The Relations of a Banker to his Customer

The relationship between banker and customer is that of a borrower and a lender, though which role the banker plays depends on the transaction: he is a borrower from those who deposit to the bank and a lender to those who take loans from the bank. His function in either role is one of guarantor, whose actions ensure that he pays those he owes and collects from those who owe him, both according to the terms of the agreement he has entered into.

It has been mentioned that the banker absorbs the default risk, returning deposits and paying interest even if his debtors do not repay him. He also bears the risk of fraud, forgery, theft, and deception of innumerable parties who may seek to gain money without proper authorization, and must bear the cost of failing to detect and stop such behavior.

Sykes goes into detail about specific instances where the bank may be defrauded and the requirements and expectations of a responsible banker, but the instances in which the depositor must bear the loss are very few and require proof of irresponsible conduct on the part of the depositor himself.

There's a brief consideration of safe deposit boxes, in which the customer provides specific articles to be stored "in a locked or sealed box" on the premises of the bank. The banker has no access to the items and holds no liability other than to take responsible precautions to secure his premises and provide access only to the customer who owns the property stored.

Then, some details about instances in which the banker is beholden to the courts to act on their orders in ways that are contrary to the welfare of his clients. The courts may freeze accounts or demand the banker provide them with the property of his client.

Another special instance is the client who is a minor, who has legal possession of assets but does not have the full right to access or assign them to others. There are few laws about the degree to which the banker act as guardian of these assets and disallow the minor to use them, and there is a great deal of flexibility and decisions made by courts and agencies in each specific case. The one thing that is universal is that a minor cannot enter into a legal contract, and a banker has no recourse to recover money that has been loaned to a minor.