Individuals under VARIOUS TYPES OF CUSTOMERS :
Accounts of individuals form a major chunk of the deposit accounts in the personal segment of most banks. Individuals who are major and of sound mind can open a bank account.
(a) Minors:
In case of minor, a banker would open a joint account with the natural guardian. However to encourage the habit of savings, banks open minor accounts in the name of a minor and allows single operations by the minor himself/ herself. Such accounts are opened subject to certain conditions like (i) the minor should be of some minimum age say 12 or 13 years or above (ii) should be literate (iii) No overdraft is allowed in such accounts (iv) Two minors cannot open a joint account. (v) The father is the natural guardian for opening a minor account, but RBI has authorized mother also to sign as a guardian (except in case of Muslim minors)
(b) Joint Account Holders:
A joint account is an account by two or more persons. At the time of opening the account all the persons should sign the account opening documents. Operating instructions may vary, depending upon the total number of account holders. In case of two persons it may be (i) jointly by both account holders (ii) either or survivor (iii) former or survivor In case no specific instructions is given, then the operations will be by all the account holders jointly, The instructions for operations in the account would come to an end in cases of insanity, insolvency, death of any of the joint holders and operations in the account will be stopped.
(c) Illiterate Persons
Illiterate persons who cannot sign are allowed to open only a savings account (without cheque facility) or fixed deposit account. They are generally not permitted to open a current account. The following additional requirements need to be met while opening accounts for such persons:
– The depositor’s thumb impression (in lieu of signature) is obtained on the account opening form in the presence of preferably two persons who are known to the bank and who have to certify that they know the depositor.
– The depositor’s photograph is affixed to the ledger account and also to the savings passbook for identification.
Withdrawals can be made from the account when the passbook is furnished, the thumb impression is verified and a proper identification of the account holder is obtained
Hindu Undivided Family (HUF)
HUF is a unique entity recognized under the Hindu customary law as comprising of a ‘Karta’ (senior-most male member of the joint family), his sons and grandsons or even great grandsons in a lineal descending order, who are ‘coparceners’ (who have an undivided share in the estate of the HUF). The right to manage the HUF and its business vests only in the Karta and he acts on behalf of all the coparceners such that his actions are binding on each of them to the extent of their shares in the HUF property. The Karta and other coparceners may possess selfacquired properties other than the HUF property but these cannot be clubbed together for the HUF dues.
HUF business is quite distinct from partnership business which is governed by Indian Partnership Act, 1932. In partnership, all partners are individually and collectively liable to outsiders for the dues of the partnership and all their individual assets, apart from the assets of the partnership, would be liable for attachment for partnership dues. Contrarily, in HUF business, the individual properties of the coparceners are spared from attachment for HUF dues.
The following special requirements are to be fulfilled by the banks for opening and conducting HUF accounts:
– The account is opened in the name of the Karta or in the name of the HUF business.
– A declaration signed by Karta and all coparceners, affirms the composition of the HUF, its Karta and names and relationship of all the coparceners, including minor sons and their date of birth.
– The account is operated only by the Karta or the authorized coparceners.
– In determining the security of the family property for purposes of borrowing, the self-acquired properties of the coparceners are excluded.
– On the death of a coparcener, his share may be handed over to his wife, daughters and other female relatives as per the Hindu Succession Act, 1956.
The Hindu Succession Act, 1956 has been amended in 2005. The Amendment Act confers equal rights to daughters in the Mitakshara Coparcenary property . With this amendment the female coparcener can also act as Karta of the HUF. When any HUF property is to be mortgaged to the Bank as a security of loan, all the major coparceners (including female coparceners) will have to execute the documents