Download Banker-Customer Relations

Module Five: Session One
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Overall Training objective:
 To review the relationship between
Financing Institutions and the road
contractors
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Training outcome
 By the end of the session trainees should:
a) Be able to appreciate the importance of
the relationship between financial
institutions and road construction firms.
b) Understand the need to enhance the
relationship.
c) Be able to identify the various
categories of relationships and to
appreciate them.
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WHAT IS A BANK?
• A bank is any institution carrying on
banking business.
• Banking business is the business of
accepting deposits, accepting money on
current account and investing that money
as the bank sees fit.
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WHO IS A BANK CUSTOMER
?
• A bank customer is any account holder or:
• Someone who seeks the bank's advice or
other services.
• There is no requirement on the number of
transactions that must have passed through
that account.
• There is no requirement as to the duration
for which the account should have existed.
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WHEN DOES THE BANKER CUSTOMER RELATIONSHIP START?
• The banker-customer relationship
commences at the point of opening the
account.
• Other relationship commences when a
customer acquires a credit facility from a
bank
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NATURE OF THE BANKER - CUSTOMER
RELATIONSHIP
The banker-customer relationship is
primarily contractual.
Principally a principal-agent relationship.
Customer (principal) appoints the bank as
his agent/
Other aspects of this relationship include:
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Contd.
Debtor - Borrower Relationship
Bailor-bailee Relationship
Trustee/Beneficiary Relationship
Mortgagor-Mortgagee
Relationship
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DUTIES OF A BANK
• To receive the customer's money and
cheques and other instruments of collection.
• To repay the whole / part of the money upon
presentation of the customer's written
authority.
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DUTIES OF THE BANK • To abide by any express mandate from
his / her customer such as a standing
order.
• To render statements of accounts to his
customer periodically or upon request.
• To maintain secrecy.
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DUTIES OF THE BANK
Exemptions
• The law so compels (court order). .
• Banker has duty to the public e.g. has knowledge of
terrorist activity involving the customer.
• It is in the interest of the banker e.g. where legal
proceedings are required to enforce payments of
an overdraft or CRB.
• Banker has express or implied consent of customer
e.g. (s)he is acting as a referee.
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DUTIES OF THE BANK
1) To honour the customers' cheques that are
presented to the bank;2) To effect stop Instructions (countermand).
3) To honour instruction to pay.
4) To abide by any express mandate from his / her
customer such as a standing orders.
5) To render statements of accounts to his
customer periodically or upon request.
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Duties of the bank
 Banker’s duty of care.
While giving advice
 While posting transactions
 Duty of confidentiality

 Key considerations in establishing the relationship:
Choose a right bank
 Get to know the bank inside procedures
 Avoid multiple borrowing
 Understand the contract terms and conditions
 Read all documents before signing them.

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Termination of Banker Customer
Contract
 The banker customer contract ends once the
customer closes his account.
 Termination by the bank.
 Other ways of termination .
 Express
Notice by the customer
 Death or mental incapacity of customer
 Bankruptcy of a customer
 Termination by Operation of Law
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GROUP DISCUSSIONS
1 Discuss the possible services financial institutions can
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provide to the road contractors.
Discuss an ideal banker-customer relationship.
Describe why banker-customer relationship may be
terminated and the likely consequences of termination.
Discuss the rights and obligations which flow from the
banker – customer relationship.
Identify the key challenges to road contractors in
enhancing the banker – customer relationship and
suggest how they can be addressed.
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