Multiple choice

A customer deposits some money in his deposit account with the bank but forgets to provide complete particulars of the account. The bank credits the funds in sundries account. The relationship between bank and customer in this case is of

  1. debtor and creditor, as the funds were deposited for a deposit account

  2. bailee and bailor, as the money has been received by the bank

  3. agent and principal, as the bank will act as an agent for the funds

  4. trustee and beneficiary
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A trustee holds property for the beneficiary and the profit earned from this property belongs to the beneficiary. If the customer deposits securities or valuables with the banker for safe custody, banker becomes a trustee of his customer. The customer is the beneficiary, so the ownership remains with the customer. Here, the bank is a trustee and the customer is the beneficiary. 

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