Podcast
Questions and Answers
What is a factor that influences the interest rate charged by a bank?
What is a factor that influences the interest rate charged by a bank?
- The bank's location
- The type of bank branch
- The borrower's creditworthiness (correct)
- The bank's profitability
What is the nature of the relationship between a banker and a customer?
What is the nature of the relationship between a banker and a customer?
- Statutory
- Tortious
- Fiduciary
- Contractual (correct)
Why do banks adjust their interest rates?
Why do banks adjust their interest rates?
- To respond to changes in market conditions or manage credit risk (correct)
- To increase their profitability
- To comply with regulatory requirements
- To attract more customers
What is the basis of the special relationship between a banker and customer?
What is the basis of the special relationship between a banker and customer?
What is the role of a bank when it acts as a trustee?
What is the role of a bank when it acts as a trustee?
What is the right to set-off typically used for?
What is the right to set-off typically used for?
What is the consequence of a bank dishonouring a cheque when the customer has sufficient funds?
What is the consequence of a bank dishonouring a cheque when the customer has sufficient funds?
Under what circumstances may a bank not be able to exercise its right to set off?
Under what circumstances may a bank not be able to exercise its right to set off?
What is the relationship between a trustee and a beneficiary?
What is the relationship between a trustee and a beneficiary?
What type of account may a bank use to offset a debt owed by a customer?
What type of account may a bank use to offset a debt owed by a customer?
What is the purpose of the right to set-off?
What is the purpose of the right to set-off?
What is the result of a customer entrusting their money or assets to a banker?
What is the result of a customer entrusting their money or assets to a banker?
What is a lien in the context of banking?
What is a lien in the context of banking?
What is the primary goal of a banker's duties?
What is the primary goal of a banker's duties?
What is the principle behind a banker's duty to follow customer instructions?
What is the principle behind a banker's duty to follow customer instructions?
What is implied by the banker and customer relationship?
What is implied by the banker and customer relationship?
What is the significance of the banker-customer relationship?
What is the significance of the banker-customer relationship?
What is the consequence of a banker not following a customer's instructions?
What is the consequence of a banker not following a customer's instructions?
What is a key aspect of a banker's duty of care towards customers?
What is a key aspect of a banker's duty of care towards customers?
What is the nature of a banker's duty of secrecy in Malaysia?
What is the nature of a banker's duty of secrecy in Malaysia?
What does Section 133(1) of the Financial Services Act 2013 prohibit?
What does Section 133(1) of the Financial Services Act 2013 prohibit?
What is expected of a banker when carrying out a customer's instructions?
What is expected of a banker when carrying out a customer's instructions?
What is the purpose of a banker's duty of secrecy?
What is the purpose of a banker's duty of secrecy?
Who is bound by the duty of secrecy under the Financial Services Act 2013?
Who is bound by the duty of secrecy under the Financial Services Act 2013?
What is one of the primary benefits of keeping track of finances and ensuring sufficient funds to cover cheques?
What is one of the primary benefits of keeping track of finances and ensuring sufficient funds to cover cheques?
What is a consequence of issuing a cheque without sufficient funds?
What is a consequence of issuing a cheque without sufficient funds?
What is the importance of using cheque forms supplied by the bank?
What is the importance of using cheque forms supplied by the bank?
What should customers consider when issuing cheques to avoid dishonour?
What should customers consider when issuing cheques to avoid dishonour?
What is a benefit of keeping a record of all transactions?
What is a benefit of keeping a record of all transactions?
What is the customer's duty regarding cheques and their account balance?
What is the customer's duty regarding cheques and their account balance?
Flashcards are hidden until you start studying
Study Notes
Banker-Customer Relationship
- The relationship between a banker and customer is contractual in nature, with terms set out in account opening documents and agreements.
- A banker has a legal and ethical duty to act in the best interests of their customer, based on principles of trust and confidence.
Special Relationship
- A special relationship exists between a banker and customer, where the banker becomes a financial adviser or broker to the customer.
Trustee and Beneficiary Relationship
- A trustee holds legal title to property for the benefit of a beneficiary, with a relationship based on trust and confidence.
- A bank acting as a trustee holds legal title to property or assets on behalf of the beneficiary.
Right to Set-Off
- A bank has the legal right to use funds from one account to offset or pay off debts owed by the account holder in another account.
- This right is usually outlined in the terms and conditions of a bank's account agreement.
Duties of Bankers
- Duties of bankers include managing customer deposits, making loans and investments, and providing financial services.
- Key duties include following customer instructions, providing accurate information, and maintaining secrecy of customer affairs.
Duty to Follow Instructions
- A banker has a duty to follow instructions made by the customer, acting in the best interest of the customer.
- This duty is based on the principle of agency, where the banker acts as an agent for the customer.
Duty of Secrecy
- A banker owes a duty of secrecy to its customers at all times, keeping information concerning customer affairs confidential.
- This duty is statutory under the Financial Services Act 2013 and is also implied by the banker-customer relationship.
Customer Duties
- Customers have a duty to keep track of their finances and ensure they do not issue more cheques than they have funds available to cover.
- Customers must also exercise caution when issuing cheques, taking into account pending transactions that may affect their account balance.
- Using only bank-supplied cheque forms is also a customer duty.
Consequences of Non-Compliance
- If a customer issues a cheque without sufficient funds, they may be liable for fees, charges, and damages, and may face legal action or criminal charges.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
