Special types of Bank’s Customers-Minor or Infant, Lunatics, Drunkard or Intoxicated Person, Married Woman, Illiterate Person, Trustees, Executors and Administrators.
Every person who is competent to contract can open an account with a bank provided the bank is satisfied regarding his bonafides and is willing to enter into necessary business relations with him. But there are certain types of persons e.g. Minor or Infant, Lunatics, Drunkard or Intoxicated Person, etc. whose capacity to enter into valid contracts is subject to certain legal restrictions.
Accounts of Minor
As per The Contract Act a minor is not capable to enter into any contract. So minor is not allowed to open a bank account by himself.
As per The Guardian and Wards Act (Act. VIII of 1980) there are three types of guardian who can open bank account in the name of minor viz Natural Guardian, Testamentary Guardian and Guardian appointed by the Court.
Natural Guardian
Father or Mother or husband of a married minor girl
Testamentary Guardian
Those guardians who are appointed by the natural guardian (father or mother) who will act as guardian after the death of the Natural Guardian.
Guardian appointed by the Court.
If the natural guardian is not alive or is not fit for becoming guardian for insanity, changing the religion, etc.
A Bank account (preferably Mudaraba Savings A/C) can be opened and operated by the Guardian in the name of minor till becoming the maturity of the minor (upto 18 or 21 years age) in the following form:
For XYZ (Minor)
ABC (Guardian)
Also the guardian may continue operation after majority of th minor subject to getting written consent of the major in this respect (preferably submitting written request to the Bank)
Banker’s precaution:
Recording the date of birth’ and date majority of the minor in the AOF, SS Card and in the ledger/computer.
1. Recording the date of death of the guarding of the minor. The date of death to the informed to the Bank. The close relation of the minor will introduce him to the bank.
2. No overdraft can be allowed in this account.
3. Who opens the account in favor of minor will introduce him/her to the bank after his majority.
Lunatics, Drunkard or Intoxicated Person
All contracts made by lunatics are void except those made during lucid intervals. A customer may become a lunatic after opening his account with the bank. In such a case the bank will not be responsible if it honours a cheque or bill duly drawn accepted or endorsed by the lunatic unless it is proved that it knew of his lunacy at the time of honoring or discounting. The bank should, therefore, suspend all operations on the account of a person who to its knowledge has become lunatic till it receives a proof of his sanity or gets an order of the court to that effect. A
banker should treat a customer as sane till there is fairly conclusive evidence in support of his insanity.
The banker should take the following steps on receiving notice of customer’s insanity.
1. It should return all cheques on customer’s account with the words refer to drawer and not ‘customer insane’.
2. It should make a careful note of the lunacy order as and when received from the court.
3. It should allow the operation of the account only as per the lunacy order.
4. It should not allow the customer to operate the account till he is certified by the court to be same.
ACCOUNTS OF ILLITERATE PERSON
An illiterate person may open an account with a bank. The banker should take the following steps:
1)Thumb impression: The left hand for man and right hand for woman thumb impression of the depositor should be obtained on he account opening form and the specimen signature sheet in the presence of an authorized supervising official.
2) Identification mark: Where possible, brief details of one or two identification marks of the depositor should be noted on the account opening form and the specimen signature sheet under authentication of an authorized officials.
3)Photograph: Two copies of passport size of the depositor should be obtained and
got renewed every three years.
4) General Implication and condition s for operation of the account should explained to the depositor by an authorized official. .Withdrawals the account should generally be allowed only when the person comes personally and produces his or her passbook I balance confirmation certificate and put thumb impression on the cheque in the presence of bank officials.
TRUSTEES
A trustee is a person in whom confidence is repose. He is given control of an estate, usually of the deceased, for the benefit of certain person. The person reposing the trust is called trustees. The person for whose benefit the trust is created is called beneficiary. The document creating the trust is called the ‘trust deed’
A banker should take the following precautions while having business dealings with the trustees:
(i) The banker should thoroughly study the trust deed. The trust contains the
names of the trustee, their powers, the details of the trust property and other terms.
(ii) In case of several trustees, all trustees must act jointly unless the trust deed
provides for delegation of powers to some of the trustees.
(iii) In case an account is opened for two or more trustees, the bank should obtain
clear instructions as regards the person or persons who shall sign the cheques or other instruments. In the absence of such instructions all trustees must sign on each occasion.
(iv) In the case of death or retirement of one or more of the trustees, the powers of
surviving or remaining trustees will depend on the provisions of the trust deed.
(v) In the event of retirement of all the trustees, the new trustees may be
appointed by the court.
(vi) The insolvency of one or more trustees does not in any way affect trust property since if cannot be utilized for payment of the personal debt of the trustee.
(vii) The banker should not knowingly permit the misuse of trust funds, otherwise it can be held liable to the beneficiaries of the trust. For example, in a case, where the banker who had knowledge of the trust character of an account allowed the customer to transfer funds standing to the credit of the trust account to his personal account which was overdrawn, it was held that the banker was liable to pay the money to the account to which it really belonged.
(viii) In case of charitable trust, the banker should examine the registration certificate issued by the charity commissioner or such other authority as may be prescribed by the state Government concerned under the Public Trust Act.
Individual Retirement Account (IRA)
Constituents’ Accounts
Steps to open a Bank Account
DPS Of All BD Bank
Special types of Bank’s Customers-Minor or Infant, Lunatics, Drunkard or Intoxicated Person, Married Woman, Illiterate Person, Trustees, Executors and Administrators
Special types of Bank’s Customers-Minor or Infant, Lunatics, Drunkard or Intoxicated Person, Married Woman, Illiterate Person, Trustees, Executors and Administrators