numerous numerous kinds of relationship relationship between the bank and the customer. The relationship between a banker and a customer depends on the type type of transac transactio tion. n. Thus the relationsh relationship ip is based based on contract, contract, and on certain terms and conditions.
These relationships confer certain ri!hts and obli!ations both on the part of the banker and on the customer. customer. However, However, the personal personal relationship relationship between the bank and its customers is the lon! lon! lastin lastin! ! relatio relationsh nship. ip. (ome (ome banks banks even even say that they they have have !enerat !eneration ion-to -to-!e -!ener nerati ation on
bankin! relationship with their customers. The banker customer relationship is fiducial relationship. The terms and conditions !overnin! the relationship is not be leaked by the banker
to
a
third
party.
1.4 LIMITATION
%anker, businessman and even common man and women are dealin! with loans and advances. As the provisions of the limitation act,/012, a debt will become a bad debt after the epity of 2 years from the date of the debt. The implication is that the debtor need not le!ally pay the debt once 2 years are over provided there was no contract between the debtor and creditor. %ut the banker is eempted from the limitation act. Accordin! to Article /33 of the part II of the schedule to the limitation act /012, the period of limitation for the refund of bank deposits is 2 years with effect from the date of a customer makin! a demand for his money. (ec 31 of the bankin! re!ulation act, /040, has prescribed a period of /5 years to consider a bankin! debt as bad debt. In the case of fied deposit, a period of /5 years will be calculated from the date of epirin! of such fied deposit. This is an advanta!e to the customer. However, in the case of overdraft, the period of 2 years will commence from the date on which it is made use of by the customer. In the case of safe custody deposit, the law of limitation period commences from the date of demand.
The main problems is customer, services is to identify customers, epectations and devisin! ways and means of meetin! the reasonable ones. banker has no !eneral lien /
*n safe custody deposits.
3
*n securities or bills of echan!e entrusted for specific purpose.
2
*n articles lefty by mistake or ne!li!ence.
4
*n deposit account.
6
*n stolen bond.
1
7ntil due date of the loan.
8
*n trust account.
9
*n title deeds of immovable properties. $very times, a customer !oes to a banker and casts a vote of confidence in him or
her. It is now up to the banker to keep faith with him.
There may be certain amount of risk involved in some of the service epectations of customers, which can be reduced if the workin! of banks is based on trust, character and capacity of the customers and staff. ack of effective communication is also a ma;or problem.
There must be a two-way communication amon! customers, employees and will motivate them to render satisfactory services to the customer.
CHAPTER NO.2 REVIEW OF LITERATURE
The si!nificance of banks in modern market economies cannot be underestimated. ike any other economy, banks have a very crucial role to play in the functionin! of the markets.
plays an important role in buildin! healthy relationship between a banker and customer. 'r H. Hart, in the book, aw of %ankin! defines a bankbanker: As a person or company carryin! on the business of receivin! money and collectin! drafts for customers sub;ect to the obli!ation of honorin! che"ues drawn upon them from time to time by customers to the etent of the amount available on their current account. (ection 3 of the 7? %ill of $chan!e Act /993 provides that a banker is =a ny person whether corporate or not who carries on the business of bankin!=. (imilarly (ection 369 the interpretation section of the Ni!erian $vidence Act 35// defines %ank%anker to mean a bank licensed under the %anks and *ther #inancial Institutions Act @ap. %2#N. 3554 and includes anybody authori+ed under an enactment to carry on bankin! business. A person becomes a customer of a bank when he !oes to the bank and has an account opened in his name, the bank accepts the money or che"ue from him after which such a person becomes entitled to be called a customer of the bank. A customer is also any person havin! an account with a bank or for whom a bank has a!reed to collect items and it includes a bank havin! an account with another bank. This definition was held in the @ourt of Appeal case of *ku . %ani!o 3552 #)B Ct. /86. In Afribank Ni!eria Clc . Aminu Ishola Investment td 3553 8 N)B Ct. 816 45, it was held that the role or predominant business of bankers is the business of bankin! which consists mainly in the receipt of monies on current or deposit account and the payment of che"ues issued by a customer. Therefore, the receipt of money from or on account of his customer by a banker constitutes the banker as the debtor of the customer and the banker undertakes to pay the money thus due from him to the customer a!ainst written orders of the
customer. Accordin!ly, the relationship so constituted is that of principal and a!ent and therefore a che"ue drawn on the banker by the customer represents the order of the principal to his a!ent to pay, out of the principalDs money in his hands, the amount stated on the che"ue to the payee endorsed on the che"ue. (ee also the case of %alo!un v. N%N /089 // N(@@ /26 Today in the economy of any country banks play a vital role. *ne cannot think of the development of any nation without active assistance rendered by the bankin! and financial institutions. %ankin! is a service industry and the bankers are epected to !ive top priority to provide satisfactory service to their customers. )hether anyone is a depositor, a borrower or any other person usin! other services provided by the banks, the motto should be =@ustomer (atisfaction.>
The main thin!, which a bank is providin!, is =service> and the product of bank&s work and its success depends on the ran!e and the "uality of the services it can provide to the customers. To find out the present state of affairs and to su!!est further new ways for the net millennium, a survey of the city of certain banks in the city of 7daipur has been undertaken. The researcher is of the opinion that there is indeed a need for proper le!islation to deal with the distinctive feature of bankin! business.
Crior to nationali+ation of the banks in Euly /010, banks were very much market friendly and even !uidin! the customers by !ivin! personali+ed service by actin! as their philosopher and !uide. %ut now the position is reverse and the table is turned. That&s why the public is clamorin! for the privati+ation of the banks to see at least the personali+ed service period of the pre-nationali+ation era when the bankers were hearin! the customers and were marketin! friendly.
#ollowin! are the instances when the bankers are unfriendly: /. )hen parties !o to bank, even on their own re"uest for openin! account no body helps them.
3. There is no attitude of advance market friendliness in most of the branches and the customers are neither even aware of the advance schemes nor do they know how to prepare their pro;ects or fill up the application forms.
2. Now-a-days, bankers are treatin! entry of customers into branch premises as a nuisance.There who come for cash drafts are turned away. $ven small notes brou!ht by the customers are not accepted by the banks.
If the bankers do not mend their ways and become market friendly as durin! the prenationali+ation days, the days are not far off, the bank customer to form an association of their own in their districts, states and at the national level to resist and control hi!h handed dis-service imparted across the counters to the customers in particular and at the public at lar!e. The banker-customer relationship is contractual. The relationship should not be merely be of debtors and creditors, but it should also embrace the super-added obli!ations on the part of the banker to humor the customer&s need effectively and efficiently. In this era smooth functionin! of banks depends too much on the relations between the banker and the customers.
CHAPTER NO.3 BANK ACCOUNT AND SPECIAL TYPE OF CUSTOMERS
The relationship between a banker and a customer is of !reat si!nificance. It depends upon the services rendered by the banker to the customer. The relationship between a banker and a customer depends on the activitiesF products or services provided by bank to its customers or availed by the customer. Thus the relationship between a banker and customer is the transactional relationship. %ank&s business depends much on the stron! bonda!e with the customer. =Trust> plays an important role in buildin! healthy relationship between a banker and customer. Definition of banker
The %ankin! Be!ulations Act % B Act /040 does not define the term Gbanker& but defines what bankin!
is
As per Sec.5 ! of the % B Act =%ankin!D means acceptin!, for the purpose of lendin! or investment, of deposits of money from the public repayable on demand or otherwise and withdrawable by che"ue, draft, order or otherwise. Accordin! to "ec#$%& 3 of the NI Act, /99/, banker includes any person actin! as a banker and any post office savin!s bank. To sum up a banker is who /
Take deposit account
3
Take current accounts
2
Issue and pay che"ues
4
@ollect che"ues crossed and uncrossed for his customers. Joney lender is not considered as a banker as mere lendin! does not constitute bankin! business. %anker is an institution which borrows money by acceptin! deposits from the public
for
the
purpose
of
lendin!
to
those
who
are
in
need
of
money.
Accordin! to Sec. 2 of the %ill of $chan!e Act, /993, Gbanker includes a body of persons, whether
incorporated
or
not
who
carry
on
the
business
of
bankin!.&
Sec.5c' of %B Act defines bankin! company as a company that transacts the business of
bankin! in India. (ince a banker or a bankin! company undertakes bankin! related activities we can derive the meanin! of banker or a bankin! company from (ec 6b as a corporate a
that:
Accepts
b ends
c
deposits
from
public.
or
Invests
d
body
Allows
the
money
withdrawals
of
so
deposits
collected
on
demand
by
or
way
by
any
of
deposits.
other
means.
Acceptin! deposits from the Gpublic& means that a bank accepts deposits from anyone who offers money for the purpose. 7nless a person has an account with the bank, it does not accept deposit. #or depositin! or borrowin! money there has to be an account relationship with the bank. A bank can refuse to open an account for undesirable persons. It is banks ri!ht to open an account. Beserve %ank of India has stipulated certain norms (K&%) Y%*+ C*"#%,e+- KYC !uidelines for openin! account and banks have to strictly follow them.
In addition to the activities mentioned in (ec.6 b of % B Act, banks can also carry out activities mentioned in (ec. 1 of the Act. Definition of customer
The term customer is not defined by law. *rdinarily, a person who has an account in a bank is called a customer. The term @ustomer has not been defined by any act. The word Gcustomer& has been derived from the word Gcustom&, which means a Ghabit or tendency& to-do certain thin!s in a re!ular or a particular manner&s . In terms of (ec./2/ of Ne!otiable Instrument Act, when a banker receives payment of a crossed che"ue in !ood faith and without ne!li!ence for a customer, the bank does not incur any liability to the true owner of the che"ue by reason only of havin! received such payment. It obviously means that to become a customer account relationship is must.
Account
relationship
is
a
contractual
relationship.
It is !enerally believed that any individual or an or!anisation, which conducts bankin! transactions with a bank, is the customer of bank. However, there are many persons who do utili+e services
of
banks,
but
do
not
maintain
any account
with
the
bank.
Thus bank customers can be cate!ori+ed in to four broad cate!ories as under: aThose who maintain account relationship with banks i.e. $istin! customers.
bThose
who
had
account
relationship
with
bank
i.e.
#ormer
@ustomers
cThose who do not maintain any account relationship with the bank but fre"uently visit branch of a bank for availin! bankin! facilities such as for purchasin! a draft, encashin! a che"ue, etc. Technically they are not customers, as they do not
maintain
any
account
with
the
bank
branch.
dCrospective Cotential customers: Those who intend to have account relationship with the bank. A person will be deemed to be a DcustomerD even if he had only handed over the account openin! form duly filled in and si!ned by him to the bank and the bank has accepted the it for openin! the account, even thou!h no account
has
actually
been
opened
by
the
bank
in
its
books
or
record.
The practice followed by banks in the past was that for openin! account there has to be an initial deposit in cash. However the condition of initial cash deposit for openin! the account appears to have been dispensed with the openin! of N% F+$//0 account by banks as per directives of Beserve %ank of India. N% F+$//0 accounts are opened with GNil& or with mea!er balance.
The term DcustomerD is used only with respect to the branch, where the account is maintained. He cannot be treated as a GcustomerD for other branches of the same bank. However with the implementation of& G@ore %ankin! (olution& the customer is the customer of the bank and not of a particular branch as he can operate his account from any branch of the bank and from anywhere. In the event of arisin! any cause of action, the customer is re"uired to approach the branch with which it had opened account and not with any other branch.
Accordin! to 'r. Hart, =a customer is one who has an account with a banker or for whom a banker habitually undertakes to act as such. Thus to constitute a customer, the followin! essential re"uisites must be fulfilled: / He must have some sort of an account. 3 $ven a sin!le transaction constitutes a customer. 2 The dealin! must be of a bankin! nature. A customer need not be a person. A firm, ;oint stock company, a society or any separate le!al entity may be a customer. $planation to section 46-K of the %B Act clarifies that a customer includes a
Introduction of the prospective customer and preliminary investi!ations know your customer ?L@ *btainin! specimen (i!natures Jandate re!ardin! operation of Account
A//%c#$& Acc%*&# &*,!e+ P+e/$,$&+ $&6e"#$#$%&" 7I&#+%8*c#$%& % Acc%*&#
Introduction of a new account refers to proper investi!ations about the credentials of prospective account holder by the banker. If proper introduction not obtained it would tantamount to &e/$e&ce on the part of banker. Betention of photo copy of @NI@ of Account Holder as well as introducer of account after verifyin!
from ori!inals.
W9 I&#+%8*c#$%& : P+e/$,$&+ I&6e"#$#$%&; '. To avoid frauds !'.(afe!uard a!ainst unintendedinadvertent credits to an account by mistake, in case banker has
conducted proper preliminary investi!ations and obtained introduction it would be help in follow up process
Ne!li!ence in seekin! proper introduction M makin! necessary preliminary investi!ations leads to deprivation of banker from seekin! protection of law 7( /2/ of Ne!otiable Instruments Act /99/. In"uiries about client credit Beportsstatus in"uiries furnished by banks. In case account opened by a banker without proper in"uiriesthe bank furnishin! status in"uiries etc. may at times launch itself into trouble.
Sec$,e& S$&#*+e";
If for!ed si!natures on a @he"ue entertained M @he"ue passed by bank--bank shall be le!ally responsible to make !ood the loss to Account Holder
Oe&$& % Acc%*&# % & I//$#e+#e Pe+"%&;
Choto!raph on (.( @ard Thump impression in the presence of bank officer to be affied. .T.I
Te % Acc%*&#";
Individual&s Account Eoint Account Jinor&s Account
Le/ I""*e" )$#9 +e"ec# #% $&8$6$8*/0" Acc%*&#;
A banker&s authority to pay che"ues is revoked in the followin! situations as per provisions contained in section /33-A of Ne!otiable Instruments Act, /99/: @ountermand of payment stop payment Notice of customer&s death Notice of Ad;udication of the @ustomer as insolvent
<%$&# Acc%*&#"
These accounts are not to be treated as partnership accounts. These are the accounts opened in the name of two or more persons who are not partners
Oe+#$%&" % <%$&# Acc%*&#;
--The mandate must bear the si!natures of all the account holders. @an be operated ;ointly by all the account holders @an be operated by any one or more persons authori+ed to operate the account $ither or (urvivor s mandate.
S#% P,e&# I&"#+*c#$%&" $& <%$&# Acc%*&#
Any one of the ;oint account holders can !ive stop payment instructions of any che"ue to the bankF however, for reinstatement of the payment of such che"ue, such instructions must bear si!natures of all the account holders.
M$&%+0" Acc%*&#
Jinor does not have le!al capacity to enter into a contract. As we know that le!al relationship between banker and his customer is a contractual relationship, as such minor is not "ualified under law to open an account. However, an account in the name of minor can be opened when !uardian of the minor shall operate this account. Accordin! to law, minor is a person who has not attained the a!e of /9 years. #urthermore under section 2 of ma;ority Act /986, if a !uardian is appointed by the court in respect of a person before he attains the a!e of /9 years, the ma;ority etends to the a!e of 3/ years.
C/""$$e8 Acc%*&#" % #9e C*"#%,e+"
Cartnership Account @ompanies Account Account of @lubs, (ocieties M Associations. A!ents& Account Trust Account $ecutors M Administrators& Account Accounts of ocal %odies
P+#&e+"9$ Acc%*&#; (P+#&e+"9$- is the relation between persons who have a!reed to share the profits of a
business carried on by all or any of them actin! for all Bi!ht to sue vests in re!istered firm. Cartner is treated as an a!ent of firm (ection /9 of Cartnership Act. /023 howeverF partner has no authority to open an account on behalf of the firm (ection /0-3%
(urvivorship mandate Eoint and several mandates Admission of new partnerresponsibilities of incomin! partner start from the date of admission unless not otherwise a!reed. %ankruptcy of a partner-- ordinarily partnership stands dissolved. Insolvency of firmbusiness of partnership vests in official receiver appointed by court, operations in account are stopped, personal accounts of partners are also declared inoperative.
Acc%*&#" % C%,&$e" D%c*,e&#" Re=*$+e8;
Besolution passed by %oard of 'irectors for openin! the account @opy of Jemorandum of Association @opy of Articles of Association @ertificate of Incorporation @ertificate of commencement of business %alance (heet.
*peration of the account in line with the instructions contained in the board of directors resolution, authori+ed directors to operate the account. In case of windin! up of a company, bank should stop operations in the account.
Acc%*&#" % C/*!"> S%c$e#$e" : A""%c$#$%&
Besolution passed by mana!in! committeeeecutive committee
Ae&# Acc%*&#
A!ent acts on behalf of the principal. A!ent can open an account under the authority of principalbased on power of attorney. *n revocation of power of attorney operation in the account will stand inoperative. In case death of the a!ent operations should be stopped immediately however, Crincipal can si!n the che"ues and the same are honored by the banks.
Acc%*&# % T+*"#";
Trusts are !overned by Trust Act-/993 Any person who is competent to contract may create a trust.
Oe&$& % Acc%*&#
Account is opened in the name of the Trust. All trustees to si!n account openin! form.
E?ec*#%+" : A8,$&$"#+#%+@" Acc%*&#
$ecutor is a person who is entrusted responsibilities of eecutin! )I. An administrator is a person appointed by a court to look after the estate of a person who died without leavin! a )I or the person appointed as eecutor is not competent to perform the contract for eample minors, insolvent, lunatics The banks must carefully study the contents of the )I before openin! an account of $ecutorAdministrator.
Acc%*&#" % L%c/ B%8$e";
The accounts must be in conformity with local bodies lawrules. The re"uest for openin! an account must be made by competent authority.
K&%)
Y%*+
C*"#%,e+0
G*$8e/$&e"
&8
C*"#%,e+;
et us discuss another important aspect of banker- customer relation i.e. certain !uidelines that the banker has to follow when a customer opens accounts in the bank.. Lou are aware that the relationship between the banker and the customer is created as soon as the customer opens an account in the bank.
The B%I has issued certain !uidelines for the mana!ement of the commercial banks. These !uidelines that bankers follow are known as ?now Lour @ustomer ?L@
Identifyin! depositorsF
•
controllin! financial fraudsF
•
identifyin! money launderin! and suspicious activitiesF
•
monitorin! of lar!e value cash transactionsF and preventin! misuse of bankin! system for committin! frauds.
•
The B%I has issued ?L@ !uidelines for various aspects like, !uidelines for new accounts, eistin! customers, risk mana!ement and monitorin! procedures, record keepin! etc. In this unit we will discuss the ?L@
KYC
G*$8e/$&e"
%+
&e)
cc%*&#"
The banker must comply with these !uidelines when an individual or a corporation applies for
openin!
account
in
the
bank-
The banker must verify the identity of a customer while openin! an account. The new customer while openin! an account in a bank may !ive reference of an eistin! accountholder or the person known to the bank as reference for his identification. The banker can also verify the identity of the customer on the basis of the documents, such as O passport, drivin! license etc.
supplied
by
the
new
customer.
The %oard of 'irectors of the banks should establish proper procedure to verify the identification of the new customer and to monitor the suspicious nature of transactions in accounts.
KYC
G*$8e/$&e"
%+
e?$"#$&
cc%*&#"
In case of eistin! customers, it is epected that bank had adopted appropriate ?L@ norms while openin! the accounts. In case of any default, the re"uired norms should be completed at the earliest.
Ce$/$& &8 ,%&$#%+$& % c"9 #+&"c#$%&"
As per B%I !uidelines issued under (ection 26 A of the %ankin! Be!ulation Act, /040: i%anks are re"uired to issue travellers che"ues, demand drafts, mail transfers, and tele!raphic transfers for Bs.65, 555 and above only by debit to customers& accounts or a!ainst che"ues and not a!ainst cash. )hile purchasin! travellers che"ues, demand drafts, mail
transfers, and tele!raphic transfers for Bs.65, 555 and above purchaser has to mention his Cermanent Income Ta Account Number CAN on the application. ii The banks are re"uired to keep a close watch of cash withdrawals and deposits for Bs./5 lakhs and above in deposit, cash credit or overdraft accounts and keep record of details of these lar!e cash transactions in a separate re!ister. %ranches of banks are re"uired to report all cash deposits and withdrawals of Bs./5 lakhs and above as well as transactions of suspicious nature with full details in fortni!htly statements to their controllin! offices.
B&e+"0 F$+ P+c#$ce C%8e;
Indian %anks& Association has prepared a code, which sets standards of fair bankin! practices. This document is a broad framework under which the ri!hts of common depositors are reco!ni+ed. It is a voluntary @ode that promotes competition and encoura!es market forces to achieve hi!her operatin! standards for the benefit of customers. The @ode applies to current, savin!s and all other deposit accounts, collection and remittance services offered by the banks, loans and overdrafts, forei!n-echan!e services, card products and third party products offered by banks.
DUTIES OF BANKER
/ The banker should receive the customer&s money and credit his account.
3 He should receive che"ues and bills sent by his customer for collection and the credit his customer&s account without delay.
2 He should return the deposit as per the contractF he should honour customer&s che"ues to the etent of his balance in the account. He should use reasonable care in payin! che"ues drawn upon him by his customers, to refrain from any action likely dama!e his customer&s reputation.
4 He should maintain the secrecy of his customer&s account.
6 He should observe the customer&s instruction as mentioned in the mandate.
1 He should !ive reasonable notice before combinin! the accounts of his customer or closin! his account.
RIGHTS OF BANKER
A banker has certain obli!ations to the customers. At the same time banks en;oy certain ri!hts also. Now we will discuss some ri!hts of the banker in relation to the bank accounts maintained in a bank. P
%anker&s lien: In sub section //.4.3 we have discussed the creditor and debtor
relationship between the banker and the customer, where the banker is the creditor and the customer is the debtor. This relationship arises when an amount remains due by the customer debtor to the banker creditor. The banker can eercise his ri!ht of !eneral lien by retainin! the properties of the customer till all the dues are paid by the customer. In the absence of any a!reement to the contrary, the banker can retain any !oods and securities for !eneral balance of accounts. However, the banker cannot eercise this ri!ht over the !oods or securities which he has received in the capacity of a!ent or trustee of the customer. P
Bi!hts of set- off: The ri!ht of set-off is a ri!ht to ad;ust the accounts between two
parties- creditor and the debtor. *n the basis of ri!ht of set- off, the banker can ad;ust the credit balance in the customer&s account a!ainst the amount due to the banker i.e. any debit balance in the customer&s account. )hen a customer maintains two accounts in the same capacity, the ri!ht of set- off enables the banker to combine the two accounts and ad;ust the amount due from the customer. The banker can eercise this ri!ht if there is no a!reement to the contrary between them. In eercisin! this ri!ht, the banker must serve a notice to the customer. P
Bi!ht of appropriation: )hen a debtor customer makes payment to a creditor
banker, the debtor can instruct the creditor to ad;ust the amount for dischar!e of a particular debt. If the debtor does not !ive any instruction to the creditor re!ardin! the ad;ustment, the creditor has the ri!ht to appropriate the amount a!ainst any debt. The creditor must inform the debtor re!ardin! such appropriation. .Bi!ht to char!e interest, commission, incidental char!es etc. :%anker has an implied ri!ht to char!e for services rendered and sold to a customer. %ank char!es interest on amount advanced, processin! char!es for the advance, char!es for non-utili+ation of credit facilities sanctioned, char!es commission, echan!e, incidental char!es etc. dependin! on the terms and conditions of advance banks char!e interest at monthly, "uarterly or semiannually or annually. %anks char!e customers if the balance in deposit account falls below the prescribed amount. 7sually the bank informs such char!es to the customer by various means.
P
Bi!hts under
che"ues of his customer. %ut in case a !arnishee order is issued by the court, the banker cannot make any payment from the account of the customer. The obli!ation of the banker to honour the che"ues stand suspended in that case. et us see how a !arnishee order can affect the relationship between the banker and the customer. (uppose Jr. A is the customer of (%I. He has taken a loan from his friend Jr. %. %ut Jr. A fails to repay the loan to Jr. % and as a result Jr. % files a case a!ainst Jr. A. Now Jr. % re"uests the court to issue an order on the bank of Jr. A directin! the banker (%I not to make any payment from the available balance in the account of Jr. A. If the court issues such an order, it is known as G
*bli!ation to honour che"ues- banker accepts the deposits from the customer with an obli!ation to repay it to him on demand or otherwise. The banker is therefore under a statutory obli!ation to honour his customer&s che"ues because, it is reco!ni+ed under section 2/ of the NI Act, /99/The drawee of a che"ue havin! sufficient funds of the drawer in his hands properly applicable to the payment of such che"ue must pay the che"ue when duly re"uired so to do, and, in default of such payment, must compensate the drawer for any loss or dama!e caused by such default. Thus the banker is bound to honour his customer&s che"ues provided the followin! conditions are fulfilleda (ufficient balance in customer&s account b Cresentation of che"ues within workin! hours of business c Cresentation of che"ues within reasonable time after ostensible date of its issue d @he"ues should be presented at the branch where account is kept
e #ulfilment of re"uirements of law *bli!ation to maintain secrecy and disclosure of information re"uired by law- the banker is under an obli!ation to take utmost care in keepin! secrecy about the accounts of the customers since it may affect his reputation, credit-worthiness and business. It was firmly laid down in Tournier v. National Crovincial and 7nion %ank of $n!land td. in India it was made compulsory after /085. The duty to maintain secrecy will be continuin! even after the account is closed or the death of the customer. This obli!ation is sub;ect to certain eceptions. *bli!ation to keep a proper record of transactions- the banker must keep a proper record of transactions of the customer. If he wron!ly credits the account of the customer and intimates him with the same and the customer acts upon the intimation bonafide and withdraws cash the banker cannot contend that the entries were wron!ly made. He shall not succeed in recovery of money from the customer. *bli!ation to abide by the instructions of the customer- the banker must abide by any epress instructions of the customer provided it is within the scope of their banker-customer relationship. In the absence of any epress instructions, the banker must accordin! to prevailin! usa!es at the place where the banker conducts his business. C*"#%,e+0" %!/$#$%&" #% 9$" !&
The main customer&s obli!ations to his are: -The customer is under the duty to eercise reasonable care when drawin! his che"ues, to help prevent fraud or for!ery, -The customer must !o to his bank when he re"uires paymentF it is not the incumbent on the banker to seek out the customer, -%efore drawin! the che"ues, the customer must ensure his account is put in funds to meet it, -A customer must pay reasonable interest and commission and other char!es for bankin! services and this is implied when heshe opens an accout.
CHAPTER NO.4 RELATIONSHIP BETWEEN BANKER AND CUSTOMER C/""$$c#$%&
%
Re/#$%&"9$;
The relationship between a bank and its customers can be broadly cate!ori+ed in to
If we look at Sec 5!' of %ankin! Be!ulation Act, we would notice that bank&s business hovers around acceptin! of deposits for the purposes of lendin!. Thus the relationship arisin! out of these two main activities are known as
Ge&e+/ Re/#$%&"9$; 1.De!#%+C+e8$#%+;
)hen a customer deposits money with his bank, the customer becomes a lender and the bank becomes a borrower . the money handed over to the bank is a debt. The relationship between the banker and the customer is that of a debtor and a creditor. The features of this relationship are:athe money is lent to the bank and the bank is free to use it in a way most beneficial to it. The bank is not bound to keep such money intact. It is not bound to return the notes and coins of the same denomination as it was deposited. bdemand of payment should made by the customer. The banker is not re"uired to repay the debt voluntarily, unlike in the case of commercial debt.
cdemand should be made at the branch where the account eists. $cept in the case of drafts, travellers che"ue, ATJcredit card etc., the bank is not re"uired to make the payment to the customer elsewhere at other centres, althou!h all the branches of a bank are constituents of the same bank .in the above case. It was held that althou!h the branches were a!encies of one principal bank, they were distinct for payment of customer&s che"ues.
dthe demand should be made in a proper manner. The customer should demand payment not verbally or by a mere telephone call but by che"ue, draft, withdrawal form, order or otherwise, further, Ne!otiable Instruments Act,/99/,respectively.
2. C+e8$#%+De!#%+ O6e+8+)$& #9e cc%*&#; you have come across that that the current accountholders !et
overdraft facility from the bank. 7nder this facility the accountholder can overdraw his account i.e. withdraw more money than the balance available in the account. In case the accountholder overdraws the account, the relationship between the banker and the customer !ets the shape of creditor and debtor relationship- the banker is the creditor and the accountholder customer is the debtor. Till the overdrawn amount is returned by the customer, the relationship between the two continues to be of creditor and debtor. As soon as the overdrawn amount is returned by the customer, the relationship !ets its ori!inal shape i.e. banker becomes the debtor and the accountholder becomes the creditor. Le&8$& ,%&e #% #9e c*"#%,e+;
endin! money is the most important activities of a bank. The resources mobili+ed by banks are utili+ed for lendin! operations. @ustomer who borrows money from bank owns money to the bank. In the case of any loanadvances account, the banker is the creditor and the customer is the debtor. )hen a bank sanctions a loan to a customer, the relationship between the two is that of the creditor and the debtor. The creditor banker char!es interest on the loan till it is paid back by the customer. )hen the loan is paid back fully, the relationship reverses and !ets the ori!inal shape of debtor banker and creditor customer. Sec$/
Re/#$%&"9$;
1.Re/#$%&"9$ % T+*"#ee &8 Be&e$c$+;
%esides the debtor- creditor relationship between the banker and the customer, some other types of relationships also eist between the two, dependin! on the services provided by the bank.
*ne
of
such
relationships
is
that
of
trustee
and
beneficiary.
Cerhaps you are aware that banks provide some services under which the customers can keep their valuables like ;ewellery, share certificate etc. in safe custody of the bank. A trustee
holds property for the beneficiary, and the profit earned from this property belon!s to the beneficiary. If the customer deposits securities or valuables with the banker for safe custody, banker becomes a trustee of his customer. The customer is the beneficiary so the ownership remains with the customer.The customer remains the owner of such valuables thou!h they are in the custody of the banker. In this case the banker acts as trustee and the customer is the beneficiary. 3. Re/#$%&"9$ % B$/%+ &8 B$/ee The relationship between banker and customer can be that of %ailor and %ailee. /.
%ailment is a contract for deliverin! !oods by one party to another to be held in trust
for a specific period and returned when the purpose is ended. 3.
%ailor is the party that delivers property to another.
2.
%ailee is the party to whom the property is delivered.
(o, when a customer !ives a sealed bo to the bank for safe keepin!, the customer became the bailor, and the bank became the bailee. %anks also keeps articles, valuables, securities etc., of its customers in (afe @ustody and acts as a %ailee. As a bailee the bank is re"uired to take care of the !oods bailed. )hen the customer keeps his valuable in the safe custody of the banker, the banker besides actin! as trustee also acts as bailee. In that case the customer becomes the bailor. If the customer bailor suffers any loss due to the ne!li!ence of duty on the part of the banker bailee, the customer can file a case in the court of law for the recovery of such loss. 3. Re/#$%&"9$ % Ae&# &8 P+$&c$/
Thus an a!ent is a person, who acts for and on behalf of the principal and under the latter&s epress or implied authority and the acts done within such authority are bindin! on his principal and, the principal is liable to the party for the acts of the a!ent The banker acts as an a!ent of the customer principal by providin! the followin! a!ency services: P
%uyin! and sellin! securities on his behalf,
P
@ollection of che"ues, dividends, bills or promissory notes on his behalf, and
P
Actin! as a trustee, attorney, eecutor, correspondent or representative of a customer.
%anker as an a!ent performs many other functions such as payment of insurance premium, electricity and !as bills, handlin! ta problems, etc. The banker a!ent performs the functions accordin! to the instructions of the customer principal and for this the banker is entitled to !et commission from his principal. 4. Re/#$%&"9$ % /e""%+ &8 /e""ee
Crovidin! safe deposit lockers is as an ancillary service provided by banks to customers. )hile providin! (afe 'eposit aultlocker facility to their customers bank enters into an a!reement with the customer. The a!reement is known as =Jemorandum of lettin!> and attracts
stamp
duty.
The relationship between the bank and the customer is that of lessor and lessee. %anks lease hire lockers to their customers their immovable property to the customer and !ive them the ri!ht to en;oy such property durin! the specified period i.e. durin! the office bankin! hours and char!e rentals. %ank has the ri!ht to break-open the locker in case the locker holder defaults in payment of rent. %anks do not assume any liability or responsibility in case of any dama!e to the contents kept in the locker. %anks do not insure the contents kept in the lockers by customers. In certain banks, this relationship is termed as licensor and licensee. 5. Re/#$%&"9$ % I&8e,&$$e+ &8 I&8e,&$$e8
A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself or the conduct of any other person is called a contract of indemnity. In the case of bankin!, this relationship happens in transactions of issue of duplicate demand draft, fied deposit receipt etc. here the bank is indemnified or indemnity holder and customer is indemnifier. The underlyin! point in these cases is that either party will compensate the other of any loss arisin! from the wron!ecess payment. 1. Re/#$%&"9$ % G*+&#%+ &8 *+&#ee %anks !ive !uarantee on behalf of their customers and enter in to their shoes.
As per sec 2/,of Indian contract Act !uarantee is a contin!ent contract . @ontin!ent contract is a contract to do or not to do somethin!, if some event, collateral to such contract, does or does not happen. A bank as !uarantor !ives !uarantee to its customer by issuin! a Gletter of credit&. It is a kind of credit facility to its customer to facilitate international trade. A bank !uarantee contains an undertakin! to pay the amount without any demur on mere demand of the principal amount on the !round for non-performance or breach of contract. . Re/#$%&"9$ % P/e8e+ &8 P/e8ee
The relationship between customer and banker can be that of Cled!er and Cled!ee. This happens when customer pled!es promises certain assets or security with the bank in order to !et a loan. In this case, the customer becomes the Cled!er, and the bank becomes the Cled!ee. 7nder this a!reement, the assets or security will remain with the bank until a customer repays the loan. . Re/#$%&"9$ % A86$"%+ &8 C/$e&#
)hen a customer invests in securities, the banker acts as an advisor. The advice can be !iven officially or unofficially. )hile !ivin! advice the banker has to take maimum care and caution. Here, the banker is an Advisor, and the customer is a @lient. .Re/#$%&"9$ % H%#9ec#%+ &8 H%#9ec#ee
The relationship between customer and banker can be that of Hypothecator and Hypotheatee. This happens when the customer hypothecates pled!es certain movable or non-movable property or assets with the banker in order to !et a loan. In this case, the customer became the Hypothecator, and the %anker became the Hypothecatee. 1. O#9e+ Re/#$%&"9$"
*ther miscellaneous banker-customer relationships are as follows: P
*bli!ation to honour che"ues : As lon! as there is sufficient balance in the account of
the customer, the banker must honour all his che"ues. The che"ues must be complete and in proper order. They must be presented within si months from the date of issue. However, the banker can refuse to honour the che"ues only in certain cases.
P
(ecrecy of customerDs account : )hen a customer opens an account in a bank, the
banker must not !ive information about the customerDs account to others. P
%ankerDs ri!ht to claim incidental char!es : A banker has a ri!ht to char!e a
commission, interest or other char!es for the various services !iven by him to the customer. #or e.!. an overdraft facility. P
aw of limitation on bank deposits : 7nder the law of limitation, !enerally, a
customer !ives up the ri!ht to recover the amount due at a banker if he has not operated his account since last /5 years. R*/e" &8 +e*/#$%&"
/. The banker-customer relationship once established it is often a lon! term one.it may even continue after the customer&s death, when the bank acts in the capacity of eecutor or trustee of the deceased customer&s wealth 3. It should always be remembered that the bank is not under le!al obli!ation to accept every applicant as a customer. 2. The banker must be satisfied with the responses to all in"uiries before a!reein! to open an account for a prospective customer. 4. %anks will satisfy themselves about the identity of a person seekin! to open an account, in order to protect themselves, their customers and !eneral public. 6. All banks should institute effective procedures for obtainin! identification from new customers. Te+,$&#$%& % #9e B&e+ C*"#%,e+ Re/#$%&"9$
The relationship between a bank and a customer ceases on: P Termination by the @ustomer by closin! the account i.e. oluntary termination The customer may at any time demand full repayment of his credit balance. It is su!!ested that if the customer reduces the account to a nil balance, the account should not be closed without confirmation from the customer that this is his intention.
It would seem that a customer with an overdrawn account may not terminate the bankercustomer contract without repayin! the debt. The %ankin! @ode and the %usiness %ankin! @ode,
however,
state
that
a
bank
must
close
an
account
when
asked to do so. P Termination by the bank by closin! of the account after !ivin! due notice:It was stated in Eoachimson that a bank may only close an account after !ivin! reasonable notice and makin! provision for outstandin! che"ues. In Prosperity Ltd v Lloyds Bank, 19m it was held that one monthDs notice was insufficient, but here the customerDs bankin! arran!ements were unusually comple. The %ankin! @ode and the %usiness %ankin! @ode declare that under normal circumstances a customer should be !iven at least 25 daysD notice before his account is closed - and this appears to include overdrawn accounts.
It has been observed that a bankDs duty of secrecy survives the termination of the contract. The customer may make claims arisin! from unauthori+ed debits such as for!ed che"ues, which the customer raises for the first time after termination of the contract. P Termination by aw: a 'eath of the customerF b Jental incapacity of the customer c %ankruptcy or insolvency of bank or customer. d The completion of the contract or the specific transaction The contractual relationship will !enerally sei+e to eist upon the closure of the account. However, it should be noted that some of the obli!ations may still eist after the account has been closed. As a result of the increase in electronic bankin!, the le!al nature of the bank-customer relationship is constantly chan!in!. $n!lish courts and financial re!ulators have had to strive for a hi!h level of fleibility in order to keep up with the introduction of new systems and products by financial service providers.
%anks currently operatin! in the 7? are takin! steps to do away with che"ues as a result of the introduction of $lectronic #unds Transfer at Coint of (ale, #aster Cayments, 'irect 'ebits and Tele!raphic Transfers amon! others. The fleibility of $n!lish aw is reflected in the recent #inancial (ervices Act 35/5 which has provided for the amendment of the #inancial (ervices and Jarkets Act #(JA 3555. Jost of the amendments by the #inancial (ervices Act 35/5 on consumer protection provisions in the #(JA 3555 have come about as a result of the recent !lobal financial crisis. %anks in Africa also seem to be emulatin! these trends as we&ve seen in $urope and America. #or instance Ni!eria is workin! on the cashless pro;ect which hopefully will reduce the hi!h usa!e of cash and accelerate electronic transfers. The chan!es that have been brou!ht about by these new technolo!ies would certainly have an impact on the le!al nature of the bank-customer relationship. It then follows that as lon! as the business of bankin! keeps chan!in!, the le!al nature of the bank-customer relationship will continue to be adapted
/. Lou are a customer of which bank (%I
I@I@I
H'#@
%ank (%I I@I@I H'#@ *TH$B
*TH$B
Number of Bespondents 35Q /6Q 5Q 16Q
BANK
2
(%I
I@I@I
H'#@
*TH$B
15 5
CONCLUSION;-
#rom the above table and chart, this can be seen that out of the total respondents every respondent havin! account in the *TH$B bank but (%I has more customers than I@I@I and H'#@. The I@I@I is also has more customers than H'#@.
3. )hat is your occupation (elf-$mployed
$mployee
$mployer
@orporate %usiness
*ccupation
number of respondents
self-employed
46Q
employee
45Q
employer
5Q
corporate business
5Q
others
/6Q
OCCUPATION number of respondents
46Q
45Q
/6Q
5Q self-employed
employee
employer
5Q corporate business
others
*thers
CONCLUSION;
(o it is concluded that the self-employed occupation is more than others and it is 46Q. The net occupation is employee is of 45Q is also more than other three and others occupation is of /6Q are also more than other two.
2. )hich type of account holder you are Individual
Cartnership
Eoint A@
type of account holder individual partnership ;oint ac other
*ther
number of respondents 85Q 5Q 36Q 6Q
TYPE OF ACCOUNT HOLDER 95Q 85Q
85Q
15Q 65Q number of respondents 45Q 25Q 36Q
35Q /5Q 5Q
5Q individual
partnership
;oint ac
6Q other
CONCLUSION;
As per the survey is concerned the individual account holder is of 85Q and it is more than the others. The ;oint account holder is of 36Q and the other type of account holder is of 6Q.
4. )hich type of account do you have with bank (avin! Becurrin! @urrent
type of account
number of respondents
savin!
96Q
recurrin!
5Q
current
5Q
fied
/6Q
#ied
#e % cc%*&#
$?e 8J 15
savin!
CONCLUSION;
recurrin!
current "6$&J 5
fied
#rom the total number of respondents is of 35 people the number of respondents in the savin! account is of 96Q and it is more than the other type of account. The fied account is of /6Q and is more than the other two account type.
6. 'o you you feel feel that that the the proc proced edur uree to open open an acco accoun untt with with the the bank bank was was difficult Les, to a certain etent
No, it was easy
open an account
number of respondents
yes
/6Q
no
96Q
05Q 95Q 85Q 15Q 65Q
number of respondents
45Q 25Q 35Q /5Q 5Q ye s
CONCLUSION;
no
The procedure to open an account with the bank ban k is easy, it was not difficult the number of respondents feel. The 96Q of number of respondent answered that the procedure is easy.
1. 'o you a!ree that minimum account limit is not hi!h and easy to maintain (tron!ly A!ree
A!ree
(omewhat A!ree
minimum account limit stron!ly a!ree a!ree somewhat a!ree disa!ree
'isa!ree
number of respondents 6Q 95Q /5Q 6Q
&*,!e+ % +e"%&8e&#"
5
5
1 1
stron!ly a!ree a!ree somewhat somewhat a!ree disa!ree
CONCLUSION;
The total number of respondents answered that the minimum account balance is easy to maintain. #rom the total number of respondents is of 35 people and 95Q number of respondents said that it is not difficult to maintain the minimum account balance.
8. How satisfied are you with the services provided by the bank ery satisfied
(atisfied
(omewhat satisfied
(ervices very satisfied satisfied somewhat satisfied dissatisfied
number of respondents /6Q 85Q /6Q 5Q
15
15
very satisfied
satisfied
somewhat satisfied
dissatisfied
'issatisfied
CONCLUSION;
#rom the above table and chart, this can be seen that out of total respondents 85Q respondents have satisfied with services provided by bank. The /6Q respondents have very satisfied and /6Q of respondents have somewhat satisfied.
9. 'escribe the overall relationship between you and bank Coor
ery poor
relationship poor very poor !ood ecellent
$cellent
number of respondents 6Q 5Q 05Q 6Q
05Q 95Q 85Q 15Q 05Q
65Q 45Q 25Q 35Q /5Q 5Q
6Q poor
6Q
5Q very poor
!ood
number of respondents
ecellent
CONCLUSION;
The number of respondents answered that their relationship with bank is !ood. The 6Q respondents answered that their relationship is ecellent and 6Q respondents answered that their relationship is poor.
0. How many times have you faced a problem related to your bankin! account in the last / year *nce
/-6 times
Jore than /5 times
Never
problems
number of respondents
once
45Q
/-6 times
6Q
more than /5 times
6Q
never
65Q
&*,!e+ % +e"%&8e&#" 15Q 65Q 45Q
65Q 45Q
number of respondents
25Q 35Q /5Q 5Q
6Q once
6Q
/-6 times more than /5 times
never
CONCLUSION;
The 65Q respondents never faced a problem related to a bankin! account in the last one year. The 45Q respondents faced a problem at once in the last one year. The remainin! 6Q respondents faced a problem one to five times and 6Q respondents faced a problem more than /5 times in the last one year.
/5. Is your business handled by bankin! eecutives in a timely and efficient manner Always
(ometimes
Barely
Never
business handled
number of respondents
always
36Q
sometimes
65Q
rarely
/6Q
never
/5Q
65Q 46Q 45Q 26Q 25Q 65Q
36Q 35Q /6Q
36Q
/5Q
/6Q /5Q
6Q 5Q
always
sometimes
rarely
number of respondents
never
CONCLUSION;
The 65Q respondents answered that their business handled by bankin! eecutives in a timely and efficient manner. The remainin! respondents answered that 36Q, /6Q and /5Q respondents business handled by bankin! eecutives is always, rarely and never in a timely manner.
//. How lon! have you had these accounts in the bank ess than a year
/-2 years
2-9 years
Jore than 9 years
lon! accounts
number of respondents
less than a year
/6Q
/-2 years
35Q
2-9 years
26Q
more than 9 years
25Q
&*,!e+ % +e"%&8e&#" 45Q 26Q
26Q
25Q
25Q
36Q 35Q /6Q /5Q 6Q 5Q
35Q /6Q
number of respondents
CONCLUSION;-
The 26Q of the total number of respondents has account with the bank for 2-9 years. The 25Q number of respondents has more than 9 years with the bank. The 35Q respondents have /-2 years account with the bank. The remainin! /6Q respondents have account with the bank for less than a year.
/3. How would you rate your bank on a scale of 4 $cellent
bank rated ecellent !ood neutral poor
Neutral
number of respondents /6Q 86Q /5Q 5Q
&*,!e+ % +e"%&8e&#" ecellent
!ood
/5Q
86Q
neutral
/6Q
poor
Coor
CONCLUSION;
#rom the survey concluded that 86Q total number of respondents rated that bank is !ood. The /6Q respondents rated ecellent and remainin! /5Q rated the bank is neutral.
/2. )ould you recommend to your ac"uaintances friends, families, collea!ues, etc to open an account with your bank Les
No
recommend to ac"uaintances
number of respondents
yes
95Q
no
35Q
&*,!e+ % +e"%&8e&#"
35Q yes no
95Q
CONCLUSION;
#rom the above chart and table, the 95Q number of respondents answered yes they will recommend to their ac"uaintances to open an account with their bank. The remainin! 35Q respondents answered no.
/4. )hich of the followin! associations do you have with the bank %ankin!
95Q
@redit cards
oans
Investin!
associations
number of respondents
bankin!
86Q
credit cards
6Q
loans
/5Q
investin!
6Q
others
6Q
*thers
86Q
85Q 15Q 65Q 45Q 25Q 35Q
/5Q 6Q
/5Q 5Q
bankin!
credit cards
6Q
loans number of respondents
investin!
6Q
others
CONCLUSION;
The 86Q numbers of respondents have their bankin! associations with their bank. The /5Q respondents have their loan associations. The remainin! 6Q each is of investin!, credit cards and others associations with their bank.
/6. )ould you like su!!est any chan!es or improvement in any service or any feature of the bank
chan!es or improvement
number of respondents
yes
46Q
no
66Q
&*,!e+ % +e"%&8e&#"
46Q 66Q
yes no
CONCLUSION;
#rom the above table and chart we can see that the 46Q of the respondents answered yes and the remainin! 66Q answered no for su!!estion related to the chan!es or improvement in
any service or any feature of the bank.
CHAPTER NO. FINDINGS> SUGGESTIONS AND CONCLUSION S*e"#$%&" Accordin! to this report on banker customer relationship reveals various shortfalls and su!!estions from various customers. The followin! !ives the problems are critically dealt with and su!!estions have been !iven which may prove fruitful in solvin! them, if not all, some of problems of the customers in the banks. /. #irstly, the commercial banks are a bit reluctant to co-operate the customers and pay less attention to the small customers. This discoura!es the small customers to deposit their small savin!s in banks. The mobili+ation of small savin!s is very useful for the economic development of the nations. Hence, small customers should not be discriminated a!ainst by the bankers and specific facilities should be provided for these so called small customers. 3. The net thin!, which the customers epect from the bankers, is the "uick and fair service. The customers mainly !rumble about the delay in services and the unfriendly attitude of the employees. #or this purpose hi!hly "ualified, more eperienced and creative staff that can work with complete sense of responsibility and involvement is re"uired that can create bankin! habit with the customers. 2. @ustomers prefer to take advances from their provident funds rather than from banks due to hi!h rate of interest and complicated formalities. Crovidin! advances easily and reducin! the formalities included in !ettin! them can solve this. At least commercial banks should !ive reasonable overdrafts to their clients in turn of special need. 4. @ustomers !et annoyed when bank employees discriminate them a!ainst by the bank employees. $mployees chat with each other while customer at the counter waitin! to be served. All this causes unnecessary delays. These drawbacks cannot be removed until and unless inner conscience of the employees is chan!es. @reatin! and developin! interest in the employees towards their ;obs and providin! proper trainin! can do it. 6. (ome of the customers are not satisfied with the bankin! hours because the present bank hours are collidin! with their office hours. This causes inconvenience to them. This problem can be solved by increasin! the workin! hours of the bank or by automation of the whole of work as done by I@I@I %ank. 1. Jany customers !ive complaints and their complaints are not bein! taken into consideration, wherever the customers lod!e a complaint the same should be treated sympathetically and proper time should be taken into such complaints. Cahwa, Janvinder (in!h 3555, =@ustomer %anker Belationship>, Indian %ankin! in the New Jillennium, B%(A Cublishers, pp /0-38 8. As previously discussed, many customers feel troubled by the bank strikes in the present times when banks have become indispensable such irresponsible activities should end and bank strikes should be discoura!ed.
C%&c/*"$%&"
