Special types of Bank’s Customers-Minor or Infant, Lunatics, Drunkard or Intoxicated Person, Married Woman, Illiterate Person, Trustees, Executors, and Administrators.

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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 the 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 sane.

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   opeing 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 conditions  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 / 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 the 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:

  • 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.
  • In case of several trustees, all trustees must act jointly unless the trust deed provides for delegation of powers to some of the trustees.
  • 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.
  • 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.
  • In the event of retirement of all the trustees, the new trustees may be appointed by the court.
  • 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.
  • 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.

In case of the 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.
 
EXECUTORS AND ADMINISTRATORS
Executors and Administrators, both are persons appointed to settle the accounts of a person after his death. Executor is appointed by the deceased himself, before his death. The person appointing him is called ‘testator’’ The executor has to act according to the directions given in the will. However, he must get the official confirmation of the will technically called as probate, from the court.
The ‘Administrator’ is appointed by Court in those cases where the deceased has not given the name Executor in his will or person named as executor has died or refuses to act. He disposes of the assets and makes payment of the liabilities of the deceased as per the directions given in the will or in its absence in the letter of Administration issued by the Court appointing him as Administrator.
The Banker should observe the following precautions while dealing with Executors or  Administrators.
1.The bank should examine the Letter of Probate’ (i.e. official confirmation of the will ) in case of Executors and Letter of Administration in case of Administrators to acquaint itself with be powers and functions of the executors or the administrators.

  1. An account in the following style may be opened in the name of executors or administrators.

ABC executors (or administrators) of the estate of X, the deceased’’

  1. In case of joint executors or administrators, the banker should get clear instructions, from then regarding the executors, administrators who will operate the account.
  2. The executors may borrow money for discharging some urgent obligations of the deceased. The executors or administrators are personally liable for such loans unless the banker has given loan on the specific asset of the deceased. In case of joint executors or administrators the power to mortgage or pledge is available to all of them jointly. Moreover, they cannot exercise such power if the probate or letter of administration specifically forbids it.

 
ACCOUNTS OF ILLITERATE PERSON
01An 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   opeing 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 / balance confirmation  certificate   and  put  thumb  impression    on  the  cheque   in  the  presence  of   bank  officials.