The moment you open an account with a banker, you automatically become a customer of the bank.

There exist a special relationship between the banker and its customer. To fully appreciate this relationship, we must know who truly is a ''banker and customer.


To a layman, ''A banker is a person who works in a bank''. However in legal terms and According to section 2 of the UK bills of exchange Act 1882, '' A banker includes a body of persons whether incorporated or not who carry on the business of banking

What is banking?

Banking was defined in the 1948 Paton commission report  as "the business of receiving from the public on current account money which is to be repayable on demand by cheque and on making advances to customers"

From the above definition, we can conclude that anyone performing the business of banking is a banker.

Bank Customer

The term "bank customer" does not have a legal definition. However, It is generally believed by banking professionals and educators that " a bank customer is a person who opens an account with the banker and for whom the banker continuously undertakes his banking dealings''

Another accepted definition of "bank customer" is as follows: any person (individual, corporate entities) whose dealings with the banker relate to the business of banking is referred to as a bank customer

From the above definition, it could be seen that a bank customer is anybody, who has:

1. Gone to the bank and open a bank account (savings, current, or fixed account).

2. Whose dealings with the banker relates to the banking.

Having defined '' banker'' and ''bank customer'', We turn to the relationship between these two.


A. Relationship as debtor and creditor

When you open an account with a banker, you become his debtor and he becomes your creditor.

As a result, The banker is required to repay a corresponding amount of money when you request it.

However, it is important to note that the debtor-creditor relationship between a banker and a customer differs in the following ways from that of a similar relationship in commercial transactions.

1.  Creditors must demand payment: In ordinary commercial debts, the debtor is required to repay the money on a specific date.

In the case of a bank deposit, however, the banker (the debtor) is not under any obligation to repay the amount on his own accord. The customer (the creditor) must make payment demand, otherwise, there is no payment.

It is for this reason that bankers do not refer to as ordinary debtors

2. Demanded payment must be done at a proper place: Money can be demanded at any time and from any location in ordinary commercial transactions.

In the case of bank deposits, however, the customer (the creditor) can only demand payment in the bank's branch or by electronic means. In addition, the customer must request payment within working hours of the bank, otherwise, such request may be delayed.

It is worth noting that the debtor and creditor relationship between banker and customer can be reversed to creditor and debtor relationship.

For example, when your bank grants you a loan or overdraft, you become the debtor while the banker becomes the creditor.

B. Relationship as trustee and beneficiary

A Banker can also enter into a fiduciary relationship with their customers, similar to that of a trustee.

A trustee is a person who holds money or assets for the benefit of some other person called the beneficiary.

In our society today, we see trustee and beneficiary relationships between the banker and the customer regularly. For example, when you give a banker your valuables to keeps, he acts as trustee to you (the beneficiary)

C. Agent and principal relationship

An agent acts for, or in the place of, another (the principal), by authority from him/her.

In many ways, bankers can and have served as agents for their customers.

First, they act as agents when they pay money to others to honor customer checks.

Second, they function as agents for their customers when they collect checks and other negotiable instruments on their behalf.

Finally, they act as an agent for their consumer, buying and selling securities on their behalf.


1. A banker takes money, checks, and other negotiable instruments from his customers and deposits them into his account for collection

2. Repaying the money in full or in part upon presentation of written authorization or instruction from the customer during banking hours and at the bank where the account is housed.

3. Giving his customer reasonable notice before closing a credit account, so that the consumer has enough time to make new arrangements. It also protects the bank from having to return checks that the customer has already written, avoiding any legal action for reputational damage.

4. Maintaining the confidential relationship or duty of secrecy about his customer's accounts and affairs. This duty of secrecy is, however, limited by the following conditions:

  • The obligation of secrecy does not apply where there is a legal compulsion.
  • When the public's interest is at stake, the duty of secrecy is no longer valid.
  • When a customer instructs the banker to reveal a specific aspect of his bank dealings to a third party, the obligation of secrecy is instantly terminated

Accompanying this duty are some rights of the banker. Here are a few of them.

1. He has an implied right to charge a reasonable commission for its services as well as interest on loans and advances in the country, as determined by banking conventions. It is crucial to remember, however, that the banker's right to charge interest terminates at the death or bankruptcy of the customer.

2. The banker has a general lien over the customer's securities in its possession, such as bills, or checks, promissory notes, dividend warrants, etc. deposited for collection.


1. When drawing a check or other instrument, the customer shall take reasonable and proper precautions to avoid facilitating fraud or forgery.

2. He has the right to ask the bank about the status of his account. Consequentially. he should receive periodic account statements from his banker for his current account.

3.He must pay a reasonable price or charges for the banker's services.

4.  Before issuing a payment order, he must ensure that he has sufficient funds in his account.
Otherwise, the banker may refuse to honor such payment. 

5. Rather than the banker seeking him out, he is to seek out the banker anytime he needs money. 


Like every other thing, the banker-customer relationship can also be terminated. The following are some conditions that can terminate the banker-customer relationship

1. The death of the customer automatically terminates the relationship.

2. The relationship may be terminated if one party files for bankruptcy. When a customer becomes bankrupt, for example, the relationship may be terminated. If a bank fails, the deposit insurance agency of that country (in Nigeria, the NDIC) will cushion the impact of the failure. 

3. Mutual consent between the banker and the customer can potentially end the banker-customer relationship. This, however, is contingent on both parties meeting all legal requirements.

4. In the event of a war, the relationship between the banker and the consumer could be severed or placed on hold.

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