BANKER-CUSTOMER RELATIONSHIP | JAIIB PPB 2023 SHORT FREE NOTES
The upcoming JAIIB exams are going to be held in May 2023 this year. We truly hope that IIBF will issue & conduct the May 2023 JAIIB Exams once as per the schedule that will be issued by it and there will be no postponements. And as the JAIIB November 2023 Syllabus might change for the exams, candidates should put their maximum effort into clearing the JAIIB this May 2023 once and all.
The reason is that the brief details that the institute has issued so far, have all but established the fact that the new syllabus is vaster than the old one. So, you should tighten up your preparations beforehand and also go through the notes given below to help in covering your syllabus.
You can also check the detailed syllabus of all the papers of JAIIB by clicking on the link here.
MAY PPB 2023 SHORT NOTES:-
JAIIB PPB Principles and Practices of Banking:
|Short Free Notes Part-1|
|Short Free Notes Part-2|
|Short Free Notes Part-3|
MODULE B – FUNCTIONS OF BANKS
UNIT – 12: BANKER-CUSTOMER RELATIONSHIP
Bank: Either a partnership firm that has less than or a maximum of 10 partners or a company that has been incorporated in the Indian Companies Act 1956 of Indian Companies Act 2013 can work as a bank.
Relation between customer and Bank:
Creditor and Debtor: When a customer deposits money with the bank, the customer is referred to as a lender and the bank is referred to as the borrower, thereby establishing the relationship between creditor and debtor.
Debtor and Creditor: When a bank lends money to the customer, the bank is referred to as a lender and the customer as a borrower, thus, having a relationship of debtor and creditor respectively.
Customer and Trustee: When customers deposit their valuables, securities, bonds, or any other document valuable to them with the bank for safe custody, the relationship of bailor and bailee is established as well as of a customer and trustee.
Principal and agent: When a bank performs services on behalf of the customers such as remittances, cheque collections, bill collections, etc, the bank is said to be working as an agent for its principal i.e customer.
Lessee and lesser: The services of safe deposit lockers provided to the customers of the bank on a lease basis create the relationship between the lessee and lessor.
Indemnifier and indemnified: This kind of relationship between customer and Bank is formed when one party promises the other party to save them from any loss that will be caused by the conduct of the promisor. Indemnify is the one who will ultimately bear the loss and indemnified is the one who holds the indemnity.
Financial intermediaries: Merchant bankers work as financial intermediaries for the reason that they transfer capital from investors or subscribers of the bond to the corporates or government.
UNIT – 13: BANKERS’ SPECIAL RELATIONSHIP
Mandate: It is an unstamped agreement through which the account holder authorizes a third person to do certain acts on his or her behalf.
Power of attorney (POA): Non-individuals cannot issue a mandate, therefore they work with power of attorney. POA is a legal document that is properly stamped and it is executed in the presence of a magistrate, notary public, or an authorized government official. It is executed by one person who is known as the donor, the principal, in the favour of another person who is referred to as donee, agent, to act on behalf of the donor, as per the authority provided or given in the document.
Donor & done: The issuer of power of attorney is called a Donor and the person to whom it is given is called the donee.
General/universal or Special POA: General power of attorney is used to act to do more than one transaction. Special/limited power of attorney is used for one transaction.
Garnishee order: When a court passes an order in a judgment, directing not to release the money belonging to the judgment debtor (in the hands of his [judgment debtor] debtors) in the hands of his bank until directed by the court to do so.
Cheques that get presented after the bank is serviced with garnishee order should be returned after putting the “refer to drawer” remark.
Cases when Garnishee Order is not bound:
In case a bank has the prior right to set off, it will not be bound by the garnishee order of the court.
In case a lien has been marked on the fixed deposit receipt (FDR), it cannot be attached by a garnishee order. But in case there is an excess over the lien, that excess will be attached by the garnishee order.
Credits that are received after garnishee order or not attachable because of the fact that the debts which are due or are going to accrue at the time of acceptance of order can only be attached.
In the joint accounts, a garnishee order cannot be attached by using the “either-or survivor clause” if the order has been issued in the name of a single person from the joint accounts.
The account of Trust cannot be attached with the order of garnishee.
If a customer has more than one account and one account is in credit and the other is in debt, only if the net balance is in the credit then the garnishee order can be attached.
Garnishee order versus attachment order:
Court orders to recover certain debts are called garnishee orders and orders which are issued by the revenue authorities are known as attachment orders.
You can also visit the below links:
- IIBF JAIIB Ethics in Banks and Financial Institutions
- Functions of Banks
- Promotion | Role of Promotion In Marketing
- IIBF JAIIB PPB QUESTION PDF
- PPB Syllabus Priority