Guidelines for opening accounts

GUIDELINES FOR OPENING ACCOUNT:-

A bank should be very careful in entertaining a new customer. it will be taking a great risk if it opens an account of a customer without knowing the whereabouts of the latter. The opening of an account involves the honouring of cheques on the part of the bank so long as customer's account has credit balance.Hence, it is essential that the bank should make thorough enquiry regarding the customer before opening an account with him.

APPLICATION FORM:-

  The prospective customer is first of all asked to sign an application form prescribed for that purpose after furnishing all particulars. application form contain the rules and regulations of the bank along-with the terms and conditions of the deposit.

SPECIMEN SIGNATURE:-

Every new customer is expected to give three or more specimen signatures. each bank maintains a signature book for this purpose.

LETTER OF INTRODUCTION:-

It is always advisable on the part of the banker to allow the prospective customer to open an account only with a proper introduction.

1.  Protection against fraud
2. Protection against inadvertent overdraft
3. Protection against an undercharged bankrupt

INTERVIEW:-

At the time of opening of new account, it is always advisable to have an interview invariably with the prospective customers so as to obviate the chances of perpetration of any fraud at a later stage.

ACCOUNT IN CASH:-

It is a common practice among bankers to allow a new party to open an account only in cash.

FOR EXAMPLE:- if customer's tittle to the cheque is defective, the banker is answerable for it.

MANDATE IN WRITING:-

If a new party wants its account to be operated by somebody else, the banker should demand a mandate from his customer in writing. The mandate contains the agreement between the two regarding the operation of the account, the specimen signatures of the authorized person and powers delegated to the authorized person.

VERIFICATION OF DOCUMENTS:-

If the new party happens to be a corporate body, it is essentail that the banker shoulld verify some of the important documents like memrandum of association, articles of associations, bye-law copy etc, etc.

CONVERSANT WITH THE PROVISIONS OF SPECIAL ACTS:-

Since a banker has to deal with different classes of customers, he has to be thoroughly conversant with certain laws like Indian companies Act, Indian partnership Act, insolvency Act, the various trust acts, the cooperative societies act etc.

PASSPORT SIZE PHOTOGRAPH:-

Their is need a passport size photographs on the application forms at the time of opening accounts.