Difference between the banker and the customers.
Commercial banks render a great deal of services to their customers. The relationship between banker and a customer can be expressed under the following angles:
I. Bankers and customers act as debtor and creditor. When a customer deposits his surplus saving with a bank, he acts as a creditor to the bank. Similarly when bank advances loans to customers, it acts as a creditor before the customer.
II. Banker acts as a trustee because it acts as the custodian of customers money. A trustee is a person who holds money for some other person called beneficiary. Banks act as a trustee of customer’s money who act as the beneficiary.
III. A banker is regarded as agent of the customer and as such performs a great deal of agency functions. As an agent of the customer, it makes collection of cheques, making payment of tax on customer’s behalf.