[00:01.47]Lesson 12
[00:03.11]Banks and their customers
[00:12.56]Why is there no risk to the customer when a bank prints the customer's name on his cheques?
[00:21.08]When anyone opens a current account at a bank, he is lending the bank money,
[00:26.54]repayment of which he may demand at any time either in cash or by drawing a cheque in favour of another person.
[00:35.94]Primarily, the banker-customer relationship is that of debtor and creditor  --
[00:43.09]who is which depending on whether the customer's account is in credit or is overdrawn.
[00:49.70]But, in addition to that basically simple concept,
[00:53.92]the bank and its customer owe a large number of obligations to one another.
[00:59.99]Many of these obligations can give rise to problems and complications but a bank customer, unlike, say, a buyer of goods,
[01:09.26]cannot complain that the law is loaded against him.
[01:14.09]The bank must obey its customer's instructions, and not those of anyone else.
[01:19.95]When, for example, a customer first opens an account, he instructs the bank to debit his account only in respect of cheques drawn by himself.
[01:30.81]He gives the bank specimens of his signature, and there is a very firm rule
[01:36.06]that the bank has no right or authority to pay out a customer's money on a cheque
[01:41.36]on which its customer's signature has been forged.
[01:45.26]It makes no difference that the forgery may have been a very skillful one:
[01:49.97]the bank must recognize its customer's signature.
[01:54.41]For this reason there is no risk to the customer in the practice, adopted by banks, of printing the customer's name on his cheques.
[02:03.67]If this facilitates forgery, it is the bank which will lose, not the customer.