Question

Explain the relation between the bank and its customers.

Answer 1

1)Debtor and Creditor Relationship: When a customer deposits money with a bank the relationship of debtor and the creditor will be established, in this case, Banker is the Debtor and Customer is the Creditor.

2)Creditor and Debtor: When a bank grants loan and other credit facilities to the customer, the relationship between the banker and customer is reversed, that is Customer is Debtor and Banker is Creditor.

3)Principal and Agent: In some situations, the banker serves as an agent of the customer (principal).