Page 61 - DMGT303_BANKING_AND_INSURANCE

Banking and Insurance

Notes official opening the account, to explain the procedural formalities and provide necessary
clarifications sought by the prospective depositor when he approaches for opening a
deposit account.
Savings Bank Accounts can be opened for eligible person/persons and certain
organizations/agencies (as advised by Reserve Bank of India (RBI) from time to time).

Current Accounts can be opened by individuals/partnership firms/Private and Public
Limited Companies/HUFs/Specified Associates/Societies/Trusts, etc.
Term Deposits Accounts can be opened by individuals/partnership firms/Private and
Public Limited Companies/HUFs/Specified Associates/Societies/Trusts, etc.
The due diligence process, while opening a deposit account will involve satisfying about
the identity of the person, verification of address, satisfying about his occupation and
source of income. Obtaining introduction of the prospective depositor from a person
acceptable to the bank and obtaining recent photograph of the persons opening/operating
the account are part of due diligence process.
In addition to the due diligence requirements, under KYC norms the bank is required by
law to obtain Permanent Account Number (PAN) or General Index Register (GIR) Number
or alternatively declaration in Form No. 60 or 61 as specified under the Income Tax Act/
Rules.
Deposit accounts can be opened by an individual in his own name (status: known as
account in single name) or by more than one individual in their own names (status:
known as Joint Account). Savings Bank Account can also be opened by a minor jointly
with natural guardian or with mother as the guardian (Status: known as Minor’s Account).
Minors above the age of 10 will also be allowed to open and operate saving bank account
independently.

Operation of Joint Account: The Joint Account opened by more than one individual can
be operated by single individual or by more than one individual jointly. The mandate for
operating the account can be modified with the consent of all account holders. The Savings
Bank Account opened by minor jointly with natural guardian/guardian can be operated
by natural guardian only.

At the request of the depositor, the bank will register mandate/power of attorney given
by him authorizing another person to operate the account on his behalf.

The term deposit account holders at the time of placing their deposits can give instructions
with regard to closure of deposit account or renewal of deposit for further period on the
date of maturity. In absence of such mandate, the Bank will seek instructions from the
depositor/s as to the disposal of the deposit by sending an intimation before 15 days of the
maturity date of term deposit.

Nomination facility is available on all deposit accounts opened by the individuals.
Nomination is also available to a sole proprietary concern account. Nomination can be
made in favour of one individual only. Nomination so made can be cancelled or changed
by the account holder/s any time. While making nomination, cancellation or change.

Thereof, it is required to be witnessed by a third party. Nomination can be modified by
the consent of account holder/s. Nomination can be made in favour of a minor also.
The bank has statutory obligation to deduct tax at source if the total interest paid/payable
on all term deposits held by a person exceeds the amount specified under the Income Tax
Act. The bank will issue a tax deduction certificate (TDS Certificate) for the amount of tax
deducted. The depositor, if entitled to exemption from TDS can submit declaration in the
prescribed format at the beginning of every financial year.

56 LOVELY PROFESSIONAL UNIVERSITY