BANKING AFFAIRS

Detailed explanation-1: -Customer who borrows money from the bank own money to the bank. In the case of any loan/advances account, the banker is the creditor and the customer is the debtor. The relationship is the first case when a person deposits money with the bank reverses when he borrows money from the bank.

Detailed explanation-2: -the customer is the debtor. The relationship in the first case, i.e. of a person depositing money with the bank reverses when he borrows money from the bank. Therefore, when it comes to loans and advances, it is the creditor-‐debtor relationship which prevails between the banker and the customer.

Detailed explanation-3: -Relationship of pledger and pledgee When a customer pledges an article (goods and documents) with the banker as a security for the payment of debt or performance of the promise, the customer becomes a pledger and the banker becomes the pledgee.

Detailed explanation-4: -The legal relationship between a customer and the bank is based on contract and is generally classified as a debtor-creditor relationship. This means that when a bank or other type of ADI accepts money from a customer it does so as a borrower on terms that may be implied.

Detailed explanation-5: -Then the bank takes the position as a creditor of the customer and the customer becomes a debtor of the bank. Borrower executes documents and offer security to the bank before utilizing the credit facility. Therefore, the general relationship between bank and its customer is that of a debtor and a creditor.