PIB1013 CHAPTER 2 Banker-Customer Relationship Quiz

What is the definition of a banker according to Section 4(a) of BAFIA?

• Only accepts deposits from the public

• Only provides finance to customers

• Receives deposits, pays or collects cheques, and provides finance

• Accepts deposits and issues loans

Answer explanation

According to Section 4(a) of BAFIA, a banker receives deposits, pays or collects cheques, and provides finance.

Who is considered a customer of a bank?

• A person/company/entity with an account at the bank

• Someone who has never visited the bank

• Any person who walks into a bank

• Only individuals with high account balances

Answer explanation

A customer of a bank is considered to be a person/company/entity with an account at the bank, making the correct choice the one stating 'A person/company/entity with an account at the bank'.

What type of relationship exists between a banker and a customer when the customer avails a loan or an advance?

• Trustee Relationship

• Debtor and Creditor Relationship

• General Relationship

• Special Relationship

Answer explanation

When a customer avails a loan or an advance from a banker, the type of relationship that exists between them is a Debtor and Creditor Relationship.

In the banker-customer relationship, what happens when a customer has a deposit account with the bank?

• The customer becomes the lender and the banker becomes the borrower

• The customer becomes the agent and the banker becomes the principal

• The customer becomes the borrower and the banker becomes the lender

• The customer becomes the trustee and the banker becomes the beneficiary

Answer explanation

In the banker-customer relationship, when a customer has a deposit account with the bank, the depositor is the lender, and the banker is the borrower.

What is the reason for terminating the relationship between a banker and a customer when the customer is declared bankrupt?

• Voluntary Termination

• Insanity of the Customer

• Death of the Customer

• Bankruptcy of the Customer

Answer explanation

The reason for terminating the relationship between a banker and a customer when the customer is declared bankrupt is due to the liquidation of the company, as the bankruptcy indicates financial insolvency and inability to meet obligations.

What is the duty of a banker with regards to receiving money and collecting cheques for the customer's account?

• Duty of secrecy regarding customer's accounts

• Duty to receive money

• Duty to honour customer's cheques

• Duty to disclose forgeries

Answer explanation

The duty of a banker with regards to receiving money and collecting cheques for the customer's account is to receive money.

What is the right of a customer in the banker-customer relationship?

• Right to repayment

• Right to commission/service charge

• Right to set-off

• Right to interest

Answer explanation

In the banker-customer relationship, the right to repayment is a fundamental right of the customer. This includes the right to have their deposits repaid on demand.

When does the banker's position become that of a trustee?

• When the bank receives money or valuable securities

• When the bank receives a garnishee order

• When the bank collects cheques for customers

• When the bank secures advances with tangible securities

Answer explanation

The banker's position becomes that of a trustee when the bank receives money or valuable securities.

What is the reason for terminating the relationship between a banker and a customer when the customer passes away?

• Death of the Customer

• Bankruptcy of the Customer

• Insanity of the Customer

• Voluntary Termination

Answer explanation

The reason for terminating the relationship between a banker and a customer when the customer passes away is due to the death of the customer.

What is the duty of a customer in the banker-customer relationship?

• Duty to honour customer's cheques

• Duty to receive money

• Duty to take reasonable care in drawing cheques

• Duty to disclose forgeries

Answer explanation

Duty to take reasonable care in drawing cheques, and disclosed forgeries when he/she aware of it