CHAPTER-5 CURRENT ACCOUNTS

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CHAPTER-5

CURRENT ACCOUNTS

CHAPTER – 5 - CURRENT ACCOUNTS

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CURRENT ACCOUNTS

Table of Contents Paragraph No. Page No.

Introduction परिचय 1 3

Introduction of Accounts खातों का परिचय 2 3

Types of Accounts खातों के प्रकाि 3 3

Opening of Accounts खातों का खुलना 4 3

Minimum Balance न्यूनतम धनिाशि 5 5

Temporary Overdrafts अस्थायी अधधविकर्ष 6 5

Service Charges/Unremunerative Accounts

सेिा प्रभाि / अलाभकािी खाते 7 5

Interest Payable on Current Deposit Accounts

चालू जमा खातों में देय ब्याज 8 6

Balance Confirmation Letters िेर्िाशि पुष्टिकिण पत्र 9 7

Current Account Statements चालू खाता विििणी 10 7

Duplicate Current Account Pass Books/Statements

चालू खात ेकी प्रततरूप पास बुक / खाता विििणी

11-12 8

Return of Paid Cheques भुगतान हो चकुी चेकों को िापस लौिाना 13 8

Dormant Current Accounts तनष्टिय चालू खात े 14 9

Register of Dormant Current Accounts

तनष्टिय खातों का िष्जस्िि 15 10

Other Instructions अन्य तनदेि 16 11

APPENDICES

Appendix No.

Particulars Page No.

I Declaration And Undertaking To Be Obtained From Current Account-Holder (Companies/Firms) Not Having Any Borrowing/Banking Facility With Any Other Branch/Bank

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II Declaration And Undertaking To Be Obtained From Current Account Holder(Companies/Firms) Having Borrowing/Banking Arrangement With The Bank / Other Banks

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III Specimen of Register of Statements despatched to Account Holder 14

IV Specimen of letter of Undertaking for return of Paid Cheques to be obtained From Account Holders

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V Specimen of First Letter of Advice - Inoperative Accounts 16

VI Specimen of Second Letter of Advice - Inoperative Accounts 17

VII Specimen Statement of current Accounts Opened/Maintained in the Names of Close Relatives of Staff Members

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VIII Current Account Rules 19


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Introduction

1. Current accounts are opened mainly by business community, corporate bodies or the like where the account holder has often to receive money and to make a number of payments. No interest is paid on balances in current accounts except in the cases referred to in paragraph 8 and there are no restrictions as to the number of deposits into and withdrawals from the account per day.

Introduction of Accounts

2. The account shall be opened on the basis of the documents stipulated, and in their absence, opened on the basis of introduction by an existing customer or any person, who is in a position to satisfy the Bank by submitting his/her documents. Such documents are Passport/PAN Card/Voter’s Identity Card/Driving License and recent passport size Photograph/Employer’s ID Card (or satisfactory confirmation/letter from Employer)/Letter from a recognized public authority or public servant verifying the identity and residence of the customer to the satisfaction of the Bank/Photo Credit Card. (For detailed instructions on "Introduction", refer to chapter 1 on Account Operation (Deposits) – General Instructions).

Types of Accounts 3. Current accounts are opened for approved persons only. Current accounts may be opened in the names of:

i. Individual - Single Accounts ii. Two or more individuals - Joint accounts (Can be opened with

operational instructions “Either or Survivor” or Former or Survivor” or “Any One/All of the Joint Account Holders”.)

iii. Sole proprietary concerns iv. Partnership Firms v. Joint Hindu Families or Firms vi. Limited Companies vii. Associations, Clubs, Societies, etc. viii. Trusts ix. Executors and Administrators x. Provident Funds xi. Liquidators xii. Other Banks xiii. State Financial Corporations

In approved cases, branches may open non-operating accounts called "Collection Accounts". (For detailed instructions for dealing with these accounts, refer to chapter 1 on Account Operation (Deposits) – General Instructions)

Opening of Accounts

4.1 To fall in line with the RBI’s guidelines on Know Your Customer (KYC) policy the account opening form has been standardized. Also refer to the Current A/c rules as per Appendix VIII.

A new form is to be obtained at the time of opening of accounts for new customers. And for opening an additional account in an existing account title, only additional account opening Card is to be obtained. For example, if A and B have earlier opened a Savings Bank Deposit Account where this new form has been obtained, incase they desire to open a Term deposit account, the additional Card need only be obtained. The new account opening form should be obtained in all existing accounts also in a phased manner.

A separate specimen signature Card should be signed by all the account holders irrespective of the mode of operations on the account. The nomination in the prescribed format (Specimen Appendix I of chapter 1 on Account Operation (Deposits) – General Instructions) should be obtained in all personal accounts/sole proprietary accounts where such nomination is desired by the account holders. (Refer Chapter 1 on Account Operation (Deposits) – General Instructions).


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4.1 Branches are normally opening current accounts and allow operations therein without making any inquiries whether the account holder is enjoying any credit facilities with other Bank. It may so happen that the borrowers of one bank open current accounts with other banks and conduct operations through such accounts instead of routing all their transactions in the accounts maintained with the lending bank and thereby violate credit discipline. This is more common where a customer is enjoying borrowing facilities against book debts. Keeping in view the importance of credit discipline for reduction in NPA level of lending banks, branches should, at the time of opening current accounts, insist on a declaration to the effect that the account holder is not enjoying any credit facility with any other bank. Branches should scrupulously ensure that they do not open current accounts of entities which enjoy credit facilities (fund based or non-fund based) from the banking system without specifically obtaining a Status reports/No-Objection Certificate from the lending bank(s). Branches should note that non-adherence to the above discipline could be perceived to be abetting the siphoning of funds and such violations which are either reported to RBI or noticed during our inspection would make the bank / branch liable for penalty under Banking Regulation Act, 1949.

Branches may open current accounts of prospective customers in case no response is received from the existing bankers after a minimum waiting period of a fortnight. If a response is received within a fortnight, branches should assess the situation with reference to information provided on the prospective customer by the branch concerned and are not required to solicit a formal no objection, consistent with true freedom to the customer of branch as well as needed due diligence on the customer by the branch.

(iii) In case of a prospective customer who is a corporate or large borrower enjoying credit facilities from more than one bank, the branch should exercise due diligence and inform the consortium leader, if under consortium, and the concerned bank’s branch, if under multiple banking arrangement.

i. Declaration and undertaking as per Specimen - Appendix I: From a firm/company not having any borrowing/banking facility with any other bank.

ii. Declaration and undertaking as per Specimen - Appendix II: From a firm/company enjoying borrowing/banking arrangements with the Bank as well as with other banks.

4.2.1 RBI has once again instructed that Bank branches should not open current accounts of entities which enjoy credit facilities (fund based or non-fund based) from the Banking system without specifically obtaining a no-objection certificate from lending bank/s concerned. Non-adherence to the above discipline could be perceived as abetting the siphoning of funds and such violation would render the concerned Bank liable for penalty under Banking Regulation Act.1949. 4.2.2: However where the diligence is carried out on the request of a prospective customer who is a corporate or large borrower enjoying credit facilities from more than one branch, the branches may inform the consortium leader, if under consortium and the concerned banks if under multiple Banking arrangement. 4.2.3 Where no response is received from the existing bankers within a minimum waiting period of a fortnight current a/cs of the prospective customers can be opened. 4.2. 4 Where a response is received from the existing banker of the prospective customer, the branches should assess the situation with reference to the information provided on the prospective customer by the concerned Bank and are not required to solicit a formal no objection which would be consistent with true freedom to the customers of Banks as well as needed due diligence on the customer by the Bank. Branches should advise these lending banks the fact of opening of the account by the firm/company.


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4.3 In case of Current Accounts opened in the name(s) of the staff/relatives of staff members the following procedure should be adopted:

a. Details of all Current Accounts in the name(s) of close relatives of staff members operated and maintained at a Branch should be reported to the next Controlling Authority i.e. Regional Manager. The format for reporting purpose is given in Appendix VII.

b. Branches which do not have any such account should submit a `Nil' Statement. c. The branches should also submit to the Regional Manager the particulars of

operations in these accounts every quarter as per the format given in Appendix VII. Regional Manager will scrutinize and report to Head Office their findings if warrants in view of the Risk Management.

d. Branch Manager is the authority to authorise the opening of such accounts. e. Accounts of staff/relatives of staff members should be segregated from other

Current Accounts. f. All credit vouchers relating to all staff accounts including paying-in-slip should

be countersigned by an officer of the Branch. g. The current accounts of all staff members held in their names either singly or

jointly with any other person should be checked by an officer of the branch. h. Manager should carry out periodical scrutiny or test check of such accounts.

4.4 A Other Accounts :While the operational instructions can be in any manner (say either or survivor or former or survivor or any one Partner/Director/Trustee etc,), the same would be jointly authenticated in the account opening form in case of Partnership Firms and in case of Limited Companies or Trusts or Societies etc would be in accordance with the Board Resolution or the Trust Deed or the Bye Laws as the case may be.

Minimum Balance 5.1 The maintenance of minimum balance in current Deposit a/c (applicable to all centres) and penalty charges for not maintaining the same will be as applicable from time to time. However, branches may relax the minimum balance criteria in respect of current accounts opened by SSI units for limited purpose of transacting their business with Government Departments / Agencies with prior permission of the Regional Office.

5.2 While opening the account, the official concerned should explain to the prospective customer the requirement of maintaining minimum balance and the penal charges in case of non compliance.

Branches must display on the Notice Board at conspicuous place in the Banking Hall the above details and ensure that it draws the attention of customers.

Temporary Overdrafts 6. As of now, branches are not authorized to sanction / approve any overdrawing in current accounts

Service Charges/ Unremunerative Accounts 7.1 Properly maintained Current Accounts are very valuable to the Bank, but current accounts maintaining an average balance below the stipulated minimum balance in which there are very heavy operations not commensurate with the balance maintained or accounts maintaining a small average balance and taking undue advantage of the Bank's free remittance facilities with no benefit to the Bank by way of deposits and/or other remunerative business or accounts with small average balances in which small denomination notes and small coins are excessively tendered or in which cheques are returned for want of funds, cause considerable operational strain and are therefore, unremunerative and uneconomic. Attention of account holders who do not maintain minimum balance should be drawn by sending a suitable letter. In the case of other accounts of the categories mentioned above, Branches should draw the attention of the account holders to the necessity of opening their accounts in accordance with the rules of business of the Bank. If repeated requests do not have any effect on the customers, Branches should endeavour to weed out such accounts.


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7.2 Branches should endeavour to build up good current account business by gradually and systematically weeding out very poorly conducted and totally unremunerative accounts. In dealing with such unremunerative accounts, the Manager must use his discretion in the best interest of the Bank and levy service charges half-yearly, where necessary. Service charges have a way of irritating account holders with wide repercussion on the Bank's business but the criterion should be whether the Branch would on the whole be a loser if the account is closed.

7.3 In view of the overall increase in the cost components in servicing the current account business and with a view to bringing uniformity in the method for calculation of service charges to be levied every half-year, a schedule of service charges is fixed by Head Office and circulated to Branches from time to time. The charges are fixed on the following criteria

i. to have uniformity in the scale of charges levied at Branches; ii. to have a link between the costs incurred and charge recovered;

iii. to formulate a base on which future charges can take place with increase or decrease in costs.

7.4 Levying of service charges as per schedule in force from time to time may sometimes result in complaints from the account holders. The Branch Manager must devote personal attention to such complaints and handle them with tact, patience and moderation. In the case of accounts of valued and important account holders Branch Managers may recommend to the Regional Managers to waive the service charges though applicable. However, Branch Managers should use discretion with circumspection. Service charges in current accounts of customers belonging to the Defence Services or of their immediate dependents may be waived.

7.5 When unremunerative accounts are prudently weeded out from time to time, more time and attention can be devoted to accounts which are satisfactorily conducted. This will enable the Bank to improve its service to account holders by making quick payment of cheques and rendering other services.

7.6 Service charges should be credited to Profit and Loss Account - Service Charges Current Account. Debit Voucher for refunds should be posted on the credit side of Profit and Loss Account and deducted.

7.7 Each year as per frequency advised, the service charges, for not maintaining the minimum balance should be debited to such accounts. If at the time of levying service charges, the balance is not sufficient to provide minimum charges in an account, it would be advisable to leave, say Re. 1/- in the account to keep it running and take the remainder towards service charges. Interest Payable on Current Deposit Accounts

8.1. In terms of the Reserve Bank of India's directive, payment of interest on current accounts except the accounts of the exempted categories mentioned below is prohibited. Interest is also not payable on margin money held in current accounts with Branches. 8.2. Interest should be paid on the credit balances lying in a current account in the name of a deceased depositor, from the date of death of the depositor till the date of payment of his/her legal heir(s), representative/s and nominee/s at the rate applicable to Savings Bank Deposits as on the date of payment. This is also applicable to current accounts in the name of a proprietorship firm where the sole proprietor is deceased.

8.3. At times interest becomes payable in accounts where the cheques/other instruments deposited are drawn on the outstation branches and sent for collection, if the proceeds are not realised/credited to the customer's accounts or the unpaid instruments are not returned to the customers within a specified period from the date of their lodgement. Interest at the rate of as conveyed by Head Office from time to time should be paid for such delayed collection. Such interest should be paid only when the amount of interest is Rs. 10/- or more. Interest should not be paid on cheques/other instruments lost in transit.

8.4. Such cases, however, should be rare as with the services of the Service Branches, Courier Services/Speed Post speedy collection of instruments is possible. Where such interest is to be paid for the delay in collection, the matter should be reported to the Regional Manager giving specific reasons for the delay and prior sanction be obtained


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before payment is made. It should be noted that the period specified has been allowed only for the purpose of calculating interest as aforesaid and under no circumstances it should be construed that the Bank can take this much time for collection/return of outstanding instruments. Prompt despatch of collection instruments and timely follow up would ensure a smooth collection service.

Balance Confirmation Letters 9.1 In view of the instructions printed in the Current Account Statement Form, it is not necessary for the Branches to send a Balance confirmation letter to all current account holders except holders of:

i) Overdraft Accounts ii) Trust Accounts iii) Non-resident Accounts iv) Accounts, where the Branch Manager considers it necessary in the Bank's

interest to obtain confirmation letter. 9.2 Branches should send to these account holders a Balance Confirmation Letter once a year (as of 31st March) as soon after March closing as possible.

9.3 When Balance Confirmation Letters are received back from these account holders duly signed, they should be attended to immediately. Signatures on Balance Confirmation Letters should be verified by cancelling officers in the usual manner. (Balance Confirmation Letters must be signed by account holders in exactly the same manner as cheques are drawn on the accounts.)

9.4 the Balance Confirmation Letters should be pasted in a separate letter pasting file or file properly, which should not be accessible to unauthorised persons.

9.5 The Manager should pay personal attention to ensure that Balance Confirmation Letters are received back duly signed by the holders of:

(a) Trust accounts (b) Non-resident accounts (c) Accounts where operations are few and far between (d) Accounts where there have been occasions for return of cheques for reason "Drawer's signature differs" (e) Accounts operated by the Attorney or the Mandatory. (The letter should be signed by the Donor/ Mandator).

9.6 Apart from the Balance Confirmation Letters sent as on 31st March, the Manager may also send at his discretion Balance Confirmation Letters on any other days for the above-mentioned accounts.

9.7 Account holders who have not confirmed their balances may be requested to do so whenever they happen to come to the Bank personally. If necessary, reminders should be sent. Current Account Statements 10.1 Branches may send statements of accounts at the option of the current account holders. If a statement of account is to be sent, the frequency thereof should also be noted. In accordance with these instructions, prepare and despatch statements of accounts to account holders within 5 days from the date to which the statements relate.

10.1A. To obviate delay, the current account statements should be sent to customers in a staggered manner instead of sending them by a target date every month, in case the branch is having large number of current accounts. Otherwise, statements should be dispatched in one lot.

10.2 A credit entry in a statement may be binding on the Bank if the account holder can show that he altered his position by relying on such a credit entry. With regard to a debit entry in a statement, the account holder is under no duty to check the entries and he can repudiate incorrect debits to his account. Care should be taken to see that the account holder's credit is not harmed by return of a cheque drawn in reliance upon the erroneous posting the account. The system of authorisation in Branches, therefore, must be such that mistakes or errors in postings such as, posting of wrong amount or posting in wrong account and extension of wrong balances are avoided. When any mistake or error in posting is found, the account holder should be advised immediately and the error should be rectified.


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10.3 It is desirable to avoid abbreviations while posting the entries. The customers must understand the entries without difficulty. However, the following 12 standard abbreviations may be used.

(i) CLG Clearing Cheque (vii) Rpp Remittance Per Post

(ii) D/W Dividend Warrant (viii) Rtd. Returned

(iii) F.D.R Fixed Deposit Receipt . (ix) Reptd. Represented

(iv) INT Interest (x) S/C Safe Custody

(v) PRO Proceeds (xi) S/I Standing Instructions

(vi) R/C Returned Cheque (xii) TR Transfer Cheque on Ourselves

10.4 Full postal address of the account holder should appear on the first sheet of the statement; each statement sheet should bear the name, number of the account. 10.5 As a rule, statements should be despatched by post or hand delivery, unless account holders call for them personally; statements may, however, be handed over in closed covers to the known messengers or representatives of account holders. A record should be kept in a register/pass book of statements of accounts despatched to account holders. (A specimen of the ruling is given in Appendix III). Where the statement is returned undelivered due to change of address, efforts should be made to contact the account holder to obtain the correct address.

Duplicate Current Account Pass Books/Statements 11. Branches may issue duplicate statements to account holders upon their written request. The letter should be signed in the same manner as cheques drawn on the account are signed. Charges at the rate prevalent at the relevant time should be recovered from the account holders. Care should be taken to see that no annoyance is caused to valued account holders. The word DUPLICATE should be written on the statement and a suitable remark should also be made in the a/c.

12. Charges for issue of duplicate Statement of account should be credited to Profit and Loss Account `Miscellaneous Receipts'.

Return of Paid Cheques This service is not available as of now till further instructions. However for the sake of information, the following may be noted by the branches:

13.1 Some account holders require their paid cheques to be returned to them at agreed intervals. The facility of returning paid cheques should be extended to only approved customers selectively at the discretion of the Manager. A Letter of Undertaking (Specimen-Appendix IV) should be taken when any such arrangement for the return of paid cheques is made in an account. A note of such arrangement should be made at in the account under special instructions.

13.2 Cheques which are in dispute should not be returned until the dispute is settled. Paid cheques may be returned upto the last date for which the current accounts are balanced.

13.3 It should be ensured that the paid cheques (after authorisation by an officer is completed) are kept separately every day neatly arranged and bundled till they are required to be sent along with the duplicate copy of the statement of account. A statement of account should be prepared in triplicate - the original serving the purpose of statement of account, the duplicate to be sent along with the paid cheques and the last copy to be retained at the Branch to serve as the "Duplicate Voucher" for the paid cheques returned which should be carefully preserved like vouchers either by keeping it along with the bundle of vouchers relating to the month or by keeping it filed in a separate file. At the time of returning the paid cheques (periodically), it should be ensured that they are arranged in the same order in which they appear in the statement of account and particulars of their dates and the names of banks through which they were paid should be entered under the columns provided for this purpose in the


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statement of account (second and third copies) - these entries are necessary to have a complete record of the paid cheques returned.

13.4 At the time of sending the copy of the statement of account with the paid cheques, a printed covering letter should be used as a covering letter - this also contains a counterfoil which is required to be returned by the account holder acknowledging receipt of the cheques and confirming the balance in the account. It is important to get back the acknowledgment (counterfoil) duly signed by the customer (in case of debit balance, over appropriate revenue stamp) and the matter should be followed up until it is received.

13.5 If any difficulty is experienced in obtaining the counterfoils containing the acknowledgment-cum-balance confirmation promptly and regularly from a customer, the Branch Manager should suitably notify the customer, regretting the Bank's inability to continue the facility and should withdraw it.

Dormant Current Accounts 14.A savings as well as current account should be treated as inoperative / dormant if there are no transactions in the account for a period of two years. For the purpose of classifying an account as inoperative, both the types of transactions, i.e. debit as well as credit transactions induced at the instance of customers as well as third party should be considered. RBI has clarified that interest on term deposits credited to the account of the customer should be treated as customer induced transaction since it is according to the mandate of the customer. In such cases, ,the account should be treated as an operative account as long as the interest on term deposit account is credited to the Savings Bank account. The Savings Bank account can be treated as inoperative account only after two years from the date of the last credit entry of interest on fixed deposit account. The Current A/c termed as dormant should be transferred in February and August each year to Sundry Deposit Account - "Unclaimed Balances" maintained under the head "Sundry Deposit". The total of the balances in this head being reflected in the General Ledger account "Sundry Deposits". 14.2 Accounts should not be transferred to Sundry Deposit Account - "Unclaimed Balances" in the following cases:

a) where an account is stopped under a garnishee or other Court order b) where operations of an account are stopped till the grant of legal representation is received c) where, for particular reasons, discretion would dictate that an account should

remain current.(If, for instance, there is an operative Account No. I and a dormant Account No. II with a small balance, and the account holder is known to be doing active business, it would ordinarily be decided not to transfer the balance of the dormant Account No. II to Sundry Deposit Account - "Unclaimed Balances").

Operationalising the Dormant / Inoperative accounts i. Branches should identify all the inoperative accounts, not operated for more than two

years, to be classified as inoperative account through system every half year. Branches should approach the customers and inform them in writing (A suitable system generated communication will be sent to such customers ) exhorting them to (a) activate their accounts or (b) they may be asked to provide details of their existing Bank account details, if they are shifted to new area so as to transfer the amount lying in the account.

ii. Branches are required to make an Annual review to identify inoperative accounts and send communication to the customer stating that the account will slip into the inoperative/dormant category within 3 months. In all such cases, where the accounts continue to be inoperative even after sending a written reminder, the customers will be contacted over ‘phone or in person for getting the accounts activated and a record thereof shall be maintained at the branch. In cases where the letters sent by the Bank are returned undelivered, the branch should make efforts to contact the customer immediately thereafter by approaching the introducer or the neighbours at the last recorded address and gather information about the accountholder’s present whereabouts.


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iii. In all other cases, i.e. accounts with balances of less than Rs 1,000/-, system generated reminders should be sent after one year from the date of last customer induced operation in the account and necessary follow up through phone calls/ personal visits to the address given at the time of account opening/ last recorded address for getting the account activated. If necessary help of the introducer /customer’s neighbours be sought to contact / locating the customer for the above purpose. In case of deceased customer the details of legal heirs are to be obtained.

Steps to be taken when requests for activation are received When a request for activation of a dormant account is received, approval for activation should be accorded by a designated officer at the branch. She/he will verify and satisfy her/ himself that the account was opened in a KYC compliant manner and the reasons adduced by the account holder for not operating the account are genuine. Fresh set of KYC documents in respect of residence proof shall be obtained and the same should be confirmed by sending letter to the above address given by the customer. Further it should be seen that the amount of deposits being made is commensurate with the occupation level of the customer, as declared in the account opening form and the transaction should be closely watched.

Register of Dormant Current Accounts 15.1 Particulars of dormant current accounts transferred to Sundry Deposit Account - "Unclaimed Balances" should be maintained in the Register of Dormant Current Accounts, so that these particulars are available at one place, year after year, and obviate the necessity of recording them in each subsequent new Sundry Deposit Ledger opened. Balances of outstanding dormant accounts in the Register of Dormant Current Accounts should be jotted half-yearly and tallied with the Balance of Sundry Deposit Account - "Unclaimed Balances". 15.2 The Register should be opened alphabetically, with adequate number of pages allotted to each alphabet so that, in future years also the record is maintained alphabetically. The particulars in the Register of Dormant Current Accounts should be as follows:

a. date on which the account was opened b. file number, account number and special instructions, if any c. title of the account d. balance and date of last operation on the account e. cheque series numbers outstanding f. date when balance paid and how paid g. remarks.

15.3 At the end of the Register, Branches would ensure that the total of "Unclaimed Balances" in Sundry Deposit Ledger agrees with the outstanding balances of all dormant accounts in the Register. When recording transactions, the voucher - credit or debit- should be posted in:

a) Sundry Deposit Account - "Unclaimed Balances" and

b) The Register (in the pages with special ruling which are provided at the end). A fresh balance should be extended in the Sundry Deposit Account - "Unclaimed Balances" and in the pages at the end of the Register. The balances shown both in the Sundry Deposit Account - "Unclaimed Balances" and in the pages at the end of the Register must always agree.

15.4 When transferring balances of inoperative current accounts to Sundry Deposit Account - "Unclaimed Balances", a list of such accounts should be prepared with one set of transfer vouchers for the consolidated balance of all the accounts to be transferred. Postings should be made in the respective accounts in the ledger from the list and the credit voucher should be posted in Sundry Deposit Account - "Unclaimed Balances", particulars of current accounts, balances of which are transferred, together


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with the respective balances should be entered in the Register as required in the foregoing paragraphs. The amount of credit voucher should also be entered in the last pages in the Register. The occasions to debit Sundry Deposit Account - "Unclaimed Balances" arise when an account holder claims the balance of the dormant account or starts operating on the account. 15.5 Before returning a cheque with the reason "Account closed", the officer should first ascertain (from the Cheque Book Issue Register) the title of the account and search for the account in the identified Dormant Current Accounts. If an account is traced in the Dormant accounts, before paying the cheque, the balance of the dormant account (as noted in the Register) should be transferred from Sundry Deposit Account - "Unclaimed Balances" to the appropriate current account ledger. All particulars of the dormant account available in the Register should be noted in the regular ledger account. While effecting the transfer of balances of dormant accounts from Sundry Deposit Account - `Unclaimed Balances' to current account ledgers, any payment (i.e. debit vouchers) from this account should be permitted only under the signature of two authorised officials, one of whom must be the Branch Manager who will do so after satisfying themselves that the proposed operations on the accounts are under circumstances which do not arouse any suspicion. The drawers' signatures on cheques on inoperative accounts should be verified with more than usual care. Such cases are to be reported to Regional Manager immediately. 15.6 Under Section 26 of the Banking Regulation Act, 1949, banks are required to submit to the Reserve Bank of India the particulars of accounts dormant for ten years. A record of the date of last operation in dormant account is, therefore, necessary so that accounts dormant for ten years can be reported to the Reserve Bank of India. 15.7 It should be borne in mind that the particulars of accounts dormant for ten years is to be obtained from : a) Current Accounts identified and marked to by the system b) Current accounts which may be dormant for ten years (but balances of which are not transferred to Sundry Deposit Account - "Unclaimed Balances") for some special reasons. 15.8 It is of utmost importance that the balances in all accounts which are dormant or where operations are few and far between are confirmed on the Bank's usual Balance Confirmation Letters. The Managers should give personal attention to see that this is done. Letters (Specimen - Appendices V and VI) may be sent to account holders whose accounts have been dormant with comparatively small balances for a considerable time. The shorter letter (Specimen - Appendix V) should first be sent to the account holder whose account is dormant. A diary note may be taken for a reminder to be sent six months later. At the expiry of six months the account should again be scrutinized. If the account holder has not taken appropriate action either by closing the account or by resuming transactions, the second and longer letter (Specimen - Appendix VI) may be sent. The Branch Managers are advised to use these forms with discretion. They should not hesitate, where circumstances require, to send a polite, specially worded letter, instead.

Other Instructions

16. The Instructions given in Chapters on Account Operation (Deposits)- General Instructions and Current/Savings Bank Accounts - General shall also apply to Current Accounts.

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APPENDIX I (Paragraph 4.1(I))

DECLARATION AND UNDERTAKING TO BE OBTAINED FROM CURRENT

ACCOUNT-HOLDER (COMPANIES/FIRMS) NOT HAVING ANY BORROWING/BANKING FACILITY WITH ANY OTHER BRANCH/BANK

Date :

To, The Branch Manager, Narmada Jhabua Gramin Bank, _________________________Branch/Office Dear Sir, With reference to my/our application dated________________________for opening current account in your bank, I/We confirm and declare that I/We do not have any advance or other banking facility from any branch of your bank or of any other bank and I/We undertake that I/We shall not obtain any advance or other banking facility from any other branch of your bank or of any other bank without giving to you prior written notice.

Yours faithfully,

(Authorised Signatories)

(To be signed by all Partners of a firm/to be signed by authorised Directors of a Limited Company)


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APPENDIX II (Paragraph 4.1(II))

DECLARATION AND UNDERTAKING TO BE OBTAINED FROM CURRENT

ACCOUNT HOLDER(COMPANIES/FIRMS) HAVING BORROWING/BANKING ARRANGEMENT WITH THE BANK / OTHER BANKS

Date :

To, The Branch Manager, Narmada Jhabua Gramin Bank, ________________________Branch/Office Dear Sir, With reference to my/our application dated_______________________for opening current account with your Bank, I/We furnish below the details of all borrowings/banking arrangements made by us with your bank as well as other banking institutions:

Name of the Bank and Address

Nature and details of banking / borrowing arrangement

We confirm and declare that the above are all the existing banking/borrowing arrangements made by us. We undertake to furnish to you promptly details of any changes in respect of the above and/or any other information in this connection, which may be required by you.

Yours faithfully,

(Authorised Signatory)

(To be signed by all Partners of a firm/to be signed by authorised Directors of a Limited Company.)


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APPENDIX III (Paragraph 10.5)

Specimen of Register of Statements despatched to Account Holders Year______

Instructions : 1. The record may be kept ledger-wise and period-wise either in the same register/pass

book or by using separate registers/pass books. 2. Cut sheets containing twelve months (from January to December) may be provided

in the register/ pass book as per the requirements of the Branch, preferably for five years. The cut sheets may be provided on the lines of the existing Daily Extract of Overdraft Balances. The columns may, however, be provided as per the specimen.

3. The dates on which the statements (for previous month) are sent to the customer

may be mentioned in the appropriate month-wise columns provided in the register/pass book.

4. In the case of monthly statements, all endeavours should be made to send the

statements to the customers before the 5th of the subsequent months. 5. A similarly ruled register/pass book may be maintained for other periodical

statements of accounts.

Account Number

Title of the Account

January February March April May June July August September Remarks

A1 Amit & Co.

1 2 2 1 and so on

A2 Attract & Co.

2 2 2 1 and so on

A3 A. V. & Co.

2 2 2 3 and so on

A4 A. X. & Co.

3 3 2 5 and so on


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APPENDIX IV (Paragraph 13.1)

Specimen of letter of Undertaking for return of Paid Cheques to be obtained From Account Holders

On stamped paper of

appropriate value Place ;

Date: To, Narmada Jhabua Gramin Bank, ______________________Branch Dear Sirs,

Re. : Our Current Account with your branch at..........................

In consideration of your having, at our request, agreed to return to us each week/month cheques drawn by us on your Branch at......................, we hereby undertake and agree with you as follows: (1) We shall confirm the balance whenever called upon by the Bank to do so.

(2) We shall give you a receipt and acknowledgement for the cheques delivered each

week/month in the prescribed form.

(3) We shall keep the said cheques safe and secure for a period of at least eight years from the date of their payment.

(4) We shall not part with the said cheques except when required by law.

(5) We shall produce the said cheques before the Income Tax Authorities whenever called upon to do so.

(6) We agree to indemnify you against any losses, damages, costs, expenses, etc., you

may incur or be put to by reason of your acting upon our request as above.

Yours faithfully,

________________ (Authorised Signatories)


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APPENDIX V (Paragraph 15.8)

Specimen of First Letter of Advice - Inoperative Accounts Ref. No. Date......................... _________________________________________ _________________________________________ _________________________________________ Dear Sir/Madam,

Re. : Your Current Account

We observe that your current account has been dormant for some time and

your balance at the close of business today is Rs........................in your favour. 2. We trust that it is not your desire to cease banking with us and we would be very glad if you would resume deposits in and withdrawals from your account. 3. If the account does not suit your immediate needs, we will endeavour to meet your requirements if you will very kindly communicate with us.

Yours faithfully, Manager


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APPENDIX VI (Paragraph 15.8)

Specimen of Second Letter of Advice - Inoperative Accounts Ref. No. Date.......................... _________________________________________ _________________________________________ _________________________________________ Dear Sir/Madam,

Re. : Your Current Account We observe that your current account has been dormant for some time and your balance at the close of business today is Rs._____________in your favour. 2. We trust that it is not your desire to cease banking with us and we would be very glad if you would resume deposits in and withdrawals from your account. 3. If the account does not suit your immediate needs, we will endeavour to meet your requirements if you will very kindly communicate with us. 4. Should you, however, have decided definitely to discontinue making use of your account with us, we should be glad if you would please instruct us regarding the disposal of the balance standing to your credit and return to us the unused cheque forms in your possession.

Yours faithfully, Manager


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APPENDIX – VII (Paragraph 4.3(a))

Specimen Statement of current Accounts Opened/Maintained in the Names of Close Relatives of Staff Members

BRANCH FOR THE QUARTER ENDED

Name of the Account

Account opened on

Account introduced

by

Activity Constitution Name(s) of Proprietor/Partners/ Directors and particulars of staff member who is a close relative of the Proprietor/Partner/Director & nature of relationship

Remarks on conduct of Account such as Minimum & Maximum balance, cheques returned unpaid if any, and reasons therefor, overlimit granted if any etc.


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APPENDIX – VIII (Paragraph 4.1)

NARMADA JHABUA GRAMIN BANK : REVISED CURRENT ACCOUNT RULES

Opening of Accounts

Current accounts would be opened for approved persons/firms such as Individual - Single Accounts. Two or more individuals - Joint accounts Sole proprietary concerns. Partnership Firms. Joint Hindu Families or Firms. Limited Companies. Associations, Clubs, Societies, etc. Trusts. Executors and Administrators. Provident Funds. Liquidators. Other Banks. State Financial Corporations. Note: In approved cases, branches may open non-operating accounts called "Collection Accounts".

Account Opening Form

Common Account Opening Form and Bill Indemnity Letter should be completed in all respects and signed by all the account holders irrespective of the mode of operations on the account.

Opening and Introduction of Accounts/ Identification of the Customer

The account shall be opened on the basis of any of the documents stipulated below, and in their absence, opened on the basis of introduction by an existing customer or any person, who is in a position to satisfy the Bank by submitting his/her documents. Such documents are Passport/PAN Card/Voter’s Identity Card/Driving Licence and recent passport size Photograph/Employer’s ID Card (or satisfactory confirmation/letter from Employer)/Letter from a recognised public authority or public servant verifying the identity and residence of the customer to the satisfaction of the Bank/Photo Credit Card.

Address Proof Passport/Ration Card/Electricity or Telephone Bill would serve the proof of address. If Passport or any of the other documents listed above shows the current address also, no need to submit additional proof of address.


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Declaration re. Borrowing Facilities with Other Banks

Depositors enjoying any credit facilities with other Bank(s) must furnish full particulars of such facilities with the name(s) of the banks concerned. The Bank has every right to refer to the lending Banks concerned for Status reports/No Objection Certificate before opening such other bank borrowers’ CD accounts with the Bank.

Minimum Deposit For Opening the Account

As applicable from time to time.

Restrictions NIL (as to the number of deposits into and withdrawals from the account per day).

Joint Accounts of Individuals

Can be opened with operational instructions “Either or Survivor” or Former or Survivor” or “Any One/All of the Joint Account Holders”.

Other Accounts While the operational instructions can be in any manner (say either or survivor or former or survivor or any one Partner/Director/Trustee etc,), the same would be jointly authenticated in the account opening form in case of Partnership Firms and in case of Limited Companies or Trusts or Societies etc would be in accordance with the Board Resolution or the Trust Deed or the Bye Laws as the case may be.

Alterations in Operational Instructions

Are possible with the consent of ALL the joint account holders. Bank will not be bound to act on the instructions of one or some only of the joint account holders regarding such alteration.

Death of a sole depositor or last surviving Depositor

Balance in the account shall be paid to the legal representative of such sole depositor or the surviving or the last surviving depositor, as the case may be. Legal representative shall mean either the executor or the administrator who has obtained Probate or Letters of Administration or the holder of a grant of Succession Certificate or of any other proper grant of legal representation to the estate of such deceased depositor. In the case of the firms or companies etc fresh operational instructions may be given upon the death of any authorized signatory.

Deposits are made by means of

A Paying-in-slip, obtainable from the Branch. In addition to Cash and Currency notes, the Bank receives for collection and credit to customers’ accounts, bills, notes, cheques, Hundies, Interest and Dividend Warrants etc. However, separate pay-in-slips should be deposited for the different instruments listed above. In respect of cheques, separate pay-in-slips should be deposited for local and upcountry collections. So also, separate pay-in-slips should be deposited for cheques drawn on Bank branches. Customers are particularly requested to cross all cheques intended for collection before paying them into their accounts. Such deposits of cheques can be at any other CBS branch for credit to parent account at a CBS/MBB branch.


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Cheque Books Cheque book will be issued and the depositor is required to tick in the relevant box in the account opening form itself. The same will be issued upon the Bank’s discretion and subject to recovery of stipulated charges. Account holders are requested to examine carefully the cheque books issued to them and to verify that the number of forms in each cheque book issued is correct and that the running numbers of cheques are in serial order. Subsequent cheque books will be issued upon submission of the duly completed requisition slip in the last-used cheque book. Depositors should ensure safe custody of their cheque books and follow all the instructions contained in the cheque books themselves carefully.

Drawing of Cheques & Cheques Drawn to Order or for smaller amounts

Writing should be clear, distinct and legible. Cheques must be drawn on the printed forms provided by the Bank in such a way as to prevent alterations or addition after issue. The Bank reserves the right to itself to refuse payment of cheques drawn otherwise or to ‘Order’ or for smaller amounts. Cheques must not be post-dated. The amount of a cheque must be stated both in words and figures. The Bank will refuse payment of cheques on which the signature does not exactly correspond with that on record at the Bank.

Crossing of Cheques & Alterations therein

No alteration canceling the crossing of a cheque will be recognized unless the full signature of the drawer is appended to the alteration and the altered cheque is presented for payment by the drawer or his known agent. Otherwise the cheque will not be paid.

Stop payment Instructions

The Bank will register instructions from the drawer of a cheque to stop payment of it, but cannot undertake any responsibility in case such instructions are overlooked in the absence of any written confirmation or if the cheques had already been paid in the normal course. Acknowledgement would be given by Bank for such instructions.

Interest on Current Deposits

No interest will be allowed on balances on Current Accounts. However, Sweep-Out/Sweep-in facility is available under NJGB- CD Plus accounts.

Charges All Bank’s charges levied for different types of transactions/services are displayed in the Bank’s website www.njgb.in A charge may be made on all accounts where the average balance does not in the Bank’s view, compensate for the number of cheque forms and amount of stationery used and labour involved in keeping the account.

Minimum Balance Charges

Minimum balance as stipulated above should always be maintained. Otherwise, penalty would be levied for non-maintenance of the requisite minimum balance. The Bank reserves the right of closing any account after previous


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intimation if it is not operated upon satisfactorily, or if a minimum average credit balance is not maintained or for any other reason whatsoever.

Issuance of Cheques beyond available funds

Cheques must not be issued before the necessary funds have been credited to the relative account and clear balance is available. If cheques be presented when there are insufficient funds to meet them, payment will be refused and the cheques returned. Repeated disregard of these instructions will entail the summary closing of the account. Accounts must not be overdrawn without any prior arrangement/approval of the appropriate authorities.

Nomination Facility The nomination may be made in the account opening form itself in all personal accounts/sole proprietary accounts whereever such nomination is desired by the account holder(s).

Dormant/ Inoperative Accounts

Accounts which are not operated upon for more than one year would be automatically tagged as Inoperative/Dormant account and such accounts made inoperative/dormant can be reactivated only by the depositor himself operating on the account.

Cheques Payable only at the parent branch

Cheques drawn by the depositors would be payable only at the parent branch upon presentation. Should the depositor desire any payment at par facility, Multi-City Cheuqe books are made available by CBS branches for payments through other CBS branches, subject to stipulations.

Transfer of Funds From One Account to Another

No transfer of funds from one account to another would be allowed without the written authority of the account holder(s) from whose account funds are being transferred. Such authority letter should be signed in the same manner as the cheques on the account are signed. It is preferable to either give standing instructions for regular transfer of funds or to issue cheques for the purpose.

Deposit/ withdrawal of cash from other than parent CBS branch

Depositors can either deposit or withdraw cash from other CBS branches than the parent CBS branch (where the account is maintained). While there is no restriction on cash deposits, withdrawals are restricted to a maximum of Rs.50,000/= only. Such withdrawals would be allowed only to the depositor(s) and not to third parties. The authorised employee representative of the depositors –who interacts with the branch officials on a daily basis-would not be treated as third party.

Statement of Accounts

Account statements are made available periodically as per arrangement and through internet banking as well. The customers should verify the entries therein at regular intervals. No entry must be made in the pass book/statement, except by a Bank official. Any error or omission should immediately be brought to the notice of the Bank. The Bank will not be responsible for any loss arising from the neglect of this precaution. The entries can be made of individual cheques deposited or for the total of the cheques deposited in a pay-in-slip as per the customer’s option and this option should be intimated in advance to the Branch officials.


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Clear Balances It should be understood that although entries may have been made to the credit of an account and such entries initialled by an officer in the pass book/statement, should such credits be made up of cheques, which have to be collected, the amount they represent is not available for drawing until the proceeds have been released by the Bank.

Mandate/ Power of Attorney

The customer may authorise, for his convenience, an agent or nominee to operate on his account. Such an authority is given either by way of Mandate Letter or Power of Attorney. KYC Norms would be applicable to the Power of Attorney Holders also. By mandate letter the particular banker is informed that certain powers have been delegated whereas a power of attorney acts as a general notice and authority. A power of attorney may be special or general. A special power of attorney authorises a person to act in a single transaction whilst authority to act in more than one transaction such as a bank account or generally, is a general power of attorney. The power of attorney is a stamped document. A power to operate an account will not include, by itself, a power to overdraw or borrow money. Authority or power to borrow by the attorney should definitely/explicitly be stated/embodied in the instrument.

Revocation of Power of Attorney/ Mandate Letter

The authority granted to an attorney to operate on the account is revoked EITHER by specific instructions by the account holder(s) which should be in writing, OR (a) where the donor (or mandator), or one of the donors (or mandators) is deceased becomes insane, insolvent or bankrupt; (b) where there is more than one attorney with power to all of them to act JOINTLY the power is revoked on the demise of one of them. A notice of cancellation by one of the donors (or mandators) will also have the effect of withdrawal of authority.

General The Bank reserves its rights to:

Delete, alter or add to these Rules at any time, and the amended rules shall be displayed on the Bank’s website from time to time and also in the branches’ notice boards which shall be binding on the customers.

Opening of any account will be at the Bank’s sole discretion.

Close any account after giving at least 15 days’ written notice, and without assigning any reason whatever, if in its sole discretion, the dealings are not satisfactory. In such cases, the customers concerned should surrender their unused cheque leaves to the Branch concerned forthwith.

CHAPTER-5 CURRENT ACCOUNTS

Documents

Transcript of CHAPTER-5 CURRENT ACCOUNTS