RISK FOR BANKER’S CONNECTED TO CLOSING A CUSTOMER’S ACCOUNT

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Abstract

Financial institutions (banks and building societies) from time to time request customers to close their accounts and make alternative arrangements. This occurs most often if the financial institution is unhappy with the way in which the customer is using the account or it feels that its relationship with the customer has broken down irretrievably. Banks sometimes close a customer’s account without the customer’s agreement. Most other commercial organisations, banks and building societies included, are under no obligation to continue doing business with someone if they do not consider it appropriate to do so. However when financial institutions decide to close accounts of customers, this should not be on based on an improper reason – for instance, because of unfair bias or unlawful discrimination. And it is an implied term of the contract between the bank and its customer that the bank will not normally close the customer’s account without giving reasonable notice. This article seeks to analyse instances where banks have closed their customers’ accounts and factors that were considered, if any, for such a decision.

Keywords: Financial Institutions, Banks, Customer, Banking Confidentiality

How to cite this paper: Majake, T. (2016). Risk for banker’s connected to closing a customer’s account. Risk governance & control: financial markets & institutions, 6(4, special issue), 510-515. https://doi.org/10.22495/rgcv6i4siart9