Savings Bank (SB) accounts are opened in the bank mainly for saving purpose. Customers cannot open an SB account for business purpose. 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 purpose. [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 companies act which have been licensed by 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:-
- Any trading or business concern.
- Government department/bodies depending upon budgetary allocation for the performance of their functions.
- Panchayat Samitis/ Municipal Corporation/Committees
- State Housing Boards
- Industrial Development Authorities
- State Electricity Boards
- Water/Sewerage/Drainage Boards
- State Text Book publishing corporations/Societies
- Metropolitan Development Authorities
- State/District level co-operative Societies
- Other banks including Regional Rural Banks, Co-operative Banks, and Land Development Banks
- Political Parties
Thanks sir. Explained in a very nice way.
Kindly share the RBI circular details for opening savings bank account in the name of association..SBI is restricting in opening SB for association.
Please go through RBI circular linked below
Good knowledge for banking
what one should do in order to open a savings account in the name of a coaching centre?please inform……
Bank will not accept your request for SB account as Coaching Center/class is a commercial activity. You have to open SB account in your individual name or open a Current account in the name of coaching class.
Can BSNL open an SB account for daily remittance of their collection, as the money is sweeper kutto a CA everyday evening, and
BSNL, though a Government undertaking, is a commercial entity, SB account cannot be opened in their name.If they want earn interest on short term balance in their account, you may suggest them to open a current account and give standing instruction to the bank to transfer accumulated balance to shortest term deposits, alwaysleaving minimum balance of say Rs.10 lakhs in the account. They may also give an instruction to the branch to close the short term deposit before maturity if any cheque for large amount to be cleared.