BANKING AFFAIRS

Detailed explanation-1: -a) Banker is only a debtor in respect of customer’s money: taken loan or any other form of financial accommodation from the banker, the customer becomes the debtor and the banker becomes the creditor.

Detailed explanation-2: -Relationship as Debtor and Creditor The customer when deposits his money into his bank account, becomes a creditor because he is giving his money to the bank indirectly. The money deposited by the customer in the bank account becomes the bank’s property.

Detailed explanation-3: -While taking physical possession of securities the bank becomes bailee and the customer bailor. Banks also keep articles, valuables, securities, etc., of their customers in Safe Custody and act as a Bailee. As a bailee, the bank is required to take care of the goods bailed.

Detailed explanation-4: -According to the Negotiable Instruments Act 1881, a bill of exchange is defined as “an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument”.