1.
Opening of Deposit Accounts
Introduction
Who Can Open Account
Introduction to Open Account
Photograph & Address of Account Holder
PAN/GIR Number
Additional Precaution
Documentation
Opening of Deposit Accounts Retail Banking Chapter 03

2.
Introduction
By opening deposit account, an individual who has no
other account with the bank, begins a relationship. As this
relationship imposes various obligations on a bank, he must
therefore be careful regarding whose account he opens. An
account can be opened by anyone who can enter into a valid
contract. Minors may also open an account jointly with their
guardians. This chapter will explain factors that you should
consider and the documents that you should procure to open an
account.
Opening of Deposit Accounts Retail Banking Chapter 03

3.
Who Can Open Account
These accounts can be opened by those who have funds
in hand. But the person who have unsound mind can’t open
account. The others like eligible to open an account. e.g. are:
1. Individuals
2. Sole proprietorship
3. HUF
4. Partnerships
5. Trusts
6. Associations
7. Limited companies etc.
Opening of Deposit Accounts Retail Banking Chapter 03

4.
Introduction to Open Account
The RBI insists the account should be properly
introduced. The banker will get legal protection u/s 131 of the
Negotiable Instrument Act only if the bank has acted in good
faith and without negligence. RBI also states that proper
identification enables the bank to trace the person later if
required. The account should not be opened without meeting
between the bank official and the customer. The introduction
should be by:
-An existing customer
-A respectable person of the local community
-Another bank/ banker
Opening of Deposit Accounts Retail Banking Chapter 03

5.
Photographs
Bank must obtain photographs of the customer/
customers to check the identity of the person operating the
account. In the case of minors, the guardian’s photographs
should be obtained. The photograph should be recent. The cost of
such photographs may be born by the customers. The customers
must submit two photographs. Photographs cannot be a
substitute for specimen signatures. Photographs need not be
insisted upon in following cases:
-A new saving account where cheque facility is not
provided.
-Fixed and other term deposit up to an amount of
Rs.10,000/-
-Account like cash credit, overdraft etc.
-Bank also need not insist on photographs for accounts of
staff member (single/joint).
Opening of Deposit Accounts Retail Banking Chapter 03

6.
Address of Account Holder
Bank must obtain full and complete address of
depositors. Independent confirmation of the address must be
obtained in all cases (like recent telephone bill, electricity bill
that is in his name or some other acceptable correspondence or
document like ration card. A driving license and even a passport
(sometimes) is not an acceptable document in support of one’s
address (as they may not be up to date). As a precaution, bank
should, after the account has been opened send a letter to the
customer at the address on the account opening form.
Opening of Deposit Accounts Retail Banking Chapter 03

7.
PAN/GIR Number
When any account is opened by initial deposit of Rs.
50,000/- or more, PAN/GIR number must be obtained. If an
account opener does not have a PAN/GIR number, he must be
requested to submit Form 60 of the Income Tax Department.
The specimen signature of the client has to be procured
with the account opening documentation.
The opening of new accounts should be authorized by
the branch manager or by the person to whom the authority has
been delegated.
It must be ensure that all account opening formalities
are undertaken at the bank’s premises and no document is
allowed to be taken out for execution.
Opening of Deposit Accounts Retail Banking Chapter 03

8.
Additional Precaution
Following is the additional precaution for opening of
current account.
Bank must insist on a declaration from the account holder to
the effect that he is not enjoying any credit facilities with other
banks. If customers are enjoy any such facilities the particulars of
such to be obtained. The account opening banks should obtain a
no-objection from lending banks. If no response is received after a
fortnight the account may be opened.
Opening of Deposit Accounts Retail Banking Chapter 03

9.
Documentation
Following is the list of different entities who wish to open
a deposit account. Let’s look briefly the documentation and the
other information required by each of them for opening an
account.
Individual:
Make an application in prescribed form.
Proof of identity any one of following;
Driving license
Passport
Photo credit card
Election ID card
PAN card
Opening of Deposit Accounts Retail Banking Chapter 03

10.
Documentation
Proof of Address any one of following;
Telephone bill
Recent electricity bill
Ration card etc.
Signature verification: by passport or self cheque if customer has
another account.
Client accounts opened by professional intermediaries:
The client must be identified.
Banks may hold ‘pooled’ accounts managed by professional
intermediaries on behalf of entities like mutual funds, pension
funds etc.
Opening of Deposit Accounts Retail Banking Chapter 03

11.
Documentation
Where funds held by the intermediaries are not co-mingled
at the bank, the entire beneficial owner must be identified.
The ultimate responsibility for knowing the customer lies with the
bank.
A Sole Proprietorship should submit:
A certified true copy of its shops and establishment, license or any
other approval from the government.
A declaration from the sole proprietor that he is the sole
proprietor.
Opening of Deposit Accounts Retail Banking Chapter 03

12.
Documentation
Accounts of Politically Exposed Persons
Bank should gather sufficient information on any
person/customer of this category intending to establish a
relationship and check all the information available in the public
domain.
Banks should verify identity of the person and should seek
information about sources of funds.
The decision to open account of PEP should be taken at senior
level.
The above norms may also applicable to the closed relatives or the
family member of PEPs.
Opening of Deposit Accounts Retail Banking Chapter 03

13.
Documentation
Accounts of non-face-to-face customers
With the introduction of telephone and electronic banking there
must be specific and adequate customer identification procedure to
mitigate the higher risk.
Certification of all the documents presented may be insisted.
Lower Income Group: In October 2005 the RBI stated
that KYC guidelines should not be an excuse for banks to keep the
poor away from the banking system.
A simplified procedure could be provided for opening of accounts
in respect of those persons who do not intend to keep balances
above Rs. 50,000/- and whose total credit in one year is not
exceeds Rs. 1,00,000/-.
Opening of Deposit Accounts Retail Banking Chapter 03

14.
Documentation
Hindu Undivided Families:
A HUF deed.
The account is opened in the name of KARTA or in the name of
the HUF business.
Certified true copies of return for last two/three years.
A HUF declaration that has been signed by all the coparceners
affirming the composition of the HUF.
Opening of Deposit Accounts Retail Banking Chapter 03

15.
Documentation
A Trust/Nominee or Fiduciary Account
A certified true copy of the trust deed or the charter under which
it is opened.
Its byelaws;
A list of its trustees including their address and telephone number;
A resolution of the trustees to open the deposit account and the
manner it is to be operated.
Opening of Deposit Accounts Retail Banking Chapter 03

16.
Documentation
Partnership Companies Should Submit
A certified true copy of partnership deed.
A list of all partners and their address mentioning if they are
limited partners.
Attested true copy of resolution of the partners to open the
account.
Power of attorney granted to a partner or an employee to transact
business.
PAN card
Telephone bill for address proof.
Opening of Deposit Accounts Retail Banking Chapter 03

17.
Documentation
An Association/Club/Society should submit
Its certificate of registration.
A copy of its governing body resolution.
A certified true copy of its byelaws
List of management committee members.
Management committee resolution to open the account and the
manner it is to be operated.
Opening of Deposit Accounts Retail Banking Chapter 03

18.
Documentation
Limited Companies should submit:
Their Memorandum and Articles of association.
The certificate of incorporation.
The certificate of commencement of business in case of public
limited companies.
Principal place of business.
Copy of PAN card.
Mailing address and fax number.
Proof of address.
Opening of Deposit Accounts Retail Banking Chapter 03

19.
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