Page 62 - DMGT303_BANKING_AND_INSURANCE

Unit 3: Concept of Retail Banking

Minors’ Accounts: The minor can open Savings Bank Account and the same can be operated Notes
by the natural guardian or by minor himself/herself, if he/she is above the age of 10
years. The account can also be opened jointly.
On attaining majority, the erstwhile minor should confirm the balance in his/her account
and if the account is operated by the natural guardian/guardian, fresh specimen signature
of erstwhile minor duly verified by the natural guardian would be obtained and kept on
record for all operational purposes.

Account of Illiterate/Blind Person: The bank may at its discretion open deposit accounts
other than Current Accounts of illiterate person. The account of such person may be
opened provided he/she calls on the bank personally along with a witness who is known
to both the depositor and the bank. Normally, no cheque book facility is provided for such
Savings Bank Account. At the time of withdrawal/repayment of deposit amount and/or
interest, the account holder should affix his/her thumb impression or mark in the presence
of the authorized officer who should verify the identity of the person. The bank will
explain the need for proper care and safekeeping of the passbook etc. given to the account
holder. The bank official shall explain the terms and conditions governing the account to
the illiterate/blind person.

Secrecy of Customer’s Accounts: The bank shall not disclose details/particulars of the
customer’s account to a third person or party without the expressed or implied consent
from the customer. However, there are some exceptions, viz. disclosure of information
under compulsion of law, where there is a duty to public to disclose and where interest of
the bank requires disclosure.

Premature Withdrawal of Term Deposit: The bank on request from the depositor, at its
discretion may allow withdrawal of term deposit before completion of the period of the
deposit agreed upon at the time of placing the deposit. The bank shall declare their penal
interest rates policy for premature withdrawal of term deposit. The bank shall make
depositors aware of the applicable rate along with the deposit rate.
Premature Renewal of Term Deposit: In case the depositor desires to renew the deposit by
seeking premature closure of an existing term deposit account, the bank will permit the
renewal at the applicable rate on the date of renewal, provided the deposit is renewed for
a period longer than the balance period of the original deposit. While prematurely closing
a deposit for the purpose of renewal, interest on the deposit for the period it has remained
with the bank will be paid at the rate applicable to the period for which the deposit
remained with the bank and not at the contracted rate.
Renewal of Overdue Term Deposits: When a term deposit is renewed on maturity, on
renewed deposit interest rate for the period specified by the depositor as applicable on the
date of maturity would be applied. If request for renewal is received after the date of
maturity, such overdue deposits will be renewed with effect from the date of maturity at
interest rate applicable as on the due date, provided such request is received within 14
days from the date of maturity. In respect of overdue deposits renewed after 14 days from
the date of maturity, interest for the overdue period will be paid at the rates decided by the
bank from time to time.
Advances Against Deposits: The bank may consider request of the depositor/s for loan/
overdraft facility against term deposits duly discharged by the depositor/s on execution
of necessary security documents. The bank may also consider loan against deposit standing
in the name of minor, however, a suitable declaration stating that loan is for the benefit of
the minor, is to be furnished by the depositor-applicant.

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