The Bank's Duty of Disclosure – Towards a New Model

The article deals with the duty of disclosure that is imposed on the bank. Various legal systems impose a duty of disclosure on the bank vis-a-vis the customer. However, this “duty of disclosure” is a narrow duty that only obliges the bank to provide the customer with the informative data about the transaction under discussion. I believe that it is appropriate to impose a far broader duty on the bank – “a duty of disclosure in the broad sense”. In addition to the bank proactively providing all the material details and facts connected with the transaction, the duty of disclosure, according to the broad interpretation, also includes the obligation to explain the essence of the transaction and the legal implications thereof to the customer, as well as the duty to ensure that the customer understands all the information provided to him. The rationale for the imposition of such a wide duty is embedded in the perception of the bank-customer relationship as a fiduciary relationship.