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Lesson 12 |
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Banks and their customers |
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Why is there no risk to the customer when a bank prints the customer's name on his cheques? |
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When anyone opens a current account at a bank, he is lending the bank money, |
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repayment of which he may demand at any time either in cash or by drawing a cheque in favour of another person. |
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Primarily, the banker-customer relationship is that of debtor and creditor -- |
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who is which depending on whether the customer's account is in credit or is overdrawn. |
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But, in addition to that basically simple concept, |
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the bank and its customer owe a large number of obligations to one another. |
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Many of these obligations can give rise to problems and complications but a bank customer, unlike, say, a buyer of goods, |
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cannot complain that the law is loaded against him. |
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The bank must obey its customer's instructions, and not those of anyone else. |
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When, for example, a customer first opens an account, he instructs the bank to debit his account only in respect of cheques drawn by himself. |
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He gives the bank specimens of his signature, and there is a very firm rule |
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that the bank has no right or authority to pay out a customer's money on a cheque |
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on which its customer's signature has been forged. |
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It makes no difference that the forgery may have been a very skillful one: |
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the bank must recognize its customer's signature. |
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For this reason there is no risk to the customer in the practice, adopted by banks, of printing the customer's name on his cheques. |
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If this facilitates forgery, it is the bank which will lose, not the customer. |