A bank has been defined in many wise, but under the Bill of Exchange Act Cap 65, a bank

is defined to include a body of persons whether incorporated or not who otherwise carry on the business of banking. The Regulation and control of the banking business in Uganda is principally done by the central bank with the mandate directly derived from Article 161 of the constitution. A customer of the bank can be said to be any entity for which the bank agrees to conduct an account. In the case of Ladbrook Vs Todd, court held that a person becomes a customer of a bank when he goes to the bank with money or cheque and asks for an account to be opened in his name. And that if the bank agrees and does open the account that person becomes a customer. Because of this relationship, both the bank and the customer owe some duties to each other. The code of Good Banking Practice has been drawn up by the Uganda Bankers' Association (UBA) to guide all member Banks of the UBA in their relationship with their customers where appropriate. Among the fundamental principle drown by this code is the principle of Respect confidentiality Therefore the relationship between the bank and the customer is an implied term of the contract between the two parties, that banks will keep their customers information confidential. This confidentiality is not just confined to account transactions it extends to all the information that the bank has about the customer. In the case of Parry Jones Vs Law society1 Diplocktin emphasized that a duty of secrecy is not only between solicitor and clients but also between bankers and customers. Consequences of a breach of confidentiality Customers rightly expect high standards from their banks So if they discover that their private information has been wrongly divulged to someone else, they can become very unhappy even if the disclosure has resulted in little more than minor frustration or embarrassment. But even a minor mistake by a bank can lead to significant problems particularly if the customer is running a business. Since the Basic relationship between banker and customer is one of creditor and debtor, a relationship of principal and agent coexists with it, for purposes of customer's instructions to his banker to carry out particular transactions on his account. This typical relationship is including four parts: the customer's rights and duties, the banker's rights and duties In the case of Tournier Vs National provincial and Union Bank England2

Among other issues are also four exceptions in which the judge examined the bank's duty of secrecy. And they are as follows: a).Where disclosure is under compulsion by law, b).Where there is a duty to the public to disclose, c).Where the interests of the bank require disclosure, d).Where the disclosure is made by the express or implied consent of the customer. The duty and the stated qualifications are seen as still broadly relevant to present day circumstances. However, There is also wide concern that they are not enough defined for today's conditions, especially, as internet banking is becoming more and more popular, the four exceptions seem to open to abuse potentially. So "reforming" is becoming necessary and desirable. First let's see why these four exceptions are becoming ambiguous or not enough to define today's circumstances. It is convenient to group the four exceptions in pairs: a) and b), c) and d) to discuss. Bankers allowed to disclosure confidential information to the public interest in a wide range of specified situations. The Prevention Corruption Act Cap 121, will require banks to disclose, on suspicion, confidential information concerning the location of funds which might be used for, or derived from, possible corruption offences. These directly overrode that the giving of information to the police in regard to a customer suspected of a crime would be unwarranted. In some specific circumstances, statutes are required (in most cases) or permitted (occasionally). Indeed, these statutory interventions in customer confidentiality are, in each individual case, justified by the public interests at stake. But they amount to a formidable burden on bankers, not made easier to bear when there is some uncertainty as to the precise nature of the obligations imposed by the law. In C v Barclays Bank3 case, it was hold, dismissing the appeal, that BB was not subject to an implied duty of confidentiality not to disclose the relevant information, and any express instructions would only create an obligation on BB if it had agreed to comply with them, or if they furthered some right existing as a result of the customer relationship. Furthermore, BB's discretion to deal with or respond to adverse claims to the property should be left unfettered and there was no duty on BB to accept instructions which attempted to fetter that discretion. The fact that the caution had

been cancelled was information of which the original cautioner would have had notice. It was neither necessary nor sensible to impose a duty on BB not to disclose information to which a person was entitled under a statutory code. In addition to the above, the Evidence (Bankers Book) Act Cap 7 section 6 permits court to order for information about a give account. In the case of Foley Vs Hill4, the right to access the customers account was held to be necessary. Under the Income Tax Act Cap 340 section 131 (4) gives the tax officers to obtain information from the customers books and computer as the commissioner deems fit. Even under the garnishee proceedings Civil procedure Rule O.20 gives power to the person who is owed money to obtain information from the third party. And in this case a bank can be ordered to pay all the amount on the account to the creditor. Exception c) and d) did not explain in what circumstances can a bank's interests be taken to justify disclosure of confidential information without customer consent in some form. They were presumably offered few problems of interpretation in the simpler world of the 1920's. However, today there are two major areas of concern, which were unknown in the time of Tournier. The first area of concern arises from the growing perception by some banks; at least, they are entitled to release confidential information about customers, without those customers' express consent, to other companies within their own group. In Christofi v Barclays Bank PLC case, it was held that allowing the appeal, the limits of the duty of confidentiality within the banker customer relationship had to be determined by reference to common sense. Banks had various dealings with persons other than account holders and, in dealing with a trustee was in receipt of a statutory notice informing him that his caution had been warned off. Whilst a bank's duty of confidentiality extended beyond secret information, it did not cover information already imparted to the recipient pursuant to statutory provisions, irrespective of the fact that the bank d received the information in confidence during the normal banker customer relationship. From this case, it shows that banks believe that a free flow of information is important to protect themselves and feel customer default is a much more serious problem than formerly. Certainly, the practice of banks in this regard is highly controversial. The second major area of concern relates to the growth of credit reference agencies, and the possible disclosure of confidential information to them by banks. Banks are in the position of

drawing information from, but not contributing information to, the agencies. They have however come under pressure from the Government to contribute credit information themselves. It would seem that public policy, concerned at the spread of default by uncredit worthy borrowers, would wish to extend the scope of the credit information exchanged through the medium of the agencies. According to the Data Protection Registrar offered in 1988 in the UK as a trial period of one year, it still not clear whether those explicitly in favour of disclosing "white"2 information to agencies without customers' express consent would seek to justify doing so under the Tournier exception b) (duty to the public), c) (interest of the bank), or d) (by the ... implied consent of the customer). The courts might be expected to take on any of these propositions. The application of the common law is unclear, since the world has changed and is still changing. Since the world has changed and is still changing, the danger is to customer confidence in the banking system. "Duty to the public" disclosure provision has uncertainty of application; the disclosure involved is "in the interest of' the bank that is to be sold, since its interests as a separate legal entity do not necessarily coincide with those of either its existing parent company or its prospective purchaser; it is insufficiently clear what, in present-day conditions, the contract should be taken to imply; the "white" information made available by banks to credit reference agencies gave the massive erosion of the principle of confidentiality. Reforming seems to be necessary. In the respect of the bankers' duties, the relationship between banker and customer is contractual. There is nothing in such a contract, express or implied, which could require a banker to consider the commercial wisdom or otherwise of the particular transaction. The customer, too, is subject to certain duties of care imposed by the common law. In Suriya & Douglas v Midland Bank 5 case, it was held, dismissing the appeal, that the judge had not erred in concluding that there was no basis for incorporating such an implied term into the contract between MB and SD. The burden of informing each customer about new accounts would be onerous for a bank and there was no general legal duty of disclosure. Finally, the conditions under which banks give opinions on customers, in response to status enquiries, should be seen as a special aspect of the banker's duty of confidentiality discussed above. The bank traditionally gives its opinion "in the ordinary course of business", taking care not to disclose precise details of the state of the account or transactions that have passed through it. Sometimes an industry jargon has involved, on the face of that, vague and inconclusive and only

fully understood by bankers. So it would be desirable for the use of coded language to be discontinued and for the system to be more open, and customer will be better informed about the system works. So before the next case it can be concluded that as the world is changing, these basic elements of the contract do not appear to be clarified, much less of reform. In Verity v Lloyds Bank PLC 19956 case, It was held, awarding V and S damages, that( 1) V and S had specifically sought the manager's advice on the prudence of the transaction and were advised to proceed with it. If bankers gave such advice they were subject to the same duty of care as other professionals. No careful advisor would have advised V and S to proceed with the project. If the manager had advised V and S correctly, they would never have entered into the transaction; (2) the fall in the equitable value of the property would be included in the loss on a "no transaction" basis; (3) damages for loss of earnings were not allowed insofar as the claim was based on the damaging effect of stress and strain, but in principle there was a claim for work lost as a result of furthering the project. No damages were possible for emotional stress. In the last part of this essay, I want to have a look at the future of the bank-customer relationship or financial services. Internet banking and Electronic funds transfer are becoming the hot topic these few years. Many banks and other financial institutions have identified the Internet as an important new medium for marketing and providing a wide range of retail banking services. But while the Internet has delivered a major new business channel for banks, it has also exposed them to new and damaging forms of security risk. (Demeo J 2000)7 So an appropriate legal and liability framework for addressing security failures seems very necessary and important, and following this "difficult issues of jurisdiction and the rules regarding the conflict of laws will clearly arise because of the Internet."(Sabalot A. Deborah, 1995)8 However, the Internet is not a legal person. It cannot use or be sued. It is not resident in any specific location but, at the same time, aspects of the Internet may be considered as being resident in any jurisdiction where there is computer access to it. From above we can conclude that no matter from current point of view or looking forward, significant changes of our world make our law vaguely. It also shows that under the new technology soundness statute protection becomes extremely important and our law reforming should keep up the same speed as new technology developing, so that it could provide a good circumstance or further technology developing. Reforming also becomes desirable and necessary.

END NOTES 1) 2) 3) 4) 5) 6)
7) 8)

1965 CH 1 to 9, 1924 1KB 461 Christofi v Barclays Bank PLC [2000], L.S.G. 29 1848 9 ER 1002 Suriya & Douglas v Midland Bank PLC [1999], L.S.G. 33 Verity Lloyds Bank PLC [1995], N.P.C. 148 DeMeo. J (2000) 'B-commerce and Internet Security', Banking Strategies, Chicago, Sabalot.A.Deborah (1995) 'Financial Services On The Internet', Butterworths Journal Of

Other Reference
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Walters. R (2001) 'Internet Law Cyberliability-the dangers and how to combat them', Tunkel. D (1997) 'The Internet And The People Problem: how to prepare for the age in

Computer Law & Security Report, Vol 17(1):2-72

which financial services will be provided by computers', Butterworths Journal Of International Banking And Financial Law, Vol 12(11):509-552
3)

Sabalot.A.Deborah (1995) 'Financial Services On The Internet', Butterworths Journal Of Broad. C (1997) 'Sets: The London Stock Exchange's Electronic Trading Service',

International Banking And Financial Law, October, 1995

Butterworhs Journal Of International Banking And Financial Law, November, 1997