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🏦 JAIIB PPB Banker-Customer Relationship 20 cards
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PPB Capsule Cards FREE Banker-Customer Relations…
When a customer opens a savings or current deposit account with a bank, what is the primary legal relationship established?
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The Bank is the Debtor, and the Customer is the Creditor.
Continuation:
Since the customer lends money to the bank, the bank owes the money back. The customer has no security from the debtor (bank).
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165 Views
Relationship: Deposit Account
Banker-Customer Relationship 165
WA 165
PPB Capsule Cards FREE Banker-Customer Relations…
What is the banker-customer relationship when the bank grants a loan or advance to the customer?
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The Bank is the Creditor, and the Customer is the Debtor.
Continuation:
Lending is the core activity of banks. The borrower executes documents and offers security to the bank before utilizing the credit facility.
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120 Views
Relationship: Loan Account
Banker-Customer Relationship 120
WA 120
PPB Capsule Cards FREE Banker-Customer Relations…
What is the legal relationship between the bank and customer when valuables are deposited for safe custody?
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The Bank is the Bailee, and the Customer is the Bailor.
Continuation:
Governed by Sec 148 of the Indian Contract Act. The bank becomes the custodian and is liable for any loss caused due to its negligence.
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113 Views
Relationship: Safe Custody
Banker-Customer Relationship 113
WA 113
PPB Capsule Cards FREE Banker-Customer Relations…
When a bank provides a safe deposit locker to a customer, what specific relationship is formed?
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The Bank is the Lessor, and the Customer is the Lessee.
Continuation:
Governed by Sec 105 of the Transfer of Property Act. The bank is not liable for loss from natural calamities, only for its own negligence/fraud.
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109 Views
Relationship: Safe Deposit Locker
Banker-Customer Relationship 109
WA 109
PPB Capsule Cards FREE Banker-Customer Relations…
In a pledge transaction where goods are kept as security, what is the relationship between the bank and the borrower?
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Bank is the Pawnee (Pledgee), Customer is the Pawner (Pledger).
Continuation:
A pledge involves actual or constructive delivery of goods to the bank as security for a debt.
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106 Views
Relationship: Pledge
Banker-Customer Relationship 106
WA 106
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PPB Capsule Cards FREE Banker-Customer Relations…
If a customer deposits a cheque into their account for collection, what role does the bank play during the clearing process?
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The Bank acts as an Agent, and the Customer is the Principal.
Continuation:
According to Sec 182 of the Indian Contract Act. This relationship terminates upon death, insolvency, or lunacy of the customer.
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93 Views
Relationship: Cheque Collection
Banker-Customer Relationship 93
WA 93
PPB Capsule Cards FREE Banker-Customer Relations…
When immovable property is given as security for a loan, what relationship is established?
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The Bank is the Mortgagee, and the Customer is the Mortgagor.
Continuation:
Mortgages apply to real estate and immovable assets. The bank holds the interest in the property until the loan is repaid.
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65 Views
Relationship: Mortgage
Banker-Customer Relationship 65
WA 65
PPB Capsule Cards FREE Banker-Customer Relations…
For a vehicle loan where the vehicle remains in the possession of the borrower, what is the relationship?
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The Bank is the Hypothecatee, and the Customer is the Hypothecator.
Continuation:
Unlike a pledge, possession remains with the customer (borrower) in hypothecation, though the bank has a charge over the asset.
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61 Views
Relationship: Hypothecation
Banker-Customer Relationship 61
WA 61
PPB Capsule Cards FREE Banker-Customer Relations…
What is the fundamental difference between Demand Deposits and Time Deposits in banking?
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Demand deposits are payable on demand (low/no interest), Time deposits are repaid after a fixed expiry period (higher interest).
Continuation:
Current and Savings accounts are demand deposits. FDs, RDs, and Short-term deposits are time deposits.
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59 Views
Demand vs Time Deposits
Banker-Customer Relationship 59
WA 59
PPB Capsule Cards FREE Banker-Customer Relations…
When does the law of limitation begin to run for a bank deposit (both demand and fixed deposits)?
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It begins only when a demand for repayment has been made by the customer.
Continuation:
Unlike typical debts where limitation starts immediately, deposit limitation starts strictly upon the customer's demand for withdrawal/repayment.
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58 Views
Law of Limitation: Deposits
Banker-Customer Relationship 58
WA 58
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PPB Capsule Cards FREE Banker-Customer Relations…
As per KYC norms and PMLA 2002, who exactly qualifies as a 'Customer' of a bank?
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A person/entity maintaining an account, executing a transaction, or the beneficial owner behind a transaction.
Continuation:
It includes non-account holders doing walk-in transactions (like high-value DDs) and professional intermediaries acting on someone's behalf.
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48 Views
Definition of Customer (KYC)
Banker-Customer Relationship 48
WA 48
PPB Capsule Cards FREE Banker-Customer Relations…
When a bank issues a duplicate demand draft to a customer who lost the original, what relationship is established?
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The Bank is the Indemnified (Indemnity Holder), and Customer is the Indemnifier.
Continuation:
Governed by Sec 124 of Indian Contract Act. The customer promises to compensate the bank against any loss from the duplicate issuance.
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46 Views
Indemnity Relationship
Banker-Customer Relationship 46
WA 46
PPB Capsule Cards FREE Banker-Customer Relations…
Under which specific Act and Section is 'Banking' defined as accepting deposits from the public for the purpose of lending or investment?
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Sec 5(b) of the Banking Regulation Act, 1949.
Continuation:
Crucial exam point: Companies accepting deposits only for trading/manufacturing are NOT banks. Deposits must be repayable on demand or otherwise.
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43 Views
Definition of Banking
Banker-Customer Relationship 43
WA 43
PPB Capsule Cards FREE Banker-Customer Relations…
What relationship exists between the bank and the payee of a demand draft before the draft is presented for payment?
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The Bank is the Trustee, and the Payee is the Beneficiary.
Continuation:
The bank holds the funds specifically for the beneficiary. In a known case, if a bank fails before a purchased draft is paid, preferential refund applies.
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40 Views
Relationship: Payee of a Draft
Banker-Customer Relationship 40
WA 40
PPB Capsule Cards FREE Banker-Customer Relations…
What is an Escrow account in banking, and when is it primarily used by customers?
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An account where funds/documents are held by the bank until specific conditions of a transaction are fulfilled.
Continuation:
The bank acts as a trustee or escrow agent. Used heavily in mergers, acquisitions, and real estate to protect both buyers and sellers.
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39 Views
Escrow Account Definition
Banker-Customer Relationship 39
WA 39
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PPB Capsule Cards FREE Banker-Customer Relations…
When a bank pays utility bills or insurance premiums on behalf of the customer via standing instructions, what is the relationship?
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The Bank acts as an Agent, and the Customer is the Principal.
Continuation:
Ancillary services like payment of bills, taxes, and subscriptions are classic examples where the bank acts as an agent.
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35 Views
Relationship: Standing Instructions
Banker-Customer Relationship 35
WA 35
PPB Capsule Cards FREE Banker-Customer Relations…
If a customer mistakenly leaves an umbrella or a document on the bank counter, what is the bank's responsibility?
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The Bank acts as a Trustee for the Beneficiary (Customer).
Continuation:
The bank has a fiduciary duty to safely keep the forgotten items and return them to the rightful owner.
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35 Views
Relationship: Articles Left by Mistake
Banker-Customer Relationship 35
WA 35
PPB Capsule Cards FREE Banker-Customer Relations…
If money is deposited by a customer but no specific instructions are given for its disposal, how does the bank hold these funds?
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The Bank holds it as a Trustee, and the Customer is the Beneficiary.
Continuation:
The bank cannot use these specific funds for its own lending until proper deposit instructions are provided.
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34 Views
Relationship: Uninstructed Money
Banker-Customer Relationship 34
WA 34
PPB Capsule Cards FREE Banker-Customer Relations…
What is the core underlying legal nature of the relationship between a banker and a customer?
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It is fundamentally a contractual relationship.
Continuation:
Because it is contractual, any person competent to contract (major, sound mind, not disqualified by law) can open a deposit account.
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33 Views
Banker-Customer Contract
Banker-Customer Relationship 33
WA 33
PPB Capsule Cards FREE Banker-Customer Relations…
What is it called when banks tie up with other companies to sell Mutual Funds, Insurance, and Demat accounts?
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Third Party Products Sale (Bancassurance/Cross-selling).
Continuation:
A major source of non-interest fee income for banks. Demat requires a DP tie-up, while Trading requires a Stock Broker tie-up.
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32 Views
Third Party Products
Banker-Customer Relationship 32
WA 32
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Banker-Customer Relationship — JAIIB PPB Capsules

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All 20 cards on this page
Relationship: Deposit Account When a customer opens a savings or current deposit account with a bank, what is the primary legal relati… Relationship: Loan Account What is the banker-customer relationship when the bank grants a loan or advance to the customer? Relationship: Safe Custody What is the legal relationship between the bank and customer when valuables are deposited for safe custo… Relationship: Safe Deposit Locker When a bank provides a safe deposit locker to a customer, what specific relationship is formed? Relationship: Pledge In a pledge transaction where goods are kept as security, what is the relationship between the bank and… Relationship: Cheque Collection If a customer deposits a cheque into their account for collection, what role does the bank play during t… Relationship: Mortgage When immovable property is given as security for a loan, what relationship is established? Relationship: Hypothecation For a vehicle loan where the vehicle remains in the possession of the borrower, what is the relationship? Demand vs Time Deposits What is the fundamental difference between Demand Deposits and Time Deposits in banking? Law of Limitation: Deposits When does the law of limitation begin to run for a bank deposit (both demand and fixed deposits)? Definition of Customer (KYC) As per KYC norms and PMLA 2002, who exactly qualifies as a 'Customer' of a bank? Indemnity Relationship When a bank issues a duplicate demand draft to a customer who lost the original, what relationship is es… Definition of Banking Under which specific Act and Section is 'Banking' defined as accepting deposits from the public for the… Relationship: Payee of a Draft What relationship exists between the bank and the payee of a demand draft before the draft is presented… Escrow Account Definition What is an Escrow account in banking, and when is it primarily used by customers? Relationship: Standing Instructions When a bank pays utility bills or insurance premiums on behalf of the customer via standing instructions… Relationship: Articles Left by Mistake If a customer mistakenly leaves an umbrella or a document on the bank counter, what is the bank's respon… Relationship: Uninstructed Money If money is deposited by a customer but no specific instructions are given for its disposal, how does th… Banker-Customer Contract What is the core underlying legal nature of the relationship between a banker and a customer? Third Party Products What is it called when banks tie up with other companies to sell Mutual Funds, Insurance, and Demat acco…
Chapters in this paper
Banker-Customer Relationship Principles of Lending, Different Types of Borrowers, and Types of Credit Facilities Essentials of Bank Computerisation Ethics, Business Ethics & Banking: An Integrated Perspective AML- KYC Guidelines Appraisal and Assessment of Credit Facilities Operational Aspects of CBS Environment Ethics at the Individual Level Operational Aspects of KYC Operational Aspects of Loan Accounts Alternate Delivery Channels – Digital Banking Ethical Dimensions: Employees Opening Accounts of Various Types of Customers Types of Collaterals and their Characteristics Data Communication Network and EFT Systems Work Ethics and the Workplace
Modules in PPB
MODULE A: General Banking Operations MODULE B: Functions of Banks MODULE C: Banking Technology MODULE D: Ethics in Banks and Financial Institutions
JAIIB papers
IE-IFS — Indian Economy & Indian Financial System PPB — Principles & Practices of Banking AFM — Accounting & Financial Management for Bankers RBWM — Retail Banking & Wealth Management
Study formats
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