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THE RIGHT AND RESPONSIBILITIES OF A BANK TO THEIR CUSTOMERS

CHAPTER ONE

INTRODUCTION

BACKGROUND TO THE STUDY

Banking operation in Nigeria has gone through very dramatic changes within this decade. The bank has grown beyond optimistic expectations. Over the period, the number of banks expanded five fold, the variety of banks increased, banking operation were substantially deregulated, competition increased and bank were forced to be more innovative and service oriented.
This has made the researcher to go in for the topic the rights and responsibilities of banks to their customers. The banks right to their customers are to charge commission to their customers for service render to them, banks return irregular instrument like unpaid cheques, which are not properly drawn, also banks return cheques exceeding authorized overdraft, this are customers which want to make overdraft facilities but the customer did not come with the duration and so banks will return the cheque exceeding the overdraft. And some of banks responsibilities to their customers are: to pay cheques to their customers banks receive money from their customers, banks gives reasonable notice before closing credit account of a customers. All this has made baking operation to be well structure and service oriented. When banks has much fund in their banks the right and responsibilities is fully achieved. As a matter of fact between 1947-1952 a total of 22 banks were registered by Nigeria according to the study concluded by the C.B.N. of Nigeria but within four years because they cannot met up with their rights and responsibilities they well all out of duties (Distress)

STATEMENT OF THE PROBLEM

A bank is s financial institution, which provide minimum banking services and which is licensed as a bank by the federal government of Nigeria as a financial institution. This banks are duely bound to posses their rights and responsibilities to their customers but as a matter of fact, there are some with standing problems which comes across the banking operation, some of which are: Lack of fund when customers or banks balance or overdraft is not sufficient to cover his cheques the bank is not liable to pay the customers cheques. Customers Death: The death of a customer cancels all mandates and authorities relating to his account, the banker may receive in express or constructive notice of his customer’s death and in either case, no further cheques must be honored.
Bankrupty of customers where notice of presentation of a bankrupty petition against the customer has been received by the banker, cheques should not be paid.

Forged signature: Banks to faced problem from customers who forged signature to receive money from the bank, when the signature is not related or look alike with the drawer signature, the banks disregard the cheque.
Irregularity in drawing of cheques demand during non-banking hours-banks do faced a problem from their customers who make demand during non existing hours of the day.

OBJECTIVE OF THE STUDY

The objectives that made the researcher to go into this topic.
The rights and responsibilities of a bank to their customers are as follows:
Banks right to their customers 

i) To charge a reasonable commission for services 

ii) Rights to return irregular instruments

ii) Right to return cheques exceeding authorized overdraft.
The researcher want to find out how banks charges commission to their customers.

To find out why banks return irregular instrument.

To find out why banks return cheques exceeding authorized overdraft.
Banks responsibilities to their customers are:

i) To pay cheques

ii) Banks receive customer’s money

iii) Banks give reasonable notices before closing customers’ credit account.

iv) Banks has the responsibility to keep the affaire of the customer secret (Duty of secrecy).

The researcher want to find out the responsibility of a bank to their customers. They are:

1. To find out how banks pay their cheques to their customer

2. To find out whether banks receive customer’s money

3. To find out whether banks give reasonable notice before closing customer’s credit account.

4. To look for or how banks take care to their customers.

5. To find out whether banks keep the affair of their customer secret that is the duty of secrecy.

RESEARCH QUESTIONS

In order to attain the following objectives, the researcher is expected to employ or ask the following research question:

 How does banks receive customers’ money.

 What is irregular commission which banks charges to their customers

 What causes banks to close customers credit account

 Why banks keep their customer affair secret.

SIGNIFICANT OF THE STUDY

According to Willy Nnamani research arises when there are problem to solve, preculiarities or puzzles about phenomena or the question of giving meaning to them. There are many reasons for the study of banks rights and responsibilities to their customer which both banks, customers and country as a whole (communities, individual) has benefited from this study they are:
The study will serve as a means to tackle the problem of lack of fund in banking operation and as a matter of percentage of money or fund is kept in bank to ensure the daily running of banking service to their customers. Also, this study has enlighten the customers on how to make bank for loan even on over draft bases or facilities and how customers can present their collateral to the bank they wish for loan Further more, this study will help banks to use instrument to evaluate their customers rather than driving them by low interest rate. Finally, through the researcher restricted the study right and responsibilities of bank to their customers by rediscounting facilities for stabilization securities, holding will be valuable to bank for finding purpose, subject to condition that the bank (CBN) may specify from time to time.

LIMITATION OF THE STUDY

These are conditions beyond control of the researcher that may place restrictions on the conclusion of the study and their application to other condition. These restrictions are: In a study of this nature, one would like to accumulate data from many areas put in view of length of time allowed for this research, such as wide range samples study was almost external difficult. The researcher therefore, concentrated his fieldwork in Enugu metropolis The choice of Enugu metropolis was base on the time factor allowed and upon practical consideration including the fact that researcher knows almost every thing about Enugu. Besides, there were many other problem that stemmed up during the research work in which some of them are as follows:

FINANCIAL CONSTRAINT: As a student there was not enough capital to spend in transport and fact finding and borrowing of necessary literature that would have helped in writing of this research work.

MANAGEMENT CONSTRAINT: The respondents especially the branch manager, did not co-operate as was expected. Also the worker in the different department in banks visited were as well reluctant in answering some of the question asked.
All this problem not with standing did not prevent the continuation of the research work.

DEFINITION OF THE TERM:

What is a bank: This is an association of person or a financial institution incorporated by federal republic of Nigeria that accept deposit and render loans to their customers with the aim of making profit through interest rate they changes to customers.

Banking Institution: This is a body of person whether incorporated or not who carry on the business of banking according to section 2 of the U.K bill of exchange Act 1882 state so.

A Banker: this is a person who receive money on current or deposit account collect the proceeds of cheques and pays cheques drawn by customers.

Banking Business: This is a business of receiving from the public on current account money which is to be repayable on demand by cheques and making advances to customers.

Customer: This is a person who makes an offer and it is accepted by the organization. The person becomes a customer to the organization, offer must be made and acceptance must be granted. Who is a bank customer? This question is difficult to answer because there is no statutory definition of who a banks customers is but going by the dictionary definition or the word customer it can notes the relationship existing between one person(s) and another as a result of continuous dealing.

BANK AND CUSTOMER RELATIONSHIP: This is when person (s), firm, company or society etc makes an offer to becomes a customer, which the bank duly accepts, it can thus be seen that the element of offer acceptance (which is the cardinal issue in the law of contract comes into play in the banker customer relationship.

BANK RIGHT: This are duties obligation which the bank has an authority to operate or does without taken permission, failure or going against the bank obligation eg charging of commission, duty of secrecy, duty of care etc.

WHAT IS RIGHT: This is what an individual firm or an organization is doing without being necessarily taken permission before doing it.

RESPONSIBILITIES: This are dryly activities one is oblarge to perform or a bank perform

BANK RESPONSIBILITIES: This is what banks does daily ie day to day running of the banking.

FINANCIAL INSTITUTION: This is define under section 61 of the BOFID 1991 as follows any individual body, association or incorporated other than the banks licensed under this decree section 51 of this decree which carries on the business money brokerage and whose principal object include factoring project financing, equipment leasing e.t.c

NON BANKING INSTITUTION: This are financial institution which are neither banks, insurance companies, nor stock broking firm but are empowered by the C.B.N. to carry on the business activities as financial intermediaries.

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