Who can open Savings Bank (SB) Account in Banks ?

Savings Bank (SB) accounts are opened in the bank mainly for saving purposes. Customers cannot open an SB account for business purposes.   Let us find out who is eligible and who is not eligible to open SB accounts.

The following entities are eligible to open SB accounts in a bank:-

 (i)   SB Accounts may be opened in the name of Individuals (Resident or Non-Non-Resident)

(ii) Associations, Societies, educational institutions, and Hindu Undivided Family (HUF) and Trusts, so long as the account not used for trading purposes. [Government of India Notification dated November 12, 2009- Rule 2 sub-rule (1) clause (ca) defines a Non-Profit Organization (NPO). NPO means any entity or organization that is registered as a trust or a society under the Societies Registration Act, 1860, or any similar State legislation or a company registered under section 25 of the Companies Act, 1956.(RBI circular/2011- 12/72 DBOD. AML. BC. No. 2 /14 .01.001/2011-12 July 1, 2011)]

(iii)  Primary co-op society which is being financed by the bank.

(iv)   Khadi & Village Industries Board.

(v)   Agriculture Produce Marketing Committee.

(vi)  Societies registered under the Societies Registration Act.

(vii) Companies registered under the Companies Act which have been licensed by the Central Government under the corresponding provision of section 25 Companies Act 1913 and without permission to add the word “Limited” or “Pvt. Limited” to their names.

(viii) Government Departments/bodies/agencies in respect of grants/subsidies released for implementation of various programmes /schemes.

(ix)         Institution other than mentioned above and whose entire income is exempt from payment of Income Tax under IT Act.1961

(x)          Development of women and children in the rural area (DWCRA).

(xi)         Self Help Group. (SHG) registered or unregistered

(xii) Farmers Club- Vikas Volunteer Vahini (VVV)

(xiii)      Any other institution permitted by RBI from time to time

 The following entities are not eligible to open an SB account in a bank:-

1. Any trading or business concern.
2.  Government departments/bodies depend upon budgetary allocation for the performance of their functions.
3. Panchayat Samitis/ Municipal Corporation/Committees
4. State Housing Boards
5. Industrial Development Authorities
6. State Electricity Boards
7. Water/Sewerage/Drainage Boards
8. State Text Book publishing corporations/Societies
9. Metropolitan Development Authorities
10. State/District level co-operative Societies
11. Other banks including Regional Rural Banks, Co-operative Banks, and Land Development Banks
12. Political Parties