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Optic Globe (Nothing)     09 September 2014

Bank - borrower relationship and indian trust act ?

When a Commercial Bank accepts Deposit from Customer, Bank becomes Debtor and Customer becomes Creditor. Bank is free to use borrowed money as it likes. But, when Customer takes a Loan from Commercial Bank, the Loan is generally sanctioned for a specific purpose,for example, purchase of property,education etc. Customer is not entitled to use Loan amount for any other purpose.

Through a Loan, Bank is giving it's property to the Customer with a specific purpose, for the benefit of both Bank and Customer.

Could then it be argued that relationship between Bank and Borrower is a Trust Relationship under Indian Trust Act, and not a simple Creditor - Debtor relationship ?




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