Termination of Relationship

The relationship between banker and customer may be terminated in any of the following ways

1. By mutual agreement:

The relationship between banker and customer may be terminated by mutual agreement.

2. Death of customer:

Death of a customer is an obvious reason for terminating the relationship between banker and customer. On the receiving the notice of death of the customer the bank stops the payment. The dissolution of a corporation customer is equivalent to death.

3. Lunacy of customer:

The Lunacy of a Customer terminates the relationship between banker and a customer. Bankers authority to pay cheques is revoked by notice of insanity. But unless the evidence of insanity is fairly conclusive, the banker’s wisest course would appear to be to treat the customer as sane in so that the banker is not held liable for damages for wrongful dishonor.

4. Notice to terminate:

In case of any current account, no such notice by the customer to a banker appears necessary. But if it is a deposit account the banker could insist on the notice period specified on the fixed deposit receipt/book.

5. Bankruptcy:

The bankruptcy or winding up of the bank is a sufficient ground for terminating the relationship between a Banker and customer.

6. Order of court:

If the court restrains the banker to carry on further of the banking business, the account of the customer comes to an end.

7. Transfer of balance amount:

If the customer transfers the whole amount of balance of his account to any other person, then the account may be closed by the banker. In this way the relationship of banker and customer comes to an end.

Voluntary Termination

The banker cannot close the account of the customer. If the person wanted to close his account with his free consent, then the relationship between banker and customer can be terminated.

Closing the account after bank notice

It is the right of the banker that if he found and illegal activity with the account or any other reasonable ground, the bank can close the account after giving proper notice to the customer.