Types of customers for a bank Part 3

Accounts for Hindu undivided family (HUF), Trusts, Associations, clubs and societies are discussed in this post. This post is in continuation with my previous post on types of customers for a bank.

Accounts for Hindu Undivided Family (HUF):

HUF is neither a legal person nor a natural person. It is not created by agreement. It is not incorporated under any Act. It is from a common ancestor and membership is by birth or adoption. The property owned by this family will be through lineal ascendants or any ancestors. An HUF, or a Hindu Undivided Family, is a separate tax entity in addition to individual persons who are members of such an undivided family. An undivided family is one where the property hasn’t been partitioned among the sons and daughters.

HUF Accounts.jpg
HUF Accounts

There are a few features of HUF account that makes it different from regular saving bank accounts.

  • Karta of a HUF is the senior most male member of the family and in financial terms he can also be called manager of the family.
  • In this account a corpus is created where every family member can pool their income.
  • The corpus will be handled by or authorized to handle by Karta (head of the family).
  • Signature of karta will be required for every transaction from the bank.
  • HUF can not be partner as per Supreme Court Judgement.
  • HUF will have a unique PAN card; this PAN card along with the PAN of Karta should be produced.


Accounts for Trusts:

Trusts can be of two types –

  • private trusts where beneficiaries are certain specified individuals or groups
  • public trusts where beneficiary is public at large.

Documents Needed

While opening account for a trust, the bank obtains the following documents from the trust:

  1. A duplicate of the constitution of the trust
  2. The trust deed, if available
  3. Testament of enrolment and an affirmed duplicate of the passage of the general population trust’s register
  4. Open Trust Register Number.
  5. A rundown of the present trustees and the power designating them as trustees.
  6. The vital determination went by the trustees for opening the record with the bank.
  7. Attested duplicate of the determination marked by every one of the trustees on the behaviour of the record. For Trusts which have no constitution, instruments of trust or plan is required.

The operation and other aspects of the bank account are to be conducted as per the Trust Deed. If trust deed is silent about operational authority, all trustees have to operate the account jointly.

Death or insolvency of a trustee does not affect the trust property and the bank can pay cheques issued by the deceased trustee prior to his death.

Accounts for Clubs and Societies

  • For opening account of Clubs and Societies bank will require Certificate of Registration, Bye laws of the Society, and resolution of Managing Committee or Executive Committee.
  • Operational Authority will be as per resolution of Managing Committee.
  • Change in Operational authority as per resolution of Managing Committee.
  • Stop payment and revocation of stop payment as per Operational Authority.
  • Cheque signed by the secretary or treasurer or president of society and presented after his death can be paid if otherwise in order.

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