Who is banker?
Posted by Ripon Abu Hasnat on Monday, March 23, 2015 | 0 comments
The
term ‘banker’ refers to a person or company carrying on the business of
receiving moneys, and collecting drafts, for customers subject to the
obligation of honouring cheques drawn upon them from time to time by the
customers to the extent of the amounts available on their current accounts.
There
are differences of opinion regarding the meaning of the term banker. We have discussed
here some of the important ones.
1.
Sheldon H.P.: “The function of receiving money from his
customers and repaying it by honouring their cheques as and when required is
the function above all other functions which distinguishes a banking business
from any other kind of business.”
2.
Sir John Paget: “No person or body corporate or otherwise can
be a banker who does not take deposit accounts, take current accounts, issue
and pay cheques and collect cheques crossed and uncrossed for his customers.”
3.
G. Crowther: “A banker is a dealer in debt, his own and
other people.”
4.
Macleod: “The essential business of banker is to buy
money and debts, by creation of other debts. A banker is therefore essentially
a dealer in debts or credit.”
5.
Dr. H.L. Hart: “A banker or bank is a person or company
carrying on the business of receiving moneys, and collecting drafts, for
customers subject to the obligation of honouring cheques drawn upon them from
time to time by the customers to the extent of the amounts available on their
current accounts.”
6.
Indian Banking Regulation Act: Under Section 5(1)
(b and c) of the Banking Regulation Act 1949, “Banking means the accepting for
the purpose of lending or investment of deposits of money from the public,
repayable on demand or otherwise and withdrawable by cheque, draft, order or
otherwise. Banking company means any company which transacts the business of
banking in India.”
From
the definitions given above, it is clear that if any person or institution
fulfils the following conditions, it will satisfy the definition of a banker or
a banking company.
(a) Accepting of deposits from the public,
repayable on demand or otherwise. The deposits may be of different types,
current, savings, fixed etc.
(b) Such deposits must be withdrawable by
cheques, drafts, order or otherwise.
(c) Any money accepted as deposits must be
for the purpose of lending or investment.
(d) Performance of banking business as the
main business.
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