Banking Law Assignment

What type of relationship is the banker-customer relationship and what are some of its characteristics

The banker-customer relationship is considered as the primary relationship in the world of banking. At the same time, it is regarded as the most difficult and complex one as the bank or banking business offers number of services to customers and this feature changes the nature of the relationship. It is important to note that the following relationship is primarily based on the principle of the contract as both parties (the banker and the customer) enter into the agreement to obtain financial services. To understand this complicated nature, it is wise to define the banker and the customer. In other words, who is the banker and who is the customer.

The definition of the banker is clearly portrayed in the Australian legislation. According to the Banking Act 1959 (Cth), the banker (or the banking business) is someone who consists of banking within the meaning of Paragraph 51 (XX) of the Constitution . Also it is someone who is in the organisation carried by a corporation and moreover, it is someone who carries out activities like taking money and deposits, making advances of money and engaging in other financial activities suggested by the regulation .

One must appreciate that the definition of customer can be simple as someone who uses financial services provided from the bank. Yet, not everyone who use services from the bank fit the definition of the customer in the banker-customer relationship. According to the case called Woods v Martin Banks, it defines the customer as someone who opens the account to the bank. Since the banker-customer relationship can be defined as the contract, by making the agreement and opening an account to the bank is sufficient to create the relationship with the bank . As a result of this, it can be stated that that individual is recognised as the ‘customer’ of the bank.

There are number of relationships exist in between the banker...