Explain three duties of a bank to its customers
Duties of a bank to its customers
- Duty of care: it’s bound to exercise reasonable care and skill in its dealings with the customers. The standards of care and skill are that of a reasonably competent, if the bank fails to exercise such care and skill, the customer has am action in damages for any loss arising for professional negligence.
- Professional advice: the bank is bound to give the customer professional advice on request he is bound to give advice on investments as and when requested failing which he is liable in damages.
- Duty to honor cheques: is bound to honor all cheques drawn by the customers provided the cheque is complete and regular on the face of it and the customer account has sufficient funds etc.
- Duty of secrecy: is bound to maintain confidentiality in his dealings with customers. He must not discuss to third parties any information which comes to him in the course of his dealings with the customers.
- Duty not to pay without authority: must not pay any monies out of the customer’s account without of his express or implied authority failing which he is liable in damages for breach of duty.
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