Opening accounts of various types of customers and Operational aspects of Bank accounts

Banks are opening various types of customer accounts. These customer accounts may be individual’s sole accounts, joint accounts, partnership accounts, club accounts, accounts of associations, companies, Government departments, etc. While opening and maintaining accounts for different types of customers, a bank has to comply with the law application to each of them.

For opening any type of bank account photographs of account holders are mandatory in banks with some exceptions. The following are important types of accounts held in banks

Savings Bank accounts:

Savings Bank (SB) accounts are opened mainly for saving purposes. Customers cannot open an SB account for business purposes.   Though the interest rates may not be high, savings accounts provide a modest return on your deposits, contributing to your savings growth over time. The customers enjoy cheque book facilities, debit card facilities, UPI, NEFT, and RTGS facilities for operating the account and doing different transactions through their Accounts.

To know the details of who is eligible and who is not eligible to open SB accounts, Read the following post “Who can open Savings Bank (SB) Account in Banks?”

Joint Accounts:

A joint account of multiple persons can be opened in a bank with the mandates like “Account operated jointly by all the depositors”; Account operated by “either or survivor”; Joint or Survivor; Former or survivor; Later or survivor; Account operated by “anyone or survivors”; Account operated by (a) “Both or survivor” (b) “All or survivor/s”, To know the details read: “Meaning of different operation mandates”

Normally, Banks do not allow the opening of joint accounts of two illiterate persons or illiterate along with a literate person. However, at the discretion of the bank, they may allow the opening of accounts of closely related people like illiterate husband and wife under the condition that the account should be operated jointly. To know more read: Joint accounts of illiterate and visually impaired people

Non-resident Indians and Persons of Indian Origins (PIO) are permitted to maintain various types of bank accounts in India viz. SB NRE/NRO/FCNR (B) etc. To know the details of permitted accounts in India for NRIs and PIOs read “Permitted Accounts”

Current Accounts:

A Current account in a bank is a running account (also known as a demand deposit) maintained in banks mostly for business. When a new current account is to be opened, banks insist on a ‘declaration’ from the opener of the account, to the effect that the account holder does not enjoy credit facility with any other bank. If the account opener enjoys credit facilities from other bank/s, they must produce a ‘No-Objection Certificate’ from their lending bank(s). All banks are bound to follow the above discipline. RBI would make the concerned bank liable for penalty under the Banking Regulation Act 1949,

 The following types of entities are eligible to open current accounts in banks.

1. Individual/Proprietorship Account
2. Hindu Undivided Family (H.U.F) Account
3. Partnership concerns/Limited Liability Partnership (LLP)
4. Limited and Private Companies
5. Trust Account
6. Clubs, Societies (including co-operatives), Associations, Educational institutions
7. Government/Semi-Government departments
8. Hospitals/Nursing homes/pathological laboratories
9. Administrators/Executors
10. Liquidator 

Deposit accounts:

A deposit generally refers to money held in a customer’s bank account. Banks offer different types of deposit accounts to their customers with diverse features. Let us understand the types of accounts available to Bank customers. To know different deposit products and services available in banks read: “Deposits”

Loans and Advances:

In general terms, loans and advances are synonyms for fund-based credit facilities. However, they are differentiated by the banks as loans and advances based on the purpose of a facility, tenure and repayment system, and nature of prime security available to the credit facility, etc”.  To know more read “What is the difference between loans and advances”

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