Relationships with customers of the bank
Category: Concept of the Bank and the Banking System
The Bank, being the product of the needs of the economy, in the midst of economic life, aims to promote the interests of their clients. It is no coincidence therefore, in recent years, more and more established the ideology of the bank as a partner.
Partnerships have certain properties. They are characterized by:
1) voluntary;
2) mutual interest;
3) a commercial nature. Each client, regardless of geographic location itself defines the services of the bank, it should take. There is no registration, forced consolidation of banks. Equally, it rushes to the bank, which chooses a client. This choice may have short-or long-term nature, much depends on the mutual interest to use one-time services of a bank, or have a relationship on an ongoing basis. «Attraction» partners to each other based on a commercial basis. The client is willing to pay for the credit, payment transactions or other services, which are favorable to him. The Bank is ready to sell your product, while receiving appropriate remuneration. The Bank is working with the customer (adheres to the philosophy «everything for the customer»), contributes to the continuity, quality, and competitiveness of its production, income, sufficient for reproduction. Providing income-customer, the bank sells its own commercial interest and to give compensation in the form of interest on loans or commission.
Banking legislation, protecting the interests of two parties, provide to the client:
— The right to open a bank account;
— Eligible for deferral of payment to the bank;
— The possibility in some cases independently perform certain banking transactions;
— The opportunity to participate in the Council of banks, banking associations;
— Preservation of secrecy;
— The protection of his contributions.
The right to open accounts, as noted earlier, can be purely declarative character, because the bank, not wanting to «mess around» with a small customer can always near to all kinds of pretext to deny him his rights. That is why in some jurisdictions the client is entitled to require the central bank to show him what a credit institution, where he must open an account (in France account can be opened by mail).
Very important for the client is not only the right to use a particular banking service, but its protection from unauthorized actions of the bank in the event of termination of credit assistance.
The right to delay payment for the borrower performs a vital factor in determining its further development. It is known that in many cases a bank customer may experience difficulty in repayment. Of course, we are talking about financial difficulties due to objective circumstances not related to his poor performance. Where the client’s creditworthiness is broken, where the client has repeatedly allowed violations of the loan agreement with the bank, compromised, get a deferred payment is impossible. The law in this case protects only that customer, who neatly fulfills its obligations. Essentially, in this case, legislation blocking bank’s actions to undermine the financial capacity of the borrower, the «strangulation» of the client banker.
Such a danger does exist, it practically becomes the most significant impact to small or medium-sized enterprises. According to the «laws of some countries to reduce or suspend credit support are made possible by a written customer base and in advance — from 30 to 60 days depending on the type of credit granted. The procedure for revising the terms of the reduction or termination of credit is usually fixed in a written agreement. It may be clarified liability lending institution.
Eligible for Customers to carry out banking operations for a long time was of debatable character. Calls into question the very possibility of the client to perform these operations, firstly, at the appropriate level of economic and, secondly, without increasing risk. A compromise was reached mainly due to the fact that the conduct of banking transactions require the appropriate license, issued only under certain conditions (material, technical, professional). This is only for large customers that can open in their special units that meet the requirements of the bank. With regard to risk, it is considered that even in the fact of implementation of an enterprise (in addition to its core business) of additional banking operations provides evidence of diversification and, consequently, reduce the risk. Typically, in this case acts and other rules: no additional client’s business (in the form of certain banking operations) should not exceed 10% threshold in relation to its core activities.
The possibility of joining the client to the Board of the bank’s general provisions on joint stock companies. According to the legal standards to the Board of the Bank include its founders, who have a stake in the bank’s authorized capital.
Unfortunately, the shareholders, in turn, often do not have strict legal obligations, while for them the implementation of joint commitments is essential. The law protects the bank, because it regulates on the stage of creation, in formulating the requirements for the founder. The law also prohibits the founders of the bank withdraw from the participants during the first three years from the date of its registration.
At the macro level, the client’s interests can be ensured through the participation of large enterprises as agents of management in the banking sector in the various banking associations. When the central banks of several countries is organized as a consultative advisory council, among participants who may be prominent practitioners of the national economic sector.
Customer relationships with banks are largely determined by a variety of possible use of bank credit (deposit, credit, and so on.) Availability of money market funds.
As will be shown later Enterprises — bank customers have a rather broad possibilities of using banking services. There are many types of bank loans. However, in practice they are issued with consideration of the last financial «biography» of the client, rather than its future development (quantity and quality of customers and markets), the so-called global economic development credit is not received.
More developed individual targeted lending business operations. However, the law should work not only on the present state, but also provide a theoretical possibility for wider use of banking product. Of course, this can be done not only through economic stabilization, but also the introduction of legal innovation, giving, in particular, the possibility of transfer of power of attorney for property. In this case the enterprise by guaranteeing the services of credit institutions receive strong support in financing their programs. According to the legislation of some European countries, transfer of power of attorney for property can be a simple calculation note or media (eg magnetic tape).
The availability of the money market is determined and the extent to which the country developed the market short of money (getting credit for a period of 1 to 10 days), the securities market, including coupons enterprise, making it possible to finance the activities of the enterprises — the bank’s clients.
The legislation provides the customer’s interests and by bank secrecy. Banks and nonbank lenders guarantee secrecy of the operations, accounts and deposits of its clients and correspondents. For information on transactions and accounts of legal entities and individuals engaged in entrepreneurial activities without forming a legal entity, issued by it, courts and arbitration courts (judges), the Chamber, the state tax service and tax police, customs authorities in cases provided by the relevant legislation about their activities.
Bodies of preliminary investigation on cases under their consideration, the information about the client and its operations are given only with the consent of the prosecutor. Information on accounts and deposits of physical persons issued by banks themselves, the courts and authorities of the preliminary investigation of cases in manufacturing, with the consent of the prosecutor.
During the lifting of bank secrecy, commercial banks, nonbank credit, and auditing organizations and their officials and employees have a responsibility, including damages.
Special place in the banking law belongs to the protection of human contributor. The law prescribes the establishment of the Federal Deposit Insurance Fund, which should guarantee the return of funds attracted by the banks of the population.
In accordance with international practice, protection system can acquire the following forms:
— The State acts as guarantor of deposits;
— The guarantor of the central bank acts creating special reserves of commercial banks’ compulsory contributions;
— The guarantor serves all the banking community (banks may establish funds (reserves) by paying special contributions to cover losses bankrupt lending institution on the fact and given the amount of capital and current operations of the bank);
— Additional (double) a guarantee of protection of deposits through the formation of central reserves of the banking system in general and special reserve funds of banks, such as mortgage banks.
Banks may also create a voluntary deposit insurance funds, which also ensures the safety of deposits, including the payment of income for them.
The law protects a certain way as cash and other assets of individuals and entities within their accounts from unnecessary penalties. Determined that such a punishment can only be carried out on the basis of executive documents. The arrest may be imposed only by a court, arbitration, judge, and the decision of the body of the preliminary investigation in the presence of the prosecutor’s sanction.