Besides performing the main functions of accepting deposits and lending money, modern commercial banks cover a wide range of financial and non-financial services to customers and the general public. Modern commercial banks act as Agents, Trustees, Executors, and Administrators for their Customers.
Bank as Agent, Trustee, Executor, Administrator For Customer!
Banker as an Agent
The banker acts as the agent of his customer in performing the following functions:
- Payment and collection of subscriptions, dividends, salaries, and pensions. Bankers make payments and receive money on behalf of their customers in the following ways:
- Payment of insurance premium.
- Payment of membership subscription to clubs, libraries, and professional association
- Payment of rent and salaries.
- Collections of dividends on behalf of customers.
- A collection of pensions, rents, etc.
- Transfers of tunas from one account to another.
The bank charges a nominal amount for this service. To do this service, the banker should get clear instructions in writing from customers. The instructions of the customer should be clear and not end uncertain loans, which give rise to controversial meanings. The banker may not accept the instructions, which are difficult to comply with but once accepted, it is the duty of the banker to carry out the instructions.
- Purchases and sales of securities: Banker undertakes to purchase and sell shares and debentures of joint-stock Company on behalf of his customer only. Whenever the customer delegates the work to the bank, the banker should get clear and precise instructions in special forms used for this purpose. The form should contain the following things:
- The particulars of securities to be sold or purchased.
- The minimum and maximum price at which the securities are to be sold or purchased.
- The period within which they are to be sold or purchased.
- The names and addresses of the persons in whose name they are to be registered.
- In executing these services, the banker acts as an agent of his customer. Only members of the stock exchange can sell or purchase securities. As the bank is not a stock exchange member, they appoint brokers who act as sub-agents of the bank to carry out the instructions.
- Acting as an attorney: Power of attorney may be given by a customer to the Tanker. By granting power of attorney, the customer authorized the banker to receive dividends and interest on securities belonging to him and give a valid discharge, therefore.
Banker as a Trustee
A person may desire that a part or whole of his property be held in a trust to benefit various beneficiaries named in the will after his death.
In such a case, he may create a trust under his will, directing a certain person to hold the property to such persons after a specified time. When the bankers take the liability to administrate this property type, they will be called the trustee.
Banker as an Executor
A person may make a will expressing his intention regarding the disposal of his property after his death. A will has to be in writing, signed by the person making the will, trusted, and attested by two witnesses.
A will becomes effective only after the court approves it as private. A private copy of the will is duly certified under the court’s seal together with a grant administrator.
The person appointed as an administrator of the deceased is known as the executor, and the bank may appoint an executor for such service.
Banker as an Administrator
If a person dies without a valid will, the deceased’s property may be administered according to law.
The bank may be appointed to administer this property, and then the banker will be called the administrator.
