The term “customer” of a bank has not been defined by any law. According to Sir John Paget, “to constitute a çustomer there must some recognisable course or habit of dealing in the nature of regular banking business”.
According to this view, to constitute a customer of a bank, a person has to satisfy two : conditions. Firstly, there should be some recognisable or habit of dealing between him and the bank and secondly, the transactions should be in the nature of regular banking business. i.e., frequency of transactions is expected. The above j view has been emphasised by Dr. Herbert L. Hart. According to him” a customer is one who has an account with a bankeror for whom a banker habitually undertakes to act as such”.
However, this view of duration theory has been rejected and in its place, a new idea has been developed.In Central Bank of India Ltd, Bombay Vs V. Gobinathan Nair and others, the Kerala High Court has observed as follows: “so far as banking transactions are concerned, a customer is a person whose money has been accepted on the footing that the banker will honour upto the amount standing to his credit, irrespective of his connection being of short or long standing”. Thus, in order to constitute a person as a customer, he should satisfy the following conditions:
(1) He must have an account in the bank i.e., Savings Bank A/c, current A/c or Fixed Deposit account.
(2) The transactions between the banker and the customer should be of banking nature, i.e., a person who comes to the bank for operating safe deposit locker or for purchasing a Demand Draft or travellers cheque is not
a customer of the bank, since such transactions are not banking transactions.
(3) Frequency of transactions is not necessary though anticipated.
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