The Right and Responsibilities of a Bank to Their Customers

The Right and Responsibilities of a Bank to Their Customers

ABSTRACT

This is research on the right and responsibilities of banks to their customers. The research sort to know the bank right and responsibilities to their customers which has bee in existence in banking operation and has been felt by the people and to the extent, their objectives have been achieved.

In carrying out this research the researcher made use of oral interviews, questionnaires and library and the finding were rights and responsibilities of banks to their customers, which has been felt through many areas of their promotional activities such as loan advancement.

It has been finding out that banks charges commission to their customers, banks accept money from their customers, and banks turn irregular instrument to their customers, all his has been greatly achieved through bank and customers relationship.

Therefore, it was at this base that the researcher concluded that banking operation has been appreciated by the people and customers objectives have been achieved greatly.

TABLE OF CONTENT

1.0 CHAPTER ONE

1.1 BACKGROUND OF THE STUDY

1.2 STATEMENT OF THE PROBLEM

1.3 OBJECTIVES OF THE STUDY

1.4 SIGNIFICANCE OF THE STUDY

1.5 LIMITATION OF THE STUDY

1.6 DEFINITION OF TERMS

2.0 CHAPTER TWO

2.1 LITERATURE REVIEW

2.2 CAUSES OF BANK FRAUD

2.3 CONTROL OF FRAUD

3.0 CHAPTER THREE

3.1 RESEARCH DESIGN OR METHODOLOGY

3.2 SOURCES OF DATA (SECONDARY ONLY)

3.3 LOCATION OD DATA

3.4 METHOD OF DATA COLLECTION

4.0 CHAPTER FOUR

4.1 SUMMARY OF FINDING

5.0 CHAPTER FIVE

5.1 RECOMMENDATION AND

5.2 CONCLUSION

CHAPTER ONE

BACKGROUND OF THE STUDY

Banking operation in Nigeria has gone through very dramatic changes within this decade. The bank has grown beyond optimistic expectations. Over the period, the number of banks expanded fivefold, the variety of banks increased, banking operations were substantially deregulated, competition increased and banks were forced to be more innovative and service-oriented.

This has made the researcher go in for the topic of the rights and responsibilities of banks to their customers. The banks right to their customers are to charge a commission to their customers for service render to them, banks return irregular instrument like unpaid cheques, which are not properly drawn, also banks return cheques exceeding authorized overdraft, this is customers which want to make overdraft facilities but the customer did not come with the duration and so banks will return the cheque exceeding the overdraft.

And some of banks responsibilities to their customers are: to paycheques to their customer’s banks receive money from their customers, banks give reasonable notice before closing credit account of customers. All this has made the baking operation to be well structure and service-oriented. When banks have many funds in their banks the right and responsibilities are fully achieved.

As a matter of fact, between 1947-1952 a total of 22 banks were registered by Nigeria according to the study concluded by the C.B.N. of Nigeria but within four years because they cannot meet up with their rights and responsibilities they well all out of duty (Distress).

STATEMENT OF THE PROBLEM

A bank is s financial institution, which provides minimum banking services and is licensed as a bank by the federal government of Nigeria as a financial institution. These banks are duly bound to possess their rights and responsibilities to their customers but as a matter of fact, there are some withstanding problems which come across the banking operation, some of which are:

Lack of funds when customers or banks balance or overdraft is not sufficient to cover his cheques the bank is not liable to pay the customers cheques.

Customers Death: The death of a customer cancels all mandates and authorities relating to his account, the banker may receive express or constructive notice of his customer’s death and in either case, no further cheques must be honoured.

The bankruptcy of customers where notice of presentation of a bankruptcy petition against the customer has been received by the banker, cheques should not be paid.

Forged signature: Banks faced problems from customers who forged signatures to receive money from the bank, when the signature is not related or look-alike like the drawer signature, the banks disregard the cheque.

Irregularity in the drawing of cheques demands during non-banking hours-banks does face a problem from their customers who make demand during non-existing hours of the day.

OBJECTIVES OF THE STUDY

The objectives that made the researcher go into this topic.

The rights and responsibilities of a bank to their customers are as follows:

Banks right to their customers.

i) To charge a reasonable commission for services.

ii) Rights to return irregular instruments.

ii) Right to return cheques exceeding authorized overdraft.

The researcher wants to find out how banks charges commission to their customers.

To find out why banks return the irregular instrument.

To find out why banks return cheques exceeding authorized overdraft.

Banks responsibilities to their customers are:

i) To paycheques

ii) Banks receive customers’ money.

iii) Banks give reasonable notices before closing customers’ credit account.

iv) Banks has the responsibility to keep the affaire of the customer secret (Duty of secrecy).

The researcher wants to find out the responsibility of a bank to their customers. They are:

1. To find out how banks pay their cheques to their customer.

2. To find out whether banks receive customers’ money.

3. To find out whether banks give reasonable notice before closing a customer’s credit account.

4. To look for or how banks take care of their customers.

5. To find out whether banks keep the affair of their customers secret is the duty of secrecy.

RESEARCH QUESTIONS

To attain the following objectives, the researcher is expected to employ or ask the following research question:

v How do banks receive customers’ money.

v What is the irregular commission that banks charges to their customers

v What causes banks to close customers credit account

v Why do banks keep their customer affairs secret.

SIGNIFICANCE OF THE STUDY

According to Willy Nnamani research arises when there are problems to solve, peculiarities or puzzles about phenomena or the question of giving meaning to them. There are many reasons for the study of banks rights and responsibilities to their customer which both banks, customers and country as a whole (communities, individual) have benefited from this study they are:

The study will serve as a means to tackle the problem of lack of funds in banking operation and as a matter of percentage of money or fund is kept in bank to ensure the daily running of banking service to their customers.

Also, this study has enlightened the customers on how to make bank for a loan even on overdraft bases or facilities and how customers can present their collateral to the bank they wish for a loan

Furthermore, this study will help banks to use instruments to evaluate their customers rather than driving them by low-interest rates.

Finally, through the researcher restricted the study right and responsibilities of banks to their customers by rediscounting facilities for stabilization securities, holding will be valuable to bank for finding purpose, subject to conditions that the bank (CBN) may specify from time to time.

DEFINITION OF THE TERMS

What is a bank: This is an association of person or financial institutions incorporated by the federal republic of Nigeria that accepts deposits and renders loans to their customers to make a profit through interest rates they charge to customers.

Banking Institution: This is a body of person whether incorporated or not who carry on the business of banking according to section 2 of the U.K bill of exchange Act 1882 state so.

A Banker: this is a person who receives money on a current or deposit account collect the proceeds of cheques and pays cheques drawn by customers.

Banking Business: This is a business of receiving from the public on current account money which is to be repayable on demand by cheques and making advances to customers.

Customer: This is a person who makes an offer and it is accepted by the organization. The person becomes a customer to the organization, the offer must be made and acceptance must be granted.

Who is a bank customer? This question is difficult to answer because there is no statutory definition of who a bank’s customers are but going by the dictionary definition or the word customer it can note the relationship existing between one person(s) and another as a result of continuous dealing.

BANK AND CUSTOMER RELATIONSHIP: This is when a person (s), firm, company or society etc makes an offer to become a customer, which the bank duly accepts, it can thus be seen that the element of offer acceptance (which is the cardinal issue in the law of contract comes into play in the banker customer relationship.

BANK RIGHT: These are duties obligation which the bank has an authority to operate or does without taken permission, failure or going against the bank obligation eg charging of commission, the duty of secrecy, duty of care etc.

WHAT IS RIGHT: This is what an individual firm or an organization is doing without being necessarily taken permission before doing it.

RESPONSIBILITIES: These are dryly activities one is obliged to perform or a bank performs

BANK RESPONSIBILITIES: This is what banks do daily ie day to day running of the banking.

FINANCIAL INSTITUTION: This is defined under section 61 of the BOFID 1991 as follows any individual body, association or incorporated other than the banks licensed under this decree section 51 of this decree which carries on the business money brokerage and whose principal object include factoring project financing, equipment leasing e.t.c

NON BANKING INSTITUTION: These are financial institutions that are neither banks, insurance companies, nor stockbroking firms but are empowered by the C.B.N. to carry on the business activities as financial intermediaries.