The relationship between a customer and banker is that of debtor and creditor which is contractual in nature. The contract law is applicable and affects the circumstantial and business relationship between the two. Banker honors the cheques drawn by the customer on his account. Cheque is a bill of exchange by definition and function, therefore the law of negotiable instrument is applicable. Banker provides the service of lockers, safe deposit, and safe custody where the relationship is defined by contract law as “Bailor” and “Bailee”.
Banker accepts money for the purpose of lending and investment. To create a charge and legally receive the right and interest in property and collateral securities, all the above laws are applicable and followed while executing documentation. The banker takes on the role of Pawnee or Mortgagee and the customer becomes “Pawner” or “Mortgagor”. The rights and obligations under these contractual are defined and interpreted under these laws. The following laws and Acts may be applicable in the banking business on case to case and the nature of the relationship between banker and customer.
- Contract law
- Anti Money Laundering Law and FATF recommendations
- Bank Secrecy Act
- Negotiable Instrument Act
- Banking Law
- Company Law
- Partnership Act
- Trust Act
- Mercantile law
- Evidence Law
- Limitation Law
- Advances Recovery Law
