The relationship between a banker and a customer (account holder of that bank) is primarily that of a debtor and a creditor, and not that of principal-agent relationship.
Secondly, when it comes to establishing banker-customer relationship as debtor-creditor relationship, there is a vital exception to the common known rules/practices of debtor-creditor relationship.
Explanation
In order to simply understand this exception - you have to ponder upon only one important question i.e. what happens when the debt is due from the borrower?.
1) In case of a debtor and a creditor, the debtor (who owes money to the creditor) is bound to return the money whether the creditor makes a demand on him to return the money or not. This is of course as per their agreed terms on period of time, interest, installment amount, etc.
2) However, in the case of a banker and its customer, the banker is only liable to pay back the money to the customer only when a demand is made in that respect. Bankers are not responsible to find customers and make the payment. Customer is required to make necessary application to withdraw his money from his credit balance in the bank.
Case law
[United Kingdom] [House of Lords] In Foley v Hill (1848) 2 HLC 28, 9 ER 1002
[Court of Appeal of England and Wales] In Joachimson v Swiss Bank Corporation [1921] 3 KB 110
[India] [Calcutta High Court] In Santosh Kumar and Ors. vs The King (AIR 1952 Cal 193), it was held that "The relationship between a depositor & a bank is the simple relationship of a creditor & a debtor. A depositor who deposits money in a bank in his current account is nothing more than a creditor & it cannot be said that there has been any entrustment to the bank for any particular purpose. The bank is of course liable to refund the money to the depositor when the depositor calls for it, but the money deposited belongs to the bank & the bank is entitled to deal with it as it likes.".
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