Banking -Special Type Sof Customers
-
Upload
revathi-vadakkedam -
Category
Documents
-
view
220 -
download
1
Transcript of Banking -Special Type Sof Customers
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 1/29
Spécial Types of
Customers
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 2/29
Introduction
Conditions to be Satisfied
a) Any person who is legally competent to enter
into contract
b) Any person who applies to the banker in
proper manner
c) Any person who accepts the terms andconditions lay down by the banker
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 3/29
• Minor
• Pardanashin Woman
•
Illiterate person• Lunatic(unsound person)
• Trustees
• Executors and Administrators• Customers Attorneys
• Joint account
• HUF
• Partnership firm
• Joint stock companies
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 4/29
• Accounts of local government/authorities
• Accounts of Non-Residents Indian
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 5/29
Minor:
• Less than 18 years of age
• Less than 21 years of age if court appoints any
guardian for his property
•
Indian Contract Act 1872-a minor is in competent toenter in to a contract, if made is absolutely void
Guardianship of Minor
1. Natural guardian
2. Testamentary guardian
3. Guardian appointed by court
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 6/29
Precautions to be taken by the
Bankers while opening Minor’s
account• The bank may open a saving bank account in the
name of a minor, in the following ways;
In the name of a minor ,or minors(jointaccount),but a guardian operates the account
Minor him self can operate the account ,if he has
attained the age of 12 years
• Banker should record the date of birth and on
attaining the age of 18 close the minors account and
open a new account in the name of major and
transfer the balance
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 7/29
• In case of the death of the minor
• No risk if the account has a credit balance
• Loans and advances to minor on the guarantee
of a third party
• Draw cheques and bills, if dishonored cannot
file a case
• Minor can be admitted to partnership as a
partner for profits
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 8/29
Pardanashin woman:
• A pardanashin woman is one ,who observes
complete privacy as per the custom or usage of
their own community. Eg; Muslim girls
• A contract entered by such girls is not a valid
,because she observes complete privacy.
• Generally the Banker refuse to open account in
such cases.
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 9/29
Illiterate person:
• He/she shall personally affix his/her thumb
impression in the presence of the bank official
or submit photograph attested by the
magistrate.
• Withdraw money- He/she shall affix thumb
impression on the cheques in the presence of
the bank officials.
• Such persons cannot issue cheques or endorse
cheque.
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 10/29
Lunatic(Unsound Person):
• Contract Act 1872-Unsound person is notcompetent to enter in to a valid contract.
• If made, such contract is void, except those
contracts at the time of soundness.• The banker must suspend the person’s account
as soon as he receives the official information
regarding his unsoundness, till he proved hissanity.
• Banker shall be held liable for such void
contracts
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 11/29
Trustees :
• A trustee is a person who manage the assets
and the properties of another person for the
benefits of the person(beneficiary)mentioned
in the ‘Trust Deed’.
• The person for whom the trust is formed is
known as Beneficiary.
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 12/29
Precautions By Banker
•
The ‘Trust Deed’ to be examined (Name/s,power, trust property)
• In case of two or more trustees-banker should
know which trustee is operating the accountsand signing the cheques. If the trust is fail to
do that, banker will consider all.
•
Death/Retirement of the trustee-if any onedie/retire, rest will carry on .when all are dead,
suspend the account until court will appoint
new one.
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 13/29
• Insolvency of the trustees-not affect the trust
property or trust bank account .if any payment
to the personal creditors of the trustees, bankershall be held liable.
• Precautions to safeguard the trust amount
in the interest of the Beneficiary. • Loans to trust-only if the ‘Trust Deed’
permits such borrowings.
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 14/29
Executors and Administers
• Appointed to realize the assets and repay the debts of the
dead / deceased person.
• When the person is appointed by ‘will’ by a testator for
the purpose is known as executor.
• Get probate from the court after the death of the testatorfor acting as a executor.
• In the absence of ‘will’, by the deceased person, the court
will appoints a person for setting the affairs according tothe law is known as administrator.
• Get letter of administration before acting as
administrator
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 15/29
Bank precautions when an executor/administrator is
appointed.
• Freeze the account on the death of the customer
• Close the account and transfer the balance to a new
account after getting the probate or letter of
administration as the case may be.
• Examine the power of the executors andadministrators in operating the accounts.
• If more than one, any one or all of them can operate
by submitting a letter with signature of all.• Should not permit to transfer the funds to the
personal accounts of the executor/administrator
• No personal loans permitted.
• Death of the executor/administrator
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 16/29
Customers Attorneys
• Person who is appointed by the customer(principal) to
act on behalf of him as an agent.
• Should be written and registered with registrar of
documents or attested by a notary public.
•
General or special attorneysPrecautions by Banker when the customer
open an account in the name of his attorney:
•
Examine the power of attorney• Should collect a copy of the registered or attested
written document
• Examine the type of attorney
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 17/29
• Should not allow overdrafts/borrowings, if not
allowed in the document• Customer can remove the authority of his attorney
by giving a public notice.
• After the removal, any withdrawal by attorney will be
the liability of the banker.
• Power of attorney will be automatically terminated in
the event of the death, insolvency, insanity of the
principal.
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 18/29
Joint Account
When two or more persons jointly open an
account with the banker is known as joint
account.Precautions By Banker:
• Sign the application by all applicant who are
intended to open the joint account.• Instructions from the joint account holders regarding
the operations of the account .
• Appointment of agent/attorney by joint account
holder
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 19/29
• If not specify the operator of the account,honour only
those cheques signed by all joint account holders.
• Loans or overdrafts on the joint and individual
liabilities.
• Death of one of the joint account holder
• Insolvency of the one or more of the joint accountholders.
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 20/29
Joint Hindu Family
Many generations living under the same roof. The
joint family status being the result of birth.
Steps taken by Banker:
• ‘Kartha’ is operating the account for the family
business.
• Loan documents should be signed and executed by all
the adult male members in the family
• If the loan is not given for the family business, the
coparceners will not be held liable.
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 21/29
• Coparceners liability is limited to their interest in the
joint property.
• If any minor coparcener, the
guardian(father/mother)should sign the documents.
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 22/29
Partnership Firm
• Definition according to partnership Act of 1932.
• Partnership Deed
Steps taken By Banker:
• Carefully examine the ‘partnership Deed’(nature of
business, capital by partners, number of partners,
partner who will operate the account etc..).
•Account in the name of firm as per the partnershipdeed not in individual name.
• Open an account by receiving the application form
from any partner signed by all.
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 23/29
• Submit a partnership letter signed by all, should
include the name of the partner who operate the account.If name is not mentioned, honour the cheque that are
signed by all.
• Authority of operating partner can be revoked by any
partner by giving notice to the bank
• Death/retirement/insolvency/admission of the partner-
close the account and open a new account in the name of
the reconstituted firm• Operating partner cannot appoint another person to
operate the account without the consent of all in writing.
• Transfer of funds from firms account to partner/s
account – Bank will be liable.
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 24/29
Joint Stock Companies
• Artificial person with perpetual succession.
• Registered under Companies Act of 1956.
• Separate legal entity from its members.
• All power to enter in to a valid contract
Conditions to be fulfilled and steps taken by Banker:
• Verification of documents
Certificate of incorporation and commencement
AOA
MOA
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 25/29
• The banker carefully examine these documents in order
to know ;
The powers of the directors
Procedure adopted for borrowing and its limit, etc..
• Banker should obtain the copy of the resolution passed
by the BOD with regard to opening bank account.• Loans only up to the limits mentioned in the MOA.
• Loans and advances only through authorized persons.
•
Transfer of fund to directors personal account.
Accounts of Local
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 26/29
Accounts of Local
Government/Authorities•
Includes Corporations, Municipalities, District board,taluk boards, etc…
• Accounts of the local authorities are desirable by the
banks
Precautions By Banker:
• The relevant statute under which the local authority is
created has to be understood by the banker .
• Banker should know the provisions regarding theoperation of the accounts which is mentioned in the
statute.
• Has to ascertain the office bearers to operate the
account.
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 27/29
• Account in the name of local authority only.
• Borrowing power, securities, and the extent to which
the local authority can borrow have to verify in the
statute.
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 28/29
Accounts of Non-Residents Indian • Banks in India operate various types of deposit
accounts for NRI’s both in Indian Rupee and Foreigncurrencies.
Two Types Of Accounts:
1. Rupee Accounts
2. Foreign currency accounts
1. Rupee Accounts – There are two types of accounts
which can be opened in the name of NRI;
a) Ordinary Non-Resident Rupee Accounts:
Just like any other bank a/c
Local fund mobilized by NRI
Do not qualify for remittance out side India
8/4/2019 Banking -Special Type Sof Customers
http://slidepdf.com/reader/full/banking-special-type-sof-customers 29/29
b) Non-Resident (External) A/c:
NRI’s open accounts in any of the leading commercial
banks in India
Any interest or capital earned in these accounts will be
transferred in foreign currency as per the current
exchange rates.
Investment in government securities, mutual funds-UTIetc..
Foreigners are not allowed to open these kind of a/c’s
2. Foreign Currency Accounts Unit of account is foreign currency.
Exchange rate guaranteed by the banker
This scheme is for deposit of money for a period of 1-3
years