Definition of Banks & Customers

Definition of Bank

Under section 5(b) of Banking Regulations Act, ‘Banking’ is defined as “accepting deposit from the public for the purpose of lending or investment, repayable on demand or otherwise, and withdrawable by a cheque, draft, Payorder or otherwise”. A ‘banker’ is thus an institution dealing with the public money. Section 8 prohibits trading activities by a banker.

Banking services include  

i) Collecting cheques,

ii) Purchasing local / foreign currency / bills, and

iii) Carrying out standing instruction for clients.

Other ancillary services rendered by banks 

(a)  Remittance of funds

(b)  Credit cards, debit cards and atm cards

(c)  Performance and financial guarantees

(d)  Safe custody of securities

(e)  Safe deposits vault

(f)   Purchase / sales of securities

(g)  Collection of interest on securities

(h)  Executor & Trustee

(i)    Personal Tax, Assistance, preparing IT/STWT Returns

(j)    Investment facilities – underwriting, banker to issues, etc.

(k)  Travellers Cheques / Gift Cheques/gift cards/travel cards

(l)    Sale of Units of UTI.

(m)  RBI Bonds and Mutual funds.

Who is a ‘Customer’?

A ‘Customer’ is a person having bank account in his name and for whom ‘banker’ undertakes to provide facilities as banker and whose dealings with ‘banker’ is relating to business of ‘banking’.

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