1. What precaution should be taken by a bank while opening an account in the name of a minor? (2015/2018) (5marks)
-> The precautionary measures are:-
- Nature of Account- The banker may open a savings bank account in the name of a minor. The banker should not open a current account in the name of a minor because in case of an overdraft the minor cannot be held personally liable. The savings account may be opened in any of the following ways:-i) In the name of the minor himself.
ii) In the joint names of the minor and his/her guardian.
iii) In the name of the guardian to be operated by the guardian.
- Age of opening account- The banker should allow the minor to open a savings bank account in his own name only if he/she has an age between 10-14 years and could be able to read and write English, Hindi or any other language.
- Recording date of birth of minor- Before opening the account the banker must record the date of birth of the minor as disclosed by his/her guardian.
- Death of the minor- The banker must take special care at the time of death of the minor or his guardian. In case, if the minor dies, then the balance in the account should be paid to his guardian.
- Death of the guardian- In the event of death of the guardian before the minor attains the majority and the account is a joint account or to be operated by the guardian only, the deposit money should be paid by the banker to the minor on attaining majority or to some person attained by the court as his/her guardian.
- Advance to a minor on the guarantee of a third party- The banker should not grant loan to a minor on the guarantee of a third party.
2. What precaution should be taken by a banker while opening an account in the name of a married woman? (2016) (5marks)
-> India is a democratic country. Every person, either male or female, is equal in the eyes of law. The law does not make any kind of distinction among a male and a female. So a married woman can open an account in bank. According to the Indian Contracts Act, 1872, a married woman can enter into contracts, acquire and sell property and land or borrow money. But a banker should be very conscious which is opening an account in the name of a married woman:
a. While opening an account with a married woman, the bank should obtain all necessary information such as the name of her husband, address, phone number, occupation, personal property, etc.
b. While granting a loan to the married woman, the banker must examine the personal property of a married woman. The banker must verify that the married woman should have her own separate personal property apart from the husband which must be sufficient to cover the amount of the loan.
c. In case, the wife has taken a loan on the basis of her property then the banker should make the debts liable to herself only. Her husband will not be held liable for any debt of her wife even though he has sufficient property to pay the debts.
d. When a married woman desires to open a joint account with her husband, the banker should clarify that in the ev
ent death of any one of them, then who will be entitled to receive the amount.
3. Describe the procedure of opening a bank account in the name of a minor. (2017/2019) (8marks)
-> A person who has attained or completed the age of 18 years is known as Minor. A Minor is not capable of entering into a valid contract and a contract entered into by a minor is void. The bank can open a savings, fixed or recurring deposit account in the name of minor.
Following are the main steps in opening a bank account:-
1. Age of opening account- The banker should allow the minor to open a savings bank account in his own name only if he/she has an age between 10-14 years and could be able to read and write English, Hindi or any other language.
2. Selection of type of account- The first step is to select the type of account to be opened. An account may have several types such as current, saving fixed account. An account can be opened jointly or singly. The banker may open a savings bank account in the name of a minor. The banker should not open a current account in the name of a minor.
3. Selection of bank and branch- The prospective account holder should now select the bank.
4. Obtaining the account opening form- An account opening form is obtained from the bank. It should be read carefully and filled in with utmost care.
5. Obtaining the reference- One or two references are obtained by the prospective account holder. The people who give references sign the form and give their account no. and name and address.
6. Submission of the form- Now the form should be submitted along with the required documents. These documents vary from account to account.
7. Giving specimen signature- Now, the account holder signs on a card called specimen signature card. These signatures are matched with the cheques of the account holder.
8. Making initial deposit- The applicant is allocated an account and asked to make an initial deposit in his account through a deposit slip.
9. Account is opened- As soon as the initial deposit is made, the account is opened.
10. Receiving of cheque book/term deposit certificate- Finally, a cheque book is issued which bears the applicant’s account no. The money can be withdrawn with the help of these cheques.
4. What types of complaints are to be looked at by the Banking Ombudsman relating to banking services? (2019) (5marks)
-> The Banking Ombudsman Scheme has been set up with the intention of providing a fast, easy and economic solution to the grievances of the public against banks. Ombudsman in a bank is a person appointed to receive, investigate and report on complaints by customers against banking officials.
Types of complaints which can be filed with banking ombudsman:-
a) Non-payment or unreasonable delay in banking ombudsman.
b) Non-adherence to prescribed working hours.
c) Refusal to open a savings deposit account without any valid reason.
d) Refusal to accept or delay in accepting payment.
e) Refusal to close or delay inclosing accounts.