3. acs & clients

8/7/2019 3. ACs & Clients

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Yad bhavam tat bhavati

We become what we think


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Banking -definition

Banking Regulation Act 1949 sec 5 defines Bankingas

accepting , forthe purpose oflendingorinvestment, of

deposits ofmoney fromthe public, repayable on demand

orotherwise, and withdrawable by cheque, draftororderorotherwise.


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Categories ofBanks

1. Nationalised Banks

2. Old private banks

3. Newgeneration Private Banks

4. ForeignBanks

5. Regional RuralBanks

6. Co-operative banks


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Types of Deposit Accounts

a) Demand deposits

a) Time Deposits


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Demand Deposits

1. Savings Bank deposits/ No frills account

2. Current Account Deposits/Flexi deposits

3. Call deposits

4. Margins held againstletterof credit/guarantees


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Time Deposits

1. Fixed deposits

2. Reinvestment plan deposits

3. Shortterm deposits

4.Seniorcitizens deposits

5. Overdue deposits

6. Recurring deposits


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Classificationof customers

1) Individuals_

Single

Joint(twoormore severally or jointly, A &BorA,B & C)

Minors

Illiterates

Blind persons


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Married Women

Pardanashin Woman

Lunatics

Insolvent Persons

Insane Person

Intoxicated Person


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2) Executors and administrators

3)Liquidators and receivers

4) Sole proprietory concerns

5) Joint Hindu families ( HUF )(as perHindu succession

act 1956 )

6) Partnership firms (Indian partnership act 1932 )


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7)Limited companies, Pvtlimited cos /Public limited cos (

companies act 1956 )

8)Trusts

9)non-corporate bodies like clubs, committees, associations etc

10) Schools and colleges

11) Societies

12) Govt/ semigovtbodies


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Operationof jointaccounts

a) Jointoperation

b) Jointorsurvivor

c) Eitherorsurvivor

d) Formerorsurvivor

e) Anyone orsurvivors orsurvivor

f) Powerofattorney ormandate holders


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Facility ofnomination

As perThe Bankinglaws( Amendment) Act, 1983section 45ZA, inthe Bankingregulation Act, 1949,nomination facility is accorded to depositors ofbanks.

A single depositoror joint depositors may nominate apersontowhom, inthe eventofthe deathofthedepositor, the depositamountmay be paid by thebanking company.

A nomination canbe made in favourofindividuals onlyand notassociations, societies, trusts etc.

The nominee does notbecome the absolute ownerofthe amountreceived by him. The lawof successionwillstill prevail.


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If you always do what youve always done,

You will always be where youve always

been.


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Exercise

1. Mr and Mrs Mathew are having joint account with Yes Bank,

Chennai. Mode of operation F or S. Mrs Mathew forges Mr

Mathews signature and encashes Rs 50,000/-. Mr Mathew

was well aware of this forgery and deliberately kept quiet.

After Mrs Mathew deserts him, he complains to the Bank that

there was a forgery done on his account by his wife and claims

the amount from the Bank.

Examine the validity of Mr Mathews Claim on Yes Bank.


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Exercise

2.Gupta, Patil and Roy are maintaining a joint Current account

with SBI, Pune. Gupta and Roy are authorised to operate the

account. They issues a cheque for Rs 100,000.00 in favour of a

charitable trust. Patil issues a letter to the Bank to stop

payment of the cheque.

Discuss whether the bank can comply with the request of patil.


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Exercise

3. Gupta, Patil and Roy are maintaining a joint Current account

with SBI, Pune. Gupta and Roy are authorised to operate the

account. They issues a cheque for Rs 75000.00 in favour of

Income Tax Department on 2nd of Dec 2008. The instrument

has come to the bank for payment at 12.30 pm on 5/12/08, but

the bank receives information that Gupta passed away on that

day at 5 am.

Examine the situation and conclude the action to be taken by

the bank.


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Exercise

4. Mr and Mrs Gandhi are having a joint SB account , operated

with the mandate of E or S with Bank of India, Mumbai. Mr

Gandhi issues a cheque for Rs 50000.00 , favouring Franklin

Mutual Fund. BOI informs Mrs Gandhi that since there is an

alteration in the payees name, they are unable to pass the

same without the authentication of the account holder.

Mrs Gandhi informs that she will be authenticating the same

since MrGandhi has gone abroad on business tour. Discuss

the bankers course of action.


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Exercise

A,B,C are joint account holders in a current account with abank. C is authorised to operate the account. C, in turn,authorises D to operate the account, since he is going abroadfor further studies.

In the above example, a cheque for Rs 50,000.00 is issued byC. B issues a letter to the bank to stop payment of the cheque.

The amount in figures is written wrongly as Rs 5000.00.As Cis abroad, A&B are prepared to correct and authenticate.


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Exercise

In a joint account, A and B are account holders, with E or Smandate. The balance is Rs 50 lacs. A dies suddenly and theson of A claims 50% of the amount.

In the above case, C forges As signature cleverly andencashes Rs 5 lacs. A claims the amount from the bank. Bankargues that the forgery was difficult to identify.

A issues a cheque for Rs 25000.00 to D or bearer. D endorsesthe cheque to E, with remark pay only to E. Cheque ispresented for payment by F.


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Exercise

A minor approaches his Bank, along with another minor to

open a savings bank account, jointly. Their ages are 14 and 12,

respectively. What should the Bank manager do?

As per Indian Contract Act, 1872, a contract entered with a

minor is void.


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Exercise

A married woman opens a SB account with Cosmos bank,

Pune. An inadvertant overdraft is allowed in the account.The

lady argues that the amount was withdrawn to meet the

household expenses and hence should be recovered from the

husband, since she is a homemaker only. Discuss the remedy

available to the banker.

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