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What are the legal obligations of a bank towards its customer?

What are the legal obligations of a bank towards its customer?

The provision of financial products or services naturally generates obligations for the parties. Indeed, the action of credit institutions in carrying out customer transactions is strictly regulated by law.[1]. Failure to comply with these rules by the banker may incur civil and criminal liability.

To do this, the latter is bound, in the exercise of his functions, by an obligation of non-interference in the affairs of his client which nevertheless finds a limit in the duty of vigilance imposed on the banker. Also, this professional must respect professional secrecy on customer transactions. Lastly, an obligation of information which contrasts with that of non-interference is created on its head of the banker by the legislator.

The obligation of non-interference

Also called the principle of non-interference, the principle of non-interference prohibits the banker from intervening in the client's business. Developed by doctrine from case law decisions[2], this principle is now implicitly enshrined in the Monetary Code and explicitly in the Consumer Code[3].

Indeed, if the purpose of this principle is to protect the client against the banker's interventions in his business, the fact remains that it also protects the professional from the risks associated with the client's transactions.

The principle prohibits, for example, the banker from interfering in the affairs of his client by preventing him from performing an irregular act or from refusing to carry out instructions given by the latter on the grounds that these seem to him to be inappropriate.[4] (deposits, withdrawals, collections). Indeed, the banker's interference in the client's business can be a source of liability for him.

Thus, the principle, compliance with the principle by the professional, protects him against the actions of the client in the event of operations carried out by them and which have proven to be detrimental to their interests.[5]. Indeed, it was judged that the banker "doesn't have to relish the opportunity of the credits he grants" and therefore cannot be held liable for the misuse of credit by a customer[6].

Also, this principle allows the banker to protect himself against the actions of sureties and sub-sureties against the client. Indeed, in a decision dated November 19, 2002, the Court of Cassation ruled: "that a credit institution, which does not have, in its capacity as lender or guarantor, to interfere in the business of his client, does not commit a fault by the mere fact of granting assistance to a competing company.[7].

Finally, the principle of non-interference protects credit institutions from third parties for dishonest transactions carried out by their customers to the detriment of the first[8].

The banker's duty of care

If the principle of non-interference prohibits credit institutions from interfering in the client's affairs by not, for example, investigating the origin or destination of the latter's funds[9], the duty of vigilance which weighs on the professional during banking and financial transactions, tempers this principle.

Indeed, if the banker is not required to seek the origin of the client's funds, it is however necessary to carry out certain checks or even refuse to participate in certain operations if these present anomalies. The duty of vigilance requires the banker to act as a professional.

This duty of vigilance or prudence comes in three forms:

Vigilance-surveillance

It enjoins the banker to monitor his clients with a view to detecting obvious or apparent anomalies, whether material (falsifications of titles such as irregular endorsements)[10] or intellectual (abnormal banking movements leading to suspicion of embezzlement of social funds by a director)[11].

Vigilance-information

It obliges the banker to find out from the client in the event of anomalies observed during the operations. This is illustrated in this case by L. 561-10-2 of the Monetary and Financial Code. Indeed, this article states that “complex operations or operations of an unusually high amount or which do not appear to have any economic justification or lawful purpose must be subject to heightened vigilance”. In fact, it is who asked the banker, it is to act as a good professional. Thus, case law considers the latter "would fail in its duty of vigilance if it granted credit without informing itself of the financial situation of the lay borrower"[12]. Nevertheless, the obligation weighing on the banker here is only an obligation of means and not of result.

professional secrecy

Professional or banking secrecy entails a ban on the banker disclosing information about his clients under penalty of civil and criminal sanctions. It essentially covers encrypted confidential information such as the amount of an account balance or the amount of a credit granted to a customer.[13].

The persons subject to this obligation are defined in Article L. 511-33, I, of the Monetary and Financial Code. These are all persons who, in any capacity, participate in the management or direction of a credit institution or who are employed by it. To these, persons who, in the course of their duties, may obtain communication of confidential information held by credit institutions (persons who participate in the control missions entrusted to the Prudential Control and Resolution Authority)[14].

Indeed, banking secrecy aims to protect the customer against the indiscretion of the banker. Thus, the latter must not, without the authorization of his client, in his lifetime[15], disclose or communicate confidential information concerning him, even to his relatives (spouse, heirs) or third party.

This question is a bit tricky when it comes to a legal person, i.e. a company other than a auto entrepreneur. Indeed, it can be admitted that the banker cannot oppose professional secrecy to the legal representatives of the company (manager, chairman of the board of directors or management board), what about the other members of the board of directors or the members of the supervisory board? In principle, the latter cannot individually obtain from a credit institution the communication of confidential information on the company. However, some do not doubt that when they act collectively, their action would be legitimate.

With regard to the partners, it is accepted that the secrecy is opposable to them[16]. However, many question the relevance of this solution to partners with unlimited and indefinite liability.

The limits of this professional secrecy which protects clients against the indiscretions of bankers are constantly multiplying.

Thus, Article L. 511-33, I, paragraph 2, of the Monetary and Financial Code specifies that "apart from the cases where the law provides for it, professional secrecy cannot be opposed either to the Prudential Supervisory and Resolution Authority, or to the Banque de France, or to the judicial authority acting within the framework of a procedure 2608, nor to the commissions of inquiry created pursuant to Article 6 of Ordinance No. 58-1100 of 17 November 1958 relating to the functioning of parliamentary assemblies”. Also, professional secrecy can, under certain conditions, be lifted in the context of legal proceedings against the client.

The duty to inform

During banking transactions, the banker is also bound by a duty of information with regard to his customers. Initially imposed by case law, this obligation to inform the customer, which is the responsibility of the banker, is now provided for in article R. 312-1 of the Monetary and Financial Code relating to information relating to general banking conditions and the opening of accounts and Article L. 312-1-1 of the same code on the general conditions and prices applicable to transactions relating to the management of a deposit account. In addition to these provisions, there are those of article L. 111-1 of the Consumer Code which impose a general obligation of pre-contractual information (characteristics of goods and services, price, delivery or performance time) for the benefit of consumers and at the expense of sellers of goods and service providers[17].

This obligation essentially consists of an obligation to inform and advise the client[18]. Thus, the banker must not only make available to the customer all the necessary information on the product or the banking service, but he must warn him[19] on the risks associated with the operation envisaged by the latter.

Note that the more the customer is less informed (profane) the greater the obligation of the banker.

In conclusion, the banker is, in his relations with customers, subject to compliance with certain obligations, non-compliance with which is likely to be both civil and criminal liability for him. These obligations which weigh on him are essentially intended to protect the clientele but also constitute to a certain extent a safeguard for the banker against the risks linked to the transactions carried out by the client.


[1] Th. BONNEAU, Banking Law; LGDJ; 12th edition; 2017 p. 341
[2] The first jurisprudential application of the principle of non-interference seems to be a judgment of the Court of Cassation dated January 28, 1930 (Gaz. Pal., 1930. 1. 550; Rev. trim. dr. civ., 1930. 369, obs.Demogue).
[3] Art. L761 2 Consumer Code
[4] Th. BONNEAU, op. cit. p. 343
[5] Cas. com., May 3, 2016, judgment no. 389 FD, appeal no. K 14-11358, Banking and law, July-August 2016. 19, no. 168, obs. Bonneau
[6] (Bull. civ. IV, no. 95, p. 78; JCP 1999, éd. E, p. 1730, 2° species, note Legeais; Rev. dr. Bancaire et Bourse no 75, Sept./Oct. 1999. 184 , obs Crédot and Gérard; Rev. trim. dr. com. 1999. 733, obs. Cabrillac; Les Petites Affiches no 118, June 15, 1999. 12; Dalloz Affaires, 1999. 990, obs. JF; RJDA 6/99 no 710, p. 556; JCP 1999, ed. E, pan. p. 1218, note Bouteiller).
7] Cas. com., Nov. 19, 2002, Bull. civil. IV, no. 167, p. 191; Banking and Law No. 88, March-April 2003, 61, obs. Bonneau; Rev. trim. dr. com. 2003. 150, ob. Legeais.
[8] Cas. com., Jan. 30, 1990, Bank no. 505, May 1990. 535, obs. Rives-Lange. V.; Cas. com., June 15, 1993 (Bull. civ. IV, no. 239, p. 170; Rev. dr. banking and stock market no. 40, Nov./Dec. 1993.
[9] Th. BONNEAU, op. cit. p. 344
[10] v. Paris, 7 Feb. 1966, Rev. trim. dr. com. 1966. 972, ob. Becque and Cabrillac.
[11] Cas. 2nd civ., May 5, 1975, Bull. civil. II, no. 130, p. 107; Cas. com., 11 Jan. 1983, judgment prec.
[12] Ibid. p. 345
[13] BERTREL, art. prev. p. 3; adde, Rennes, 13 Jan. 1992 (JCP 1993, ed. E, II, 432, note Gavalda; Rev. dr. Bancaire et Bourse no 46, Nov.-Dec. 1994. 258, obs. Crédot and Gérard)
[14] Ibid. p. 347
[15] V. Reims, 25 Feb. 1993, Rev. dr. Banking and Stock Exchange No. 39, Sept.-Oct. 1993. 226 and critical note Crédot and Gérard.
[16] Paris, March 20, 1990, Rev. dr. Banking and Stock Exchange No. 21, Sept.-Oct. 1990. 202, ob. Crédot and Gerard.
[17] Th. BONNEAU, op. cit. p. 353
[18] Cas. 1st civ., June 27, 1995, D. 1995. J. 621, note Piedelièvre; Rev. dr. Banking and Stock Exchange No. 51, Sept.-Oct. 1995. 185, ob. Crédot and Gerard; Legal Daily No. 91, 14 Nov. 1995. 6; RJDA 12/95 No. 1400; Defrénois 1995, art. 36210, no. 149, p. 1416, obs. Mazeaud; Contracts, conc. consum., dec. 1995, no. 211, notes Raymond.
[19] V. Mazeaud, obs. prec., which emphasizes that “the Court seems to equate the obligation to advise and the obligation to warn”. See the file “The banker's duty to warn”, in Rev. dr. Banking and Finance No. 6, Nov.-Dec. 2007. 73.

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