The legal and the servicing agreement terms between the bank and customer are listed in the Terms and Conditions. In order to use the services offered by the bank, the customer must agree to the terms and conditions. If a customer does not agree to terms and conditions banks do not provide their services. 

Terms and conditions are also known as terms of service or terms of use. It is like a disclaimer from the bank to the customer for providing the services.

Purpose of Terms and conditions

It is mainly for legal purposes where it binds the customer and the bank under a service agreement. Terms and conditions are subject to change from time to time. 

Terms and conditions are a strategy to protect the customer and the bank. 

If the customer violates any terms and conditions then the bank enforces the terms and refuse services. 

If the bank violates any terms and conditions then customers can file a lawsuit for the violation.

Content of terms and conditions

The content of the terms and conditions are different from bank to bank. The general outline of terms and conditions include the rights and responsibilities of customer and banks, privacy policy, account termination details, modification of terms, specific laws applicable and jurisdiction compliance. 

Understanding bank’s Terms and conditions

It is a general observation that no one actually reads the terms and conditions agreement. The service providers instead of asking the customer for the consent of agreement they actually put their rules under terms and conditions. The customer does not read the terms and conditions and gets caught easily either paying penalties or ending up with termination of services. 

If you do not read terms and conditions and accept the services of the bank. You are getting into the risk deal as a lack of information regarding the terms of service will cost you any day. You should read terms and conditions to have a clear idea of your next course of action in case of default of services from the bank.

The customers do not read terms and conditions because  

  • Terminology is difficult to understand 
  • Terms and conditions are very lengthy
  • The clauses in the agreement look similar and they are confusing
  • The font is small and customers do not show interest in reading

If the bank’s terms and conditions are difficult to read and understand ask bank officials or take the help of your legal expert and only then go ahead and sign the application. 

Where do terms and conditions appear?

Terms and conditions appear at the end of the bank application forms before you register yourself for the services. If you are using online banking it would appear on the first page before you sign up for the services. 

Terms and conditions should be agreed by the customer for availing the following services

  • Bank Account
  • Credit/Debit Card
  • Locker facility
  • Online transfers
  • Internet and SMS banking
  • Loans, Mortgages, Insurance
  • Reward points and others

Bottom line

Terms and conditions are important and should be followed by both the bank and customers. When things do not go according to plan both banks and customers can take legal protection and resolve the issues. 

Read and understand the terms and conditions. Taking the help of a legal expert will reduce your time and it ensures that you are in good agreement terms. By doing this you can make the best use of banking services.

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Vinay Kumar
Vinay Kumar Goguru is a finance professional with more than 8 years of diverse experience as a researcher, instructor and Industry work experience with both public and private entities. Prior to MyMoneySouq, he spent 6 years in Berkadia, It's a commercial mortgage banking company. He has a "Doctoral Degree in Commerce" and two master's degrees with a specialization in Finance, one as Master of Commerce and other as Master of Business Administration. He has written several articles on personal finance, published by different International journals. He loves traveling, reading and writing is his passion. He has a dream of writing a book on his favorite finance topics.

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