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The nature of bank and customer relationship should be a changing scene both in China and the UK but differences may be the starting points and the extents. Paget describes this relationship is a contractual one as: ‘It consists of a general contract, which is basic to all transactions, together with special contracts which arise only as they are brought into being in relation to specific transactions or banking services.’ Concerning the general contract, while the common law continued to emphasize the essential relationship was of debtor and creditor , the Chinese people was not accepting this notion completely. Most Chinese people are thinking ‘that is my money in the bank and I lent it to the State’, because all the biggest banks are still owned by the State. It was not surprising that when some regional banks and credit cooperatives collapsed during the chaos time, the personal customers were well protected by the government. Even now, the Law of Commercial Banks provides:
When liquidation is carried out after a commercial bank is declared bankrupt, payment of the principal of savings deposits of individuals and the interest thereon shall be given priority after the liquidation expenses, the wages owed to the employees and labor insurance premiums have been paid.
It is clear that the Chinese customers will not hold that priority after the complete commercialization of state-owner banks. The problem is how to tell the customer the banking risk before changing the law. It was argued a Deposit Guarantee Scheme like that the UK will do could cause ‘moral risk’ because the Chinese people required completely compensation as usual.
The Paget’s description leaves open to the categories of specific agreement. The new techniques have promoted the efficiency of banking industry. Banking services have kept on extending, so the specific agreements rely on both the practices of banks and the acceptability of customers. In this respect, the bank and customer relationship has been far from the traditions but the banking law seems to be inadequate to catch up with the changing scene in both States. It was suggested by Jack Committee that the law and practice of banking should achieve ‘fairness and transparency’. In the UK, a self-regulatory approach has been adopted through developing the Banking Code ‘to maintain confidence in the security of the banking system’, and those agreements may subject to relevant statutes e.g. Consumer Credit Act 1974, Unfair Contract Terms Act 1977 and Unfair Terms in Consumer Contracts Regulations 1999. In China, competition arose between joint stock banks, city commercial banks, and state-owner banks. New provisions of banking service continually emerge. Many of them are promoting the efficiency of the use of passbook. Others such as the bank cards and internet banks are governed by separate systems. A card account shall not be combined with other account by the bank for the purpose of setting-off bank’s credit unless required by customer. The specific agreement must be in writing and signed by the customer. Such agreement subject to Law of Contract 1999, Law of Protection of Consumer Interests 1993 and relevant Measures issued by People’s Bank of China.
I believe the nearest version of the Banking Code has been well defined today’s personal customers of both States : ‘a person who has an account (including […]) or who receives other services from a bank or building society.’ Now it is in a time that the bank and customer relationship is no longer merely based on an account or a passbook. Their contractual relationship is no longer merely of creditor and debtor. To some extent, the relationship would depend on what service the banks offered, what the customers accepted, and what a bank and its customer expressly agreed.
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