Types of customers for a bank Part 1

Banks offers a variety of accounts to its customers starting from minor accounts, mandate holders, accounts for illiterates, blind people, partnership firms, LLPs and so on. In this article, let us look at the different types of accounts that a bank offers to its customers having different requirements and its features.

Bank accounts for Minors

A minor is a person who has not attained the age of 18 years. A person will become major at the age of 18 whether guardian is natural or appointed by a court of law.

Guardians: There can be three types of guardians

  • Natural guardians like father, mother
  • Testamentary Guardian: A Guardian appointed by Will. Natural guardian may appoint somebody to act as guardian after his or her death through will. But such guardian will come into picture only on the death of natural guardian.
  • Legal guardians: A Guardian appointed by Court. If neither natural or testamentary guardian then appointed by court.
types-of-customers
Types of customers

Loan to minor: Banks do not grant overdraft / loan to a minor, even if security is provided because a contract with minor is void, and the bank will not be able to recover the loan.

  • As per section 11 of the Indian Contract Act, 1872 a minor is not competent to enter into a contract and the contract entered into by him is void ab-initio.

Can 2 minors open a joint account ?

            A minor can open self-operated deposit account provided he has completed the age of 10 years and is literate. Joint account is also allowed in the name of two minors provided both are of 10 years of age, are belong to the same family and operation is jointly. In case of death of minor, payment to legal heirs of minor.

Bank accounts of Visually Challenged (Blind) Persons

  • A visually challenged person is competent to the contract like any other person.
  • Signature or thumb impression of the blind person should be attested by an independent witness to the effect that all terms and conditions were properly explained to the blind person in his presence.
  • Cash deposit and withdrawal by blind person should be handled by the officer of the bank.
  • RBI has advised banks to ensure that all the banking facilities such as cheque book facility including third party cheques, ATM facility, Net banking facility, locker facility, retail loans, credit cards etc are invariably offered to the visually challenged without any discrimination.

Bank accounts of Illiterate Persons

  • An illiterate person is competent to contract like any other person.
  • Cheque book is not issued to illiterate depositor for cash payments.
  • Cheque book can be issued for making statutory payments, post dated cheques for repayment of instalments of loan. In such cases, the cheques will be crossed account payee and thumb impression of the illiterate depositor will be verified on such cheques at the time of issue of cheque book by competent authority of the bank.

In part 2 of this article I will continue with the other types of customers…


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