project report final on deposite

8/11/2019 Project Report Final on Deposite

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Know Your Customer

1. Know Your Customer (KYC) Guidelines

1.1. Know Your Customer (KYC) guidelines are

seen as important tools to ensure that the banking system is not used for laundering proceeds of criminal activities. KYC norms/guidelines play a very important role in preventing money laundering through banks.

1.2 In the context of the recommendations made by the Financial Action Task Force

(FATF) on Anti Money Laundering standards and on combating financing of terrorism,RBI has specified certain standards based on which our Bank has formulated a policy onidentification and acceptance of customers to have a business relationship.

1.3 For the purpose of KYC policy, a 'Customer' is defined as

i. A person or entity that maintains an account and/or has a business relationship

with the bank

ii. one on whose behalf the account is maintained (i.e. the beneficial owner)

iii. beneficiaries of transactions conducted by professional intermediaries, such as

Stock Brokers, Chartered Accountants, Solicitors etc. as permitted under the law,

iv. any person or entity connected with a financial transaction which can

pose significant reputational or other risks to the bank.

1.4 Objectives of KYC Guidelines

1.4.1 The main objective of KYC guidelines is to prevent banks from being used,intentionally

1.4.2 Know Your Customer is the principle on which the banking system operates toavoid the pitfalls of operational, legal and reputation risks and consequential losses byscrupulously adhering to the various procedures laid down for opening and conduct ofaccounts.

1.4.3 While prudent procedures existed in the banking system for opening of an account


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with a bank, these measures have come into greater focus with increased cross bordertransactions

2 . Customer Acceptance

2.1 Before commencing a business relationship with a prospective customer, the branches have to ensure that such a relationship does not, in any way, go against theBank's Customer Acceptance Policy which is based on two principles namely

i. No account is opened in anonymous or fictitious/ benami name(s) and

ii. Customers are categorised based on risk perceptions in terms of thenature business activity, location of customer and his clients, mode of

payments, volume of turnover, social and financial status, etc.

2.2 Risk Perception

2.2.1 The perception of the money laundering risk will primarily depend on the countryof domicile of the customer of the Bank. Countries that have the following indicativecharacteristics will be treated as high risk countries.

i. Without adequate anti-money laundering standards and regulations or

ii. Where there is a politically unstable regime with high levels of public or private

sector corruption or

iii. That are known to be drug producing or drug transit countries; or

iv. That have been classified by Financial Action Task Force (FATF) as

Non Cooperative Countries and Territories (NCCT)

2.2.2 Deposits A list of these high risk countries is given in Ann exur e 1.1 .


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Annexure 1.1

Indicative list of High Risk Countries

S.No. Country

1 Tajikistan

2 Kyrgyzstan

3 Armenia

4 Belarus

5 Uzbekistan

6 Georgia

7 Kazakhstan

8 Moldova

9 Azerbaijan

10 Libya

11 Iraq

12 Cuba

13 Afghanistan

14 Zimbabwe

15 Angola

16 Russia

17 St Vincent & and Grenadines

18 Cook Islands

19 Guatemala

20 Ukraine

21 Turkmenistan


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22 Nigeria

23 Myanmar (Burma)

3. Customer Profile

3.1 Branches should prepare a profile for each new customer based on riskcategorization. A format of the Customer Profile is given in Annexur e 1.3 . The customer

profile contains information relating to customer's social/financial status, nature of business activity, information about his clients' business and their location, etc

Annexure 1.3 ......................................................Branch

Part B - Business Profile

(to be used for accounts of business entities including Sole Proprietor concerns)

Note: i. This is in addition to Customer Profile Part A

ii. To be verified/filled in by the Authorized Officer and signed by

Customer and Officer

.

Geographical location of the business Nature/Activity of business /occupation Estimated income from the business Rs................................... per annum Any other source of income (indicate the source) Rs. Total annual income Rs. Approximate value of movable and immovableAssets Details of existing bank accounts, if any

Details of Credit Facilities, if any, availed (If space provided is found insufficient, furnish in a separatesheet) Details of foreign countries, if any, visited during lastthree years


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Date: : .

Customer Authorized officer of Bank

(With Name and SS No.)

3.2 The nature and extent of due diligence will depend on the risk perceived by the

branch. However, while preparing customer profile, branches should take care to seek

onlysuch information from the customer which is relevant to the risk category and is notintrusive.

The customer profile will be a confidential document and details contained therein shall

not be divulged for cross selling or for any other purposes.

4. Customer identification Procedures

4.1 Customer identification means identifying the customer and verifying his/her/its

identity by using reliable, independent source documents, data or information

4.2 Branches need to obtain sufficient information to their satisfaction, to establish the

identity of each new customer, whether regular or occasional and the purpose of theintended nature of banking relationship. 'Being satisfied' means that the branch must beable to satisfy the competent authorities that due diligence was observed based on the risk

profile of the customer in compliance with the extant guidelines in place.

4.3 Besides risk perception, the nature of information/documents required would also

depend on the type of customer (individual, firm, corporate etc.). For customers who are


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natural persons branches should obtain sufficient identification data to verify the identityof the customer, his/her address, location and also his/her recent photograph.

4.4 For customers who are legal persons or entities, requiring an extra element of

caution, branches should apply intensive Customer Due Diligence and take reasonable

measures to identify the legal entity, beneficial owner(s) and verify his/her/their identityto their satisfaction..


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An account opened in the names of two or more individuals is known as a joint

account. At the time of opening a joint account, instructions as to the operations andsurvivorship should be obtained from all the account holders. The operational and

payment instructions of a joint account can be in the following forms:

i. Joint (without survivorship clause ).

The account is to be operated by and the balance in the account is payable to all the

account holders jointly. In the event of death of one of the account holders, operations

in the account should be stopped; the balance in the account is payable to the

survivor/survivors and the legal heir/heirs of the deceased.

ii. Join t or Sur vivor/s (with sur vivorship clause )

The account is to be operated by and the balance is payable to all the account holders

jointly. In the event of death of one of the account holders, the balance in the account

is payable to the survivor/survivors jointly. He/they can be allowed to continue the

account or withdraw the entire balance without reference to the legal heirs of thedeceased.

iii. Eith er or Survivor

The account is opened in the names of two persons to be operated by either of them.

In the event of death of one of them, the balance is payable to the survivor. The

survivor can be allowed to continue the account or withdraw the entire balance.

iv. F ormer or Survivor

The former, i.e. the first named person, has full control over the deposit amount and

its disposal. He may deal with the deposit as he likes during his life time. The survivor

will get the rights only after the death of the former.

v. Anyone or Survivors or Sur vivor


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The account is opened by more than two persons to be operated upon by any of them.

In the event of death of one of the account holders, the right to operate the account

and the entitlement to the balance vests with the survivors jointly. A fresh mandate

c. Minor

i Every person domiciled in India attains the age of majority on his completing the

age of 18 years and not before, including minor of whom a guardian for the person and

property is appointed by a court. In computing the age of any person, the day on which he

was born is to be included as a whole day and he shall be deemed to have attainedmajority at the beginning of the eighteenth anniversary of that day.

ii Normally an account in the name of a minor should be opened and operated by his

natural guardian or by the guardian appointed by a Court. In the ledger the account may be opened in the following form:

iii Savings Bank and Term Deposit accounts can also be opened by a minor to be

operated by himself provided he has completed the age of 14 and has powers ofunderstanding and discretion. The Savings Account should be operated by withdrawalslips only and no cheque book should be issued. No current account can be opened by aminor to be operated by himself. Current accounts in the name of minors to be operated

by the Guardians can be opened, only after obtaining the permission from the CircleHead. (For further details regarding opening of current accounts for minors please referto Chapter 6 of this Manual)

iv Accounts can also be opened by the natural guardian jointly with the minor. In such

Avinash (Minor)

by Guardian

Aravind


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Vii On the minor attaining majority, the right of the guardian to operate upon the

account automatically comes to an end. Any balance in the account should be deemed to

be the exclusive property of the erstwhile minor who alone has the right to deal with it. Anotice ( Annexure 2.3 ) should be sent to the guardian well in advance asking him not tooperate on the account effective from the date on which his ward attains majority. A copyof the notice should be sent to the minor also.

Notice to be given to the Guardian Annexure 2.3

Branch : ........................................ Date : .........................

To

..........................................................

.........................................................

Dear Sir,

Account opened by you on behalf of .......................... (Minor)


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According to the records of our bank

Mr/Ms................... the minor, attains majority on ..................... As from the date, he alone will beentitled to operate on the account and you would cease to have any authority to operate on thesaid account unless you are given a mandate on the bank s prescribed form by him to do so.

We shall be glad to supply the mandate form on application.

Please note accordingly.

Yours faithfully,

Manager

Copy to: ...................... for information (State the name of the minor account holder)

Note : For the reference of branches, the mandate form is given as Annexure-2.4.

d . Illiterate Person

i. The rules of business have to be properly explained to the illiterate person in a

language which he can understand. He should be advised that for withdrawing money he

Should personally come to the bank with the pass book and that the account should be

Operated only by withdrawal slips. On no account should a cheque book be issued.

ii Left hand thumb impression of the depositor should be obtained in the specimen

signature card in the presence of the officer concerned. In case it is not possible to obtainleft hand thumb impression of the person, the right hand thumb impression may beobtained.

iii As in other categories of depositors, the passport size photograph of the illiterate


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person should be obtained. The purpose of obtaining the photographs is for identification.In case of illiterate persons three copies of photographs should be obtained instead of twocopies obtained in all other cases. The photograph should be pasted/stapled on theaccount opening.

form/specimen signature card, ledger and pass book/term deposit receipt. The left/right

hand thumb impression of the depositor and the countersignature of theManager/Asst.Manager attesting the thumb impression and photograph should be affixedin such a way that a portion of these extend on opening form/pass book/receipt.

Iv At the time of withdrawal/repayment of deposit amount and/or interest, the account

holder should affix his thumb impression in the presence of the passing officer whoshould verify the identity of the person from the photograph attached to the specimen

signature card/account opening form prior to passing the instrument for payment.

V The opening form, specimen signature card and the relative ledger folio should carry

the notation that the account holder is an illiterate person.

Vi Current account should not be opened in the name of an illiterate person.

e Blind Person

i Utmost care should be exercised in opening accounts in the name of blind persons in

view of the following :

1. The blind persons are vulnerable to cheating as they necessarily depend on others

for all their transactions.

2. The terms and conditions of the account or the nature of the account might have

been misrepresented to them and signature obtained by someone else.

3. The signature may be disputed by them and ignorance may be pleaded on account of


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blindness.

ii In the case of literate blind persons, who could sign their names, in addition to theirsignatures, thumb impression should also be taken on the specimen signature card, as thesignatures by such blind persons may not be consistent. It should be clearly noted in redinkbin the account opening form and ledger folio that the account holder is blind. Thiswill enable the staff to exercise caution in respect of transactions in the account.

iii Cash payments to a blind person should always be made in the presence of a person

known to the bank who should also sign as a witness. While such witnesses should be preferably customers of the bank, a bank official other than the paying cashier may alsosign as a witness.

iv Cash deposits by a blind person should be received in the presence of a witness (a

customer or any employee of the Bank other than the receiving cashier) and the amount

deposited should be confirmed to the blind depositor orally.

v All other precautions and procedures outlined for illiterates should be followed in

the case of blind persons also.

vi The visually impaired persons are eligible to avail cheque book, ATM and locker

facilities and the guidelines covering the above services are given in the respectivechapters.

II Sole-proprietary concerns


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i Where an individual is trading under trade name, the account should be opened in

the name of the proprietorship concern. The Account Opening Form may be signed ineither of the following ways:

Sujay or For Ajay Trading Company

Sole-Proprietor Sujay

Ajay Trading Company Sole-Proprietor

ii The law does not distinguish between the proprietor and the proprietary concern.

Therefore, accounts of proprietary concerns can be, for the purpose of operation, treatedas individual accounts.

iii The proprietor may authorise another person to operate on the concern s account by

giving a mandate or executing a power of attorney in favour of the latter.

III . Joint Hindu Family

i. It is also known as Hindu Undivided Family (HUF). Generally, a Joint Hindu Family

has some property jointly owned by all the members as ancestral property. According to

Hindu Law, the ownership of such property passes on to the members of the family,

known as co-parceners. According to Mitakshara School of Hindu Law, every malemember of a family acquires an interest in the joint property by birth, such right accruingfrom the date of conception. After the enforcement of Hindu Succession Act 1956, theshare of the deceased co-parcener who was a member of the Joint Hindu Family isdivisible amongst his wife, daughters and other relatives as given in the Act.


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ii . The bank may open accounts in the name of Joint Hindu Families of respectability

and means. The joint family business is carried on by the senior most male member of the

family known as Karta or the Manager who acts on behalf of the joint Family. Theaccount can be opened in the name of the Karta or in the name of the family business.The fact that the account is a Joint Hindu Family account should be noted on the top ofthe ledger folio.

iii The photograph of Karta should be obtained.

Iv Joint Hindu Family Letter (Annexur e 2.5 ) should be obtained duly signed by the

Karta, adult co-parceners and guardians of minor members on behalf of the minor. In any

case, the names of minor members and their dates of birth should be noted therein so thatthe dates on which they attain majority may be diarised and a fresh Joint Hindu FamilyLetter taken when any minor attains majority. All the places where the firm or jointfamily business is established and the name under which they trade and the names ofother firms with whom they are associated should also be verified and recorded.


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Annexure 2.5

Joint Hindu Family Letter

Place ...............

Date ...............

To

The Manager

Indian Bank

Dear Sir,

We beg to notify to you that we are the only adult members of a Joint Hindu Family

carrying on business in .............. (place) under the name and style of ............


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We hereby engage that we shall be bound jointly and severally to repay all the debts

incurred to you either on bills, pronotes, or any other documents by anyone of us on behalf of the family, until notice to the contrary is given to you and we further agree thatall transactions entered into by any of us whether under the signature of the family orsubscribed by the individual signatures of the persons entering upon the transactions may

be treated by you as entered into and on behalf of the family, unless intimation to thecontrary in writing is given to you previously at the time of any particular transaction tothe effect that it is not on behalf of the

family.

As each of us is individually liable to you to discharge all the obligations incurred to

you by any one of us on behalf of the family, we hereby agree that you will be at libertyto recover all outstandings due not only from our joint family business assets but alsofrom our separate properties as well, as if we had also individually signed the documents;

and we shall not at any time dispute any transaction as not being for the benefit of thefamily.

Yours faithfully,

1 . ........................................2..............................................3..............................................

To be signed by the karta and all other adult members of the family

Iv Partnership firms


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i Partnership is the relation between persons who have agreed to share the profits of a

business carried on by all or any one of them acting for all. Partners collectively arecalled a firm. Thus, there are three essential requisites for a partnership :

a.There must be an agreement (written, verbal or implied) among the persons

concerned.

b. The agreement must be to share the profits/losses of a business.

c. The business must be carried on by all or anyone of the persons concerned acting. Any person who is a major of sound mind and is not an undischarged insolvent

can enter into a partnership for a lawful purpose. A person may be natural or legal

person. i.e. Limited Company.]

ii . A partnership should not consist of more than 10 persons, if it is engaged in banking

business and 20 persons in any other class of business. Minors admitted to the benefit ofa partnership need not be taken in to account while computing the maximum number.

iii The Indian Partnership Act, 1932 provides for registration of partnership firms.

Non-registration under the Act debars a firm from suing, but it does not affect the rightsof third parties in suing the firm.

iv. A Hindu Undivided family directly or indirectly cannot become a partner of a firm

because firm is an association of individuals. Sec 4 of the Partner ship Act speaks of"Persons who had entered into a partnership with one another which could only be by anindividual and not by a body of persons"

v. Under Section 30 of the Indian Partnership Act, 1932, a minor can, with the consent

of all the partners for the time being, be admitted to the benefits of a partnership.

vi. Care should be exercised in opening accounts of partnership firms where minors


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have been admitted to the benefits of a partnership. The date of birth of the minor should be recorded in the books of the bank. The minor is not required to sign the set of account

opening forms. He cannot also be allowed to operate on the account. The minor does notget the status of a partner of a firm until he attains majority. On attaining majority, if hedoes not desire to become a partner in the firm he should give notice within six months ofhis attaining majority of his intention of not becoming a partner in the firm. Otherwise, he

becomes liable from the date he was admitted to the benefits of partnership.

V . Limited companies

i. A Limited company is a legal entity and is regarded as a person in law with perpetual

succession and a common seal with the capacity to contract or undertake obligations or

perform transactions in its own name. The liability is limited to the extent of the share

capital and the liability of a shareholder is to contribute uncalled portion on shares.

ii. A Private company is a company which by its Articles (i) restricts the right to transfer

its shares, (ii) limits the number of its members to 50 (not including (1) persons who areinthe employment of the company and (2) persons having been formerly in the

employment of the company were members of the company while in that employmentand have continued to be members after the employment has ceased) and (iii) prohibitsany invitation to the public to subscribe for any shares or debentures of the company (i.e.,

prohibits issue of prospectus). When two or more persons hold one or more shares in acompany jointly, they shall, for the purposes of this definition, be treated as a singlemember.

iii. A Public Limited Company means a Company which is not a Private Company.

Every company registered under Section 25 of the Companies Act 1956 and everycompany limited by guarantee and not having a share capital will be a Public LimitedCompany where the number of persons is not limited to 50 and all the provisions of theCompanies Act, 1956, applicable to Private Companies will apply to them also.

iv. A Government Company is a company in which a minimum of 51% of the share


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capital is held by the Central or State Government.

vi. Certificate of Incorporation is a certificate issued by the Registrar of Companies

when the company (newly formed) fulfils all the necessary requirements under theCompanies Act.

vii. A Public Limited Company is required to have a Certificate of Commencement of

Business before it commences business operations. This certificate is issued by theRegistrar of Companies, after the company complies with certain requirements of sharecapital, etc. Without this certificate, a Public Limited Company cannot enter into anycontractual obligation.

viii. Memorandum of Association is the charter on which the company exists and within

which it operates. It sets forth the objects and powers of the company. A company cannot

undertake any operation which is not mentioned in the Objects clause of theMemorandum of Association. Any act done or contract entered into by the companywhich is outside the scope of these objects will be ultra vires (i. e. beyond the powers) ofthe company and therefore not binding on it. Any such act or contract cannot be ratifiedeven by the general body of the share holders.

ix. Articles of Association contains the rules and regulations of the Company. The

Articles are subordinate to and controlled by the Memorandum. Articles of Associationcover such matters as the rights and powers of Directors, their share qualifications, themode and form in which the business of the Company is to be carried on, the proceedingsof and voting in a meeting, etc. Alterations in the Memorandum and Articles ofAssociation can only be done in accordance with the relevant provisions in theCompanies Act, 1956. The bank must satisfy itself that any alteration in these documentsis duly done before it acts on the altered provision.

is optional.

VI. Schools, Colleges etc.


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i. The Schools or colleges may be run by trusts, societies, etc.

ii.The opening form should be signed by the President and countersigned by the Secretary

and the specimen signature shall be for and on behalf of the School or College with the

designation of the signatory added to his signature.

iii. The following documents should be obtained :

a. A certified copy of the rules and regulations of the institution.

b. A list of the names of the persons comprising the Governing Body. The

updated/revised list should be obtained every year.

c. A copy of the resolution of the Governing Body authorising opening and

operation of the account, duly certified by the Chairman of the meeting in

which it is passed.

d. The photographs of persons authorised to operate the account.

iv. The operation of the account shall be strictly in terms of the resolution.

v. Before opening accounts for Government schools, the branch should ensure whether

the school/college is authorised to open an account by the Education Department and the

usual terms and conditions on which such accounts are allowed to be opened should be

verified. The account opening form should be signed by the persons authorised to openand operate the account as per the Government Order. The operations should be allowedas per the terms and conditions/rules framed by the Education Department for this

purpose.

vi. In case of aided schools, the permission of Board of Secondary Education isnecessary. Before accepting an account in the name of an aided school, the Managershould make sure that the Governing Body of the School has the permission.


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VII . Government/Semi-Government Department, Taluk/District

Boards

.i. RBI guidelines for opening of accounts

a . Central Government Department: After the introduction of departmentalisation ofaccounts in various Ministries/ Departments, public sector banks have been allocated todifferent Ministries/Departments with whom the Ministries could bank. TheMinistries/Departments will have their banking transactions only with the designated

bank/branch.

b. Public Sector Undertakings: Public sector Undertakings would mean Corporationsand Companies wholly owned by the Government of India or in which more than 51% ofthe capital is held by the Government of India.

1. A Public Sector Undertaking, existing or new, will be free to deal with anyof the public sector banks, subject however to any special provisions in any Act ofParliament or of State Legislature in respect of Statutory Corporations

.

2. It would be open to a Public Sector Undertaking to deal with one publicsector bank, or a consortium of public sector banks, depending on the unit s operationalconvenience and the extent of credit requirements.

3. If a Public Sector Undertaking wishes to transfer its entire account from one public sector bank to another, it is open to it to settle the matter in consultation with the

banks concerned.

4 Statutory Authorities/Local Bodies etc., The guidelines will apply to StatutoryAuthorities which derive the bulk of their income from Central Government cesses andLocal Bodies in centrally administered territories.

c. Local authorities such as Municipal Corporations: Panchayat Boards etc., are


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created by specific Acts of the State Legislature or Parliament. Their Constitution,functions and powers are, therefore circumscribed by the provisions of the Act. Anytransaction which is ultra-vires the provisions will place the bank in a very weak position.

Payment of Cheques

1. Introduction

Definition

As per Sec 6. of the Negotiable Instruments Act, " a cheque is a bill ofexchange drawnon a specified banker and not expressed to be payable otherwise on demand andincludes theelectronic image of a truncated cheque and a cheque in the electronic form ."

A cheque is a written order given by an account holder to the bank to paymoneyfrom his account. It is a statutory obligation on the bank to comply with therequirement

provided:i. the cheque is properly drawn;

ii. there is sufficient balance in the account; andiii. there is no legal restraint on the bank s duty to pay. The obligation arises

only inrespect of savings and current account holders and not for term deposits.

1.1 Electronic cheque

Electronic cheque (E cheque) means a cheque which contains exactmirror image of


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a paper cheque and is generated, written and signed in a secure system ensuringtheminimum safety standards with the use of digital signature (with or without bio-metric signature)and asymmetric crypto system.

E-cheque is valid and is deemed to have all the features of a real papercheque andwhile making the payment the drawee bank is duty bound to honour the e-cheque

by openingand verifying the digital signature of the drawer.

The following procedure may involve in generating an electronic cheque:

i. Mirror image of the blank paper cheque will be made available in a system.

ii. The customer has to enter the details like beneficiary, date, amount etc, inthe appropriatespaces allocated.

iii. The customer has to add his digital signature in the space provided in theimage in

the system to make it secure under asymmetric crypto system ( by usingthe private

key of the drawer).iv. Addition of biometric signature is optional.

.

1.2 Truncated cheque

A truncated cheque means a cheque which is truncated during the course ofa clearingcycle, either by the clearing house or by the bank whether paying or receiving

payment,immediately on generation of an electronic image for transmission, substitutingthe further

physical movement of a cheque in writing. .

1.3 Features of a chequei. Any cheque presented for payment should be scrutinised in respect of the

following:ii. Form of the cheque;iii. Branch drawn on;iv. Date of the cheque;

v. Payee;vi. Whether order or bearer;


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vii. Endorsements, if any;viii. Amount;ix. Crossing, if any;

2. Form of a Cheque

2.1 Current account rules of the Bank provide that cheques must be drawn onBank s

printed cheque forms only, supplied by the bank. The Bank reserves the right torefuse

payment of cheques drawn otherwise. For savings accounts, withdrawal slipssupplied by theBank may also be used for withdrawals.

2.2 In exceptional cases, written instructions from the customer to make payment, inthe form of a letter, may be accepted. It is better in such cases to obtain aconfirmatorycheque (in Bank s form) from the customer and file it along with the relevantvouchers.

2.3 Branches should discourage the practice of cheques containing extraneousmatterslike towards premium on policy No. .......... own life bein g issued and return

such cheques, if presented giving the reason cheque contains extraneous matter.

2.4 Cheques should be written (filled in) in non-delible ink. Ball point pen mayalso beused for writing cheques. Customers should be discouraged from issuing typedcheques, asthey can easily be altered. However special typewriter with pin point types areavailable forwriting cheques which render alterations difficult.

3. Drawee Branch

3.1 Cheques should be presented for payment only at the branch where theaccountholder maintains the account. The bank has no obligation to pay cheques drawn

by a


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customer and presented for payment at a branch other than the one where theaccount ismaintained.

3.2 If payment at par facilities at selected branches have been sanctioned to a

customer,then such cheques can be paid at the designated branches following the procedure

prescribedfor payment thereof. (e.g.. refund orders of the companies etc.). Usually such

payments aremade to the debit of BPFR account and reimbursement obtained from the branchmaintainingthe customer s account.

3.3 Exclusive guidelines are available for payment of cheques at other branches

underCBS environment.

4. Date of Cheque

4.1 Every cheque presented must bear a date of its issue.4.2 A cheque presented may bear

i. the date of presentation;ii. a date previous to the date of presentation; or

iii. a future date.

4.3 A cheque is antedated, if its ostensible date is previous to the date of itsissue. Acheque is considered stale or out of date, if it bears a date at least six months priorto the dateof presentation. In a post dated cheque, the ostensible date is subsequent to thedate of issueor presentation. An antedated cheque can be paid, but not a stale or post datedcheque.

4.4 A stale cheque can be revalidated by the drawer by writing the wordsRevalidated on .............. followed by his signature. Such a cheque will receiv e fresh lease of lifefrom thatdate.

4.5 Payment of a post-dated cheque (before its ostensible date) is not inaccordance with


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the instructions of the drawer. The bank may be compelled to refund the amountof thecheque to the drawer (i.e. recredit his account), in case its payment is stopped bythe drawer.

4.6 If the cheque bears a non-existent date, immediate preceding date can be takenas theostensible date for payment. For instance, if the cheque is dated 31st November,

but is inorder in all other respects, it can be paid on 30th November.

4.7 A cheque written in Hindi and bearing a date in Hindi as per NationalCalendar isvalid and ought to be accepted/honoured by the Banker, if otherwise in order.Hence,

branches may pay cheques bearing a date as per National calendar, if otherwise inorder.

5. Payee

5.1 The name of the payee should be clearly and unambiguously mentioned inthecheque.

5.2 A cheque in favour of joint payees ( e.g. Shri A and Shri B ) should be paid

to both/allof them jointly. Where the cheque is in favour of alternative payees ( e.g. Shri Xor Shri Y )

payment can be made to either/anyone of them.

5.3 Cheques made payable to cash or order or made out to fictitious payees, e.g.LordKrishna or Order should be treated as payable to the drawer or to his order.Such chequesshould be paid, only if they are discharged by the drawer himself or the paymentis made tothe drawer or to his known agent.

5.4 Normally no cheque drawn in favour of a limited company should be paid to athird

party because it is the usual practice for a limited company to lodge chequesdrawn in theirfavour in their own bank account.


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5.5 Use of words Pay to A only on cheques would affect the legal status of acheque as anegotiable instrument, as use of such words restricts the transferability andnegotiability of

the instrument. Such drawings may also affect the legal protection available to theCollectingBanker under Section 131 of the Negotiable Instruments Act, 1881.

5.6 If a cheque made p ayable to A only is presented across the counter, it would be payable to A alone and to nobody else.

5.7 If such an instrument is presented through a banker, it would be theresponsibility

of the Collecting Banker to ensure that the proceeds of such cheque are collectedfor theaccount of A only.

5.8 In view of the reasons stated in 5.5 above, it would be desirable to discouragethedrawing of cheques payable to A only and educate the customers to cross theinstrumentsalternatively as follows:

A/c Payee OnlyNot Negotiable

6. Order and Bearer Cheques

6.1 The cheque can be drawn payable to a particular person or his order or to a particular person or the bearer of the instrument.

6.2 The printed cheque form issued by the bank is a bearer instrument. Wherethe wordbearer is cancelled with or without the word order written above it or wherethe name ofthe payee is written in such a way that it obliterates the word bearer printed onthe cheque,the cheque will be treated as an order instrument.

6.3 In cases where the cheque bears the word or order but they are deleted and


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replaced with the word bearer , the drawer should authenticate the same underhis fullsignature.

7. Payment of Bearer Cheques

7.1 A bearer cheque can be paid to any person who presents it for payment.

7.2 In case of bearer cheques:i. It is not necessary that it should bear the endorsement of the payee or a

transferee.However, signature of the presentor for having received the amount should beobtained on the reverse of the cheque.

ii. If there is any endorsement, it is not necessary for the bank to verify it.Even if there is any irregular endorsement, it can be paid.

7.3 It is not necessary for the bank to verify whether the presentor of the cheque isthetrue owner of the cheque. However, cheques made payable as under and presentedfor

payment in cash across the counter should be looked upon with suspicion, eventhough theyare bearer cheques. The officers concerned should not pass them for cash

payment, unless

the persons presenting the cheques are known to the bank or are properlyidentified.

i. The payee is a limited company;ii. The payee is another bank;iii. The payee is a firm which has got a current account with the bank and wouldnormally deposit the cheque for credit of their account;iv. The payee is a well known firm who usually would never present chequesdrawn intheir favour for payment in cash;

v. Cheques in favour of institutions, associations, public bodies, statutory boardsetc.,andvi. Cheques in favour of individuals who are not ordinarily supposed to reside inthetown.


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7.4 In addition to the above, branches should ascertain the bonafides of the presentor,while making payment of bearer cheques. If the amount of the cheque isRs.20,000 or more,

payment should be effected by branches, only after obtaining the details such as

name,address, reference, etc., on the reverse of the cheque, although it is desirable torecord suchdetails on all cheques irrespective of the amount. It is important to ensure that the

bonafide presenters of bearer cheques are not put to unnecessary inconvenience, althoughnormalcare and caution will necessarily have to be observed at all levels in the branches.

8. Amount of cheque

8.1 Normally, there should not be any discrepancy in the amount expressed inwordsand figures. According to Section 18 of the Negotiable instruments Act, if theamount of thecheque is stated differently in figures and in words, the amounts stated in wordsshall be theamount ordered to be paid.

8.2 Cheques should not be dishonoured on the grounds of difference in amount

expressed in words and figures. In all cases of discrepancy, payment should bemade on the basis of the amount written in words, in conformity with Section 18 of the Negotiable Instruments Act. The following procedure should be followed in suchcases:

i. The amount written in figures in the cheque should be rounded off andamountdebited to the account should be noted in red ink just above the amount written infigures.

ii. In respect of such cheques received for collection, the following detailsshould benoted in the realisation advice:Amount written in figures Rs. ......................... differs with the amountwritten inwords. Therefore the amount of Rs....... written in words is paid.

iii. In respect of such cheques received in clearing, the differential amount should be


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reimbursed to/claimed from the concerned branch of the collecting bank. Thismay

be done in consultation with Clearing Section/Service Branch/Main Branch as thecase may be.

iv. In respect of cheques presented across the counter either by individuals or byother

banks, if the amount written in words and figures is different, the same may be brought to the notice of the presentor, informing him that the amount written inwords only is payable. If the presentor is not prepared to accept the amountwrittenin words, he may have to take back the cheque.9. Crossing

9.1 Crossing is an indication appearing on the face of the cheque that it should be paidthrough a bank. It is generally done by drawing two parallel transverse linesacross the faceof the cheque. A crossed cheque cannot be paid across the counter.

9.2 The drawer or any holder can cross a cheque.9.3 Crossing is of two types:

(i) General Crossing

(ii) Special Crossing .9.4 The essential requisite of general crossing is the drawing of two paralleltransverselines. The words & Co. or the words Not negotiable may accompany a generalcrossing.

9.5 While Section 123 of Negotiable Instruments Act stipulates that the wordsand company or their abbreviation should, if added to a general crossing, be betweenthe two

parallel tran sverse lines, it is not so stipulated for the addition of the words Notnegotiable .

9.6 Where a cheque is crossed generally, the banker on whom it is drawn shall not pay itotherwise than to a banke


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9.7 The essential requisite of a Special Crossing is the addition of the name of a banker;the two parallel transverse lines are not necessary for a special crossing so also thewordsand company or their abbreviation, since the special crossing itself specifies the

name of aBanker.9.8 Crossing should be across the face of the cheque and not on the reversethereof.

10. Signature of drawer

10.1 The signature of the drawer appearing on the cheque should be verified withthespecimen signature provided by the customer to the bank. The bank cannot debitthe accountof the customer with the amount of a cheque on which the signature of the draweris forged,however clever the forgery may be, as the payment of a cheque where drawer ssignature is

forged is not backed by customer s mandate.

10.2 Signature forgeries which imitate the genuine signatures are produced in twoways -

(i) by free hand simulation(ii) by tracing.

10.3 The following points are given for the guidance of the branches to detectforgeries insignature:

i. Careful observation, if necessary with a magnifying glass, will often revealthefraudulent nature of most of the forged signatures.

ii. The signature on a cheque should always be compared with the specimen onrecord

by turning both of them upside down. In comparing signatures, by keepingthem


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straight, there is a natural human tendency to read the signature letter forletter,

rather than to compare it. In the process, vital differences in slope,continuity, space,.

iii. In comparing signatures, the following characteristics/guidelines should becarefully observed:

10.4 Branches may come across instances where cheques and withdrawal slipsare signedin a language other than that of the State in which the branch is situated and thatlanguagemay not be known to bank s officials. Special attention should be given while

passing suchcheques

11. Cancellation of Stop Payment Order

11.1 Instructions cancelling a stop payment notice should be in writing and signed by thedrawer. Once the stop order is cancelled, bank s duty and authority to pay arerevived.

11.2 Unless the stop payment instruction was issued by the person who drew thecheque

in which case the instruction may be withdrawn by him, the cancellationinstructions must be issued by all the parties in the case of joint accounts and accounts of firms and by all theauthorised persons in the case of limited companies, clubs, associations, etc.

11.3 A remark should be made in the Stop Payment Register regarding theremoval ofstop order. Noting made in the ledger folio as to stop order should also becancelled withsuitable note under the initials of an Officer.

11.4 The receipt of the letter cancelling stop payment instruction should beacknowledgedto the account holder.

11.5 Since removal of a stop payment order might create complications or lead to


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mistake, the customer should be persuaded to issue a fresh cheque rather thanremoving thestop order.

12. Payment of cheques through clearing

12.1 While paying cheques received in clearing, the branches should note thefollowing

points with regard to endorsements . 12.1.1 Bearer Cheques received in clearing

i. If there is any endorsement on it, it is not necessary to verify it.ii. If there is any irregular endorsement, still it can be paid.

iii. The cheques presented for payment through clearing at centreswhere

MICR clearing.


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interest bearing or non-interest bearing. Since these deposits are payable ondemand, theyconstitute the demand liabilities of the bank.2.2 Term DepositsTerm deposit or Time deposit means a deposit received by the bank for a fixed

period, which is withdrawable, only after the expiry of the said fixed period. Termdepositsinclude deposits such as fixed deposits, recurring deposits, reinvestment deposits,cashcertificates and so on. These deposits constitute the time liabilities of the bank.

3. Acceptance of interest-free deposits

3.1 Requests may be received from members of certain communities for placingdeposits

with the bank free of interest or for payment of compensation in lieu of interestsince receiptof interest is forbidden as per their religious tenets. Acceptance of interest-freedeposits,except the current account, is a violation of RBI directives, which are applicableto all depositorsirrespective of caste, creed and religion. Except as current account, no depositshould beaccepted interest free nor any compensation paid indirectly.

3.2 Branches should not accept any instructions from depositors to create anyFund,wherein interest accrued is credited, which shall be utilised for charitable

purposes.

4. Account opening form

4.1 A depositor desirous of opening an account with the Bank should complete

therelative account opening form/card (An nexure 4.1) in all respects with fullname(s) andspecimen signature(s) at appropriate places. The prospective account holdershould normally

be required to fill in the account opening form in the presence of a bank s official

4.2 Comprehensive Common account opening form for individuals


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4.2.1 It is applicable for in dividuals (either singly or jointly) opening SavingsBank,

Term Deposits (including RD) and Current Account4.2.2 It contains columns for providing Mobile No., E Mail ID, PAN/GIR

No., of the

customer4.2.3 It lists out the documents required for photo identification and address

proof of thecustomer in addition to details of introduction by an existing customer.

4.2.4 It includes columns for fixing the threshold limit, noting the purpose ofopening the

account by the customer4.2.5 It has column for incorporating additional details to categorise the

customer basedon risk perceptions

4.2.6 Separate columns for getting Date of Birth, Gender and Marital Statusof thecustomer are available to meet CIBIL requirements

4.2.7 It enables the customer to exercise options fori. Sending due date notice for matured depositsii. Standing Instructionsiii. Auto Renewal of Term Depositsiv. SWAP facility

v. Nomination facility

4.3 As Reserve Bank of India attaches utmost importance to adherence of KYCnormsand AML standards by Banks and non-adherence is viewed seriously, the Branch

Manager/Asst. Branch Manager should verify and ensure that no column of theaccountopening form is left blank. In the space for bank s use, the officers concernedhave to affixtheir signatures at the relevant places.

4.4 For all new accounts opened for individuals in TBC and CBS branches byobtainingthe comprehensive common account opening form, there is no need to obtainseparate specimensignature cards from the customers.

4.5 Scanning of Signatures and Linking to Account in TBC and CBSbranches


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4.5.1 All TBC and CBS branches should scan the signatures of all accountholders and link

them to the respective accounts in the system on the day of theopening of

account itself without fail. The officers in charge of the respective

sections are responsible for this. Branch Manager/ABM shouldmonitor

and ensur that there is no backlog in scanning of signatures.This will ensure the availability of signatures for viewing/verification

in thesystem at thetime of passing/ authorising payments, especially in the

case of MultiCity Cheques in CBSbranches.

4.6 Alignment with Core Banking Solutions

4.6.1 While designing the common account opening form for individuals,care has been

taken to align the information and details for account opening asrequired

in the account opening menu/screens in the Core Banking SolutionSoftware

, to the extent possible To note down the queue number and/orreference/

journal numbers, separate space has been allotted at the bottom of page

No.4 of the form. CBS branches should note down the queue/journal/reference numbers only at the space provided so that the opening

form

5. Nomination

5.1 Under the Banking Laws (Amendment) Act of 1983, a provision has beenmade for

providing Nomination facilities to banks customers in respect of Depositaccounts.

5.2 The salient features of the Nomination facility are given below:

5.2.1 A depositor or depositors jointly maya . nominate a single person in Form - DA 1 (Annexure 4.4) to receive

theamount, in the case of death of the depositor or all the depositors as

the case


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may be. A nominee cannot be an Association, Trust, Society or anyother

organisation or any office bearer thereof in his official capacity.

b . cancel the nomination already made - in Form - DA-2 (Annexure 4.5)

c. vary the nomination (cancellation of existing nomination and givingfresh

nomination) - in Form - DA-3 (Annexure 4.6).

5.2.2 Nomination may be made only in respect of deposits which is held inthe individual

capacity or in the name of sole proprietary concerns. However, if thereis a

change in the constitution of the business concern (For example toPartnership

or Limited Company) the nomination will stand cancelled. Nominationshould not be made in respect of a deposit which is held in any otherrepresentative capacity as the holder of an office or otherwise.

5.2.3 If any of the Joint account holders dies without giving any nomination,the surviving

depositor(s) can make a valid nomination.5.2.4 In case of a deposit in the name of a minor, the nomination shall be

made by a personlawfully entitled to act on behalf of the minor.

6. Pass Book

6.1 For all accounts with repetitive transactions (except Term deposits andCurrentAccounts) a pass book is issued for the use of the account holder. At the time ofopening theaccount, pass book should be prepared by the ledger clerk.

6.2 The customers should be asked to present the pass books for updating atfrequentintervals, e.g., for savings accounts at least once in a fortnight. Before entering inthe pass

book, the clerk should verify that he is copying from the correct account.

6.3 Custody of pass books overnight


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written in the continuation pass book and the number of pass book. i.e.continuation pass

book No. I, II and so on should be written boldly on the top of the pass book. Thefact that acontinuation pass book has been issued should be written boldly on the ledger

folio with thedate of issue.

6.5 Issue of duplicate pass book

6.5.1 It should be ensured that duplicate pass books are issued only againstwritten requisitionsfrom account holders stating the reason for the request for a duplicate. If the pass

book has been mislaid/lost the customer should undertake to return the original pass book,

when traced/found out later. The written requisition should be carefully preserved.

6.5.2 This is one of the areas prone to fraud. The officer issuing the duplicate pass bookwithout verifying the signature on the written requisition is accountable for theloss, if any,caused to the bank in the event of a fraudulent withdrawal using the duplicate pass

book.

6.5.3 The account holder should present himself /herself in person for obtainingthe duplicate

pass book. If under special circumstances the account holder requires theduplicate pass

book to be sent through a messenger, he/she should send a written authorisation tothis effectwith the messenger s signature duly attested by him. The duplicate pass bookmust be handedover to the messenger, after proper identification and after obtaining his signaturewhichshould be verified with the attested specimen.

6.5.4 When a duplicate pass book is issued, it should be prominently markedDuplicate in red ink on the cover and on the first page. A note of the issue of the duplicate

pass bookwith date should be made in the ledger heading which should be carried over tosubsequentfolios also.


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6.5.5 Charges for issue of duplicate pass books as prescribed by Head Officeshould be

recovered.

7. Procedure for issue of cheque books

7.1 When a customer presents the requisition slip, the clerk should see thati. the requisition form is the one taken from the last cheque book issued to

theconstituent;

ii. the requisition is not from a cheque book lost entirely unused (OR) lostwith few

unused cheque leaves alongwith requisition slip;iii. the old cheque book is nearly exhausted.

7..2 The requisition slip should be taken to the concerned officer by the ledgerclerk whowill issue one cheque book, after verifying the signature in the requisition slipwith thesignature on record. He should also note down the serial number of the chequesissued on therequisition slip and retain the slip with him.

7..3 The clerk should write the account number (preferably use rubber stamp) and

theledger number in all the cheque leaves, enter the first and last serial numbers ofthe chequesin the cheque books issued register (An nexur e 4.14 ) and also in the relativeledger folio.

7.4 He should also verify whether all the cheque leaves bear the name of the branch.

14.5 The name and account number should be written on the wrapper of thecheque bookand on the requisition slip attached to it.

14.6 The ledger clerk should get the acknowledgement of the customer or hisrepresentative(provided his signature is properly attested by the customer etc.) in the cheque

bookissued register and deliver the cheque book


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.14.7 At the close of business, the officer should call for the cheque book issuedregisterand check the serial numbers of the cheque leaves issued with the requisition slipsin his

possession. He should then release the requisition slips.

14.8 The officer while checking the ledger should check and initial in the ledgerat theappropriate place against the cheque numbers noted therein.

Savings Accounts


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1. Introduction

As per the definition of RBI, Savings Deposit is a form of demand deposit whichissubject to the restrictions as to the number of withdrawals as also the amount ofwithdrawals

permitted by a bank during any specified period. However, in our bank, there isno restrictionon the amount of withdrawal from savings accounts.

Savings Bank Account is the most common type of account in a bank whichcaters tothe needs of almost all sections of customers. The terms Savings Bank Account ,Savings Deposit Accounts and Savings Accounts are used synonymously. Rulesgoverning savingsaccounts are given in An nexure 5.1 .

2. Who can open savings bank accounts

2.1 Savings Bank accounts can be opened byi. a. person in his/her name;

b. two or more persons in their joint names in any one of the followingforms:

Accounts in the name of Mode of operation

A & B Either or Survivor

A & B Jointly or Survivor

A & B Former or Survivor

A, B & C Anyone or Survivors or Survivor.

ii. minors who can operate the account by themselves provided they havecompletedthe age of 14 and have powers of understanding and discretion;

iii. the natural guardians (for accounts in the names of minors) either jointly withtheminor or singly or guardians appointed by a competent court;


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provision in the Indian Companies Act, 1913 and permitted, not to add totheir names

the word Limited or the words Private Limited vi Institutions other than those mentioned in clause (i) above and whose entire

income

is exempt from payment of income tax under the Income Tax Act, 1961.vii. Govt. Departments / bodies / agencies in respect of grants / subsidies

released forimplementation of various programmes/schemes sponsored by CentalGovernments/state governments subject to production of an authorisation

from therespective Central/state Government Departments to open Savings Bank

account.viii. Development of Women and Children in Rural Areas. (DWACRA)ix. Self Help Groups (SHGs) registered or unregistered, which are engaged in

promotingsavings habits among their members.x. Nagar Panchayats, Nagar Palikas and municipal bodies in relation to funds

(centralassistance plus state share) given under Nehru Rozgar Yojana.

xi. Farmers Clubs - Vikas Voluntary Vahini (VVV).xii. Member of Parliament Local Area Development Scheme (MPLADS) -

account in thename of Collector / District Magistrate / District Commissioner.

xiii. Zilla Parishads/ Gram Panchayats in respect of funds released forimplementation of

various rural development / Welfare Programmes and / or subsidy / marginmoney

linked programme sponsored by the State Governments and Governmentof India.

Savings Bank

Eligibility Individuals, Joint accounts, Clubs, associations, trusts, Govt.Bodies, societies (including co-operatives), educational institutions,associations and other non-trading organizations.

Benefits ECS/RTGS/NEFT facilities are available

Two cheque books of 2x20 leaves free in a calendar year for

cheque operated SB accounts


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Collection of local cheques free

Collection of Outstation c heques with the presecibed charges

No charges for In tra / Inter city transactions

ICOOC ( Local / Outstation) facility available

ATM / Debit card One year from the date of first use FREE

From Second year onwards chargeable Rs.50/- per year +

applicable taxes. **

** Not applicable for the Senior Citizen Debit Cards and Biometric

Cards

24 hrs ATM facility with arrangements with various banks for

sharing of their ATMs

Multicity cheque facility Intra city, intercity transactions,Internet/

mobile /phone banking facilities are available at all branches

Nomination facilities are available

50 withdrawals permitted free per half year . Rs.6/ - will be levied

for each transaction beyond 50 transactions per half year

No TDS on interest earned on S B deposits

Min Amt Minimum amount - Rs.250/- for non cheque operation

Minimum balance of Rs.500/ - for cheque operation

Lesser minimum balance for pensioners and bonafide students

Non Maintenance of Minimum

BalanceA 30 per month for non maintenance of average monthly balance

Interest Rates In January and July on a daily product basis @4% p.a

Applications and Documents

Application

Specimen Signature Card

Form 60 or 61 (if customer does not have PAN card)

Photograph of depositor/s (2 copies)

Proof of address as per KYC norms

Any other related documents applicable to Students, Minor, HUF,

Trusts etc.


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3. Prohibition against opening of SB accounts in the names ofcertainBodies/Organisations

3.1 No bank shall open a savings account in the name ofi. Government departments/bodies depending upon budgetary allocations for performance

of their functions.ii. Municipal corporations or Municipal Committees.iii. Panchayat Samitisiv. State Housing Boardsv. Water and Sewerage/drainage Boardsvi. State text book publishing corporations/societiesvii. Metropolitan development authorities

viii. State/District level housing co-operative societiesix. Any political party orx. Any trading / business / professional concern whether such concern is a

proprietaryor partnership firm or a company or an association.

3.2 For this purpose, political party means an association or body of individualcitizens

of India, which is or is deemed to be registered with the Election Commission ofIndia, as a

political party under the Election Symbols (Reservation and Allotment) Order1968, as inforce for the time being.

3.3 For this purpose, budgetary allocation shall mean the allocation of funds bytheGovernment made through the budget, wherein all the Government s expenditureisreflected. Any institution, irrespective of the fact that it is a GovernmentDepartment, Semi-Government or Quasi-Government Body, which receives grants, loans or

subsidies from theGovernment is said to depend on budgetary allocation. Government grants toinstitutions arein the nature of budgetary allocation. Government s subscription to the sharecapital of theseinstitutions also forms part of the budgetary allocation. Local bodies likeMunicipal Corporations,


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Zilla Parishads, Taluk Panchayats and Gram panchayats are given grants in thenatureof compensation and assignments , which form part of budgetary allocation,although taxescollected by these bodies are not covered under the definition and scope of

budgetary allocationof Central and State Governments.

4.Procedure for opening savings accounts

4.1 KYC proceduresThe prospective account holder should be properly identified as per KYC norms.For

detailed guidelines on Know Your Customer procedures, please refer Chapter 1.

4.2 Application and Specimen Signature CardThe application form (Refer Annexure 4.1) and specimen signature card should beobtained duly signed by the prospective account holders. The details to beobtained in theapplication form are given in Chapter 4 and the instructions given therein should

befollowed. The opening of the account should be authorised by the Manager/AsstManager or

any officer permitted by HO for this purpose ( Refer Para 12 of Chapter 1 ). Twocopies of photographs of the depositors/persons authorised to operate the account should beobtained( Refer Para 10 of Chapter 1 ).

4.3 Initial DepositThe initial deposit for opening an account should be in cash. Opening of anaccount

by cheque should be avoided.

4.4 Minimum Balance4.4.1 The following minimum balances are prescribed for SB accounts4.4.2 In case of pensioners the minimum balance in SB accounts with cheque

facility isRs.250 and without cheque facility there is no need for maintenance ofMinimum balance.


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4.4.3 In case of Students with bonafide certificate, the minimum balance will be Rs. 250 for

accounts with cheque facility and Rs. 100 for accounts without chequefacility .

4.4.4 Where the balance in SB accounts falls below the stipulated minimum, a

servicecharge as prescribed by Head Office shall be levied on each occasion

irrespective of thenumber of days for which the position continues. There is no service

chargesfor pensioners for non-maintenance of minimum balance in SB accounts

withoutcheque facility.

4.4.5 At the time of opening Savings Bank accounts, banks should inform theircustomers

about the requirement of maintaining minimum balance and levying ofcharges, if such

minimum balance is not maintained .4.5 Opening of Accounts

After the initial deposit is paid, the account is opened in the ledger in the serialorder duly indexed and entries made in the Account Opened and Closed

Register. Detailedinstructions on opening of account is given in Chapter 4 of this Manual.

5 Operations in Savings Bank Accounts

5.1 Deposits into the accountsThe minimum amount which can be deposited by way of cash into any savingsaccount is Rs.5. Amounts received for the credit of a savings account shouldordinarily beaccompanied by pay-in-slips with counterfoils. Pay-in-slips should be made outseparatelyfor cash and cheques.

5.2 Withdrawals from the accounts


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5.2.1 Withdrawals are permitted by withdrawal slips, in case of ordinaryaccounts and bycheques, in the case of cheque operated accounts. The withdrawal slips aremarked on the topPass Book must accompany this withdrawal slip . The intention is that, as far as

possible thedepositor himself must come to the branch to withdraw. If the depositor is unableto be

present at the bank due to some inconvenience, he may authorise some other person toreceive money on his behalf. The withdrawal form provides for authorisation (onthe reverse)from the depositor to pay the amount to a named third party who brings thewithdrawal slip.

No withdrawal slip presented through clearing shall be paid; if presented it should bereturned with the reason Pass Book must accompany the withdrawal slip .

5.2.2 The minimum amount which can be withdrawn from a savings account isRs.5. Thenumber of withdrawals in a savings bank account is limited to 50 for each halfyear endingSeptember and March. If the account is opened in the middle of a year, thenumber of permissiblewithdrawals shall be allowed proportionately. When the number of withdrawalsexceeds

50, a service charge as stipulated by Head Office shall be levied for eachtransaction in excessof 50.

5.2.3 Cash withdrawal in a cheque operated SB account shall be allowed throughwithdrawal slips, after observing the following conditions.

i. The facility should be extended, only when the customer comes in personfor the

transaction.

ii. He should bring his passbook.iii. He should be properly identified by following the procedure for

verification ofcustomer s signature and comparison of the photograph available in our

records.iv. The issue of withdrawal slips should be made as per the instructions

contained in paras 5.4 below.


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5.2.4 The maximum amount that can be withdrawan from a Savings Bank accountusing awithdrawal slip is restricted to Rs. 10,000 for cash withdrawals and Rs. 20,000 fortransfer

transactions.

5.2.5 However, these terms may be relaxed by the Branch Manager provided he issatisfiedwith the genuineness of the transaction.

5.3 Payment of savings bank withdrawal form without production of passbookOccasionally, if a withdrawal slip is presented across the counter by the drawer

himself without production of the pass book, the Branch Manager/Officer-in-charge of SBsection can pass it , after taking usual precautions. The branches should maintaina registerin which full particulars of withdrawals in SB accounts by withdrawal slipswithout productionof pass books are entered and orders of the Manager/Officer-in-charge of SBsectionunder full signature for payment obtained. In addition, the withdrawal slip should

be superscribed,Pay, pass book not produced and the Manager/Officer -in-charge of SB sectionshouldsign in full below this.

5.4 Issue of withdrawal slips

5.4.1 The withdrawal slips are serially numbered and supplied in a book form.Thewithdrawal slip book should invariably be given to a customer who maintains a

balance ofless than Rs.250 the first time, when the customer calls at the office for a

withdrawal from hisSB account. At the time of issue of the book, the customer may be requested touse regularlythese forms, for subsequent withdrawals.

5.4.2 The supply of withdrawal slips in loose forms should be made only inexceptionalcircumstances. Depending on the requirements at the branch level, the Branch


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Manager/Officer-in-charge of SB section will place with the SB clerk(s) sufficientnumber ofSB withdrawal books, after entering them in the cheque book issued register to begiven asloose leaves.

5.4.3 When a request is made for a withdrawal slip in loose form, the clerk in theSBdepartment shall note down the account number in the withdrawal slip, afterverifying itfrom the pass book and deliver it to the customer so that he can complete thewithdrawalform and present it for payment.

5.5 Custody of withdrawal slip form

The withdrawal slips being numbered forms, should be held in the custody of anofficer. In order to avoid the public having direct access to them, no withdrawalslip should

be left at the counter. The precautions to be observed in respect of other numbereditemsshould be followed for withdrawal slips also.

5.6 Issue of cheque books

5.6.1 Detailed instructions with regard to issue and custody of cheque books aregiven inPara 14 of Chapter 4. The declaration from the customer to be obtained at the timeof issue offirst cheque book is given as An nexur e 5.2 .

5.6.2 Three cheque books of 20 leaves each shall be issued free of cost in a year.For issueof cheque books beyond the above limit, a charge of Rs.2 per leaf for MICRcheque books andRe.1 per leaf for non-MICR cheque books shall be levied. No charges shall belevied for SBcheque books issued at rural branches. Separate charges are applicable forMulticitycheques.

5.7 Collection of cheques/pensions


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Cheques, Dividend Warrants and other instruments issued in favour of theaccountholder only can be accepted for collection/credit to the account. The bank alsoundertakescollection of pension of behalf of constituents.

5.8 Pass Book

All savings account holders are provided with a pass book. The detailedinstructionswith regard to issue of pass books, entries in the pass book etc., are given in Para11 ofChapter 4.

5.9 Standing Instructions

Standing instructions are accepted in savings account (See Para 10 of Chapter 4).

6. Payment of interest on Savings Bank Accounts

6.1 Interest is paid half-yearly to the SB depositors as per RBI directive.

6.2 Interest is calculated as on every 31st January and 31st July and credited onany day

before 10th February and 10th August respectively. The six monthly productseligible for

interest should be added up and the total products should be arrived at. Interest iscalculatedon monthly products on the minimum balance in the account between 10th andlast day of themonth. The interest so arrived should be rounded off to the nearest rupee. Anaccount is notentitled to interest, unless it earns a minimum of Re.1 as interest per half year.

6.3 At new branches for SB accounts opened between the opening day and thelast day ofthe month after 10th of any month, proportionate interest may be calculated forthe firstmonth on the basis of the minimum balance standing to the credit of the accountduring the

period from the date of opening of the branch or the account which ever is later tothe last dayof that month.


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6.4 Interest for the months of August and September and February and March be provided for on 30th September and 31st March respectively by debitingDepositors Intereston Savings Bank Accounts and credited to Interest Accrued on Savings BankDeposits

Account at 2/6th of the total amount of interest paid for the previous six months.

6.5 As on 31st July and 31st January, interest should be added to individualaccounts inthe ledger and such interest should be taken down in the balance book, alongwith

balance inindividual accounts after adding interest, for preparation of consolidated voucher.Thefollowing vouchers should be passed:

Cr. Savings accounts(for interest as in balance book)

Dr. Interest Accrued on Savings Bank Account(for the balance in the account in General Ledger

Representing Provision previously made for 2 months)

Dr. Depositors Interest on Savings Bank Accounts(for the difference between the above two vouchers)

7. Certificate of Interest Paid

7.1 Where the account holder requests the bank to issue a certificate of interest paidduring the year, it should be issued as per Annexure 7.15.

8. Transfer of Accounts

8.1 Savings accounts are transferable from one branch to another at the request oftheaccount holder. The procedure to be followed is given in Para 36 of Chapter 4.

9. Closing of Accounts

9.1 A letter of request for closing the account as per the Annexure 4.40 shall betakenfrom the account holder. In case of joint accounts, all the joint account holdersshould sign


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the letter of request to close the account. In case of joint accounts on E or S/A orS basis,where the account opening form contains specific mandate to that effect, theaccount may beclosed at the request of any one of the account holders. Instructions to be followed

for closingof accounts is given in Para 38 of Chapter 4.

10. Balancing of Ledgers

10.1 Savings accounts are to be balanced once in a month. For detailedinstructions onBalancing of Ledgers refer Para 34 of Chapter 4.

11. Savings accounts of staff/retired staff members

11.1 Savings Bank accounts of employees and others listed in Para 24 of Chapter7 of thisManual individually or jointly with others are eligible for preferential rate ofinterest at 1%more than the standard rates provided the entire monies belong to the eligible

persons.11.2 While opening SB accounts in the above names, a declaration should be

obtainedfrom the depositor that the amount deposited and/or to be deposited in the accountis/will, beowned by the depositor.

11.3 Staff accounts should be segregated and wherever the number of suchaccountswarrants separate ledger may be maintained for this purpose. To distinguish thecheques ofemployees from others all cheque leaves issued to employees should be affixed

with a rubberstamp Staff . Pay -in-slips, credit vouchers, debit vouchers relating to accounts ofemployeesmust also bear the mark Staff .

11.4 In computerised branches, the software should enable identification of staffaccounts


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and the facilities available in the software should be utilised by the BranchManager/Asst.Branch Manager for the purpose of monitoring/scrutiny of staff accounts.

11.5 The operations put through the staff accounts should be subjected to regular

scrutiny by the Branch Manager/Asst. Branch Manager and it should be verifiedthat theturnover and operations in the account are not disproportionate to the salary anddeclared/known sources of income of the staff concerned. It should also beensured thatoperations in the accounts are restricted to personal transactions only.

11.6 Branch Managers/Asst. Branch Managers should make it a part of their dailydisciplineto go through the vouchers relating to the previous day s transactions in order to

identify any abnormal/fictitious transactions. Such scrutiny would includeverification ofvouchers relating to staff accounts, particularly of inward/outward remittancesmade by wayof Mail Transfer/Demand Drafts/Telegraphic Transfer, large sums, credits otherthan by wayof salary etc., so that the bonafides of these transactions are established withoutdoubt.

11.7 A staff member should not either post or pass credits/withdrawals in his ownaccount. Such transactions must be posted/passed by another staff/competentofficer.

11.8 Branches should report to their Circle Offices immediatelyi. incidents of cheques returned for want of funds or payment stopped in

staffaccounts, as such returns would attract criminal proceedings under

Sec.138 of the Negotiable Instruments Act

ii. any unusual transaction or any undue value/ volume of turnover noticed instaff

accounts

12. Inoperative Savings accounts


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12.1 For all inoperative SB accounts where the balance is Rs.100 or below, aservicecharge of Rs.20 per year should be levied in the month of January every year, atthe time ofcalculation of interest on SB accounts.

12.2 If the balance is insufficient to levy such service charges, the available balance may be debited as service charges and consequently the account may be closed underadvice to thecustomer.

13. `No-Frill Account' - Vikas Savings Khata

13.1 A No-frills Savings Bank Scheme has been introduced to cater to vast

sections of population .The salient features of the scheme are given below:

13.2 Under this scheme, there is no need for the customer to deposit an initialamountwhile opening the account. Similarly, the scheme does not prescribe anyminimum balanceto be maintained. Therefore, the account holder may keep even zero balance in hisaccount.

13.3 The customer shall be subjected to the relaxed KYC procedures only asgiven in Para15 of Chapter 1 of this Manual. Withdrawals can be made, only by using thewithdrawal slipsand no cheque books shall be issued to this category of accounts.13.4 The total number of transactions (both debit and credit put together) isrestricted to10 per month. A transaction charge of Rs. 5/- ( plus service tax) shall be levied foreach transaction beyond the permitted limit.

13.5 The rules and regulations governing Savings Bank accounts like nomination,service charges etc are applicable to this scheme also.

13.6 For availing the value added services offered to other SB accounts like ATMcards,cheque book facility, ICOOC, Insurance schemes, Internet banking , mobile

banking,


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telebanking etc., the account holders of this scheme have to fulfil KYC procedures and theminimum balance requirements as applicable to other/regular SB customers.

13.7 One DD/BPO shall be issued free of commission in a month for these

accounts.

14. Customised Savings Bank Products

14.1 The following customised Savings Bank products have been introduced to providevalue additions for customer retention. The salient features of the products aregiven below

14.2 "SB Silver" (CBS Code - 2111-1581)

14.2.1 Under this scheme, the Savings Bank Account holder has to maintain aminimum

balance of Rs.5000 .

14.2.2 Special Benefitsi. Free Personal Accident Insurance cover for Rs. 1 Lakh (IB Chhatra)

ii. Free issue of 1 DD for a maximum amount of Rs. 5000- per year.

14.2.3 An onetime minimum balance charge of Rs.25 will be levied, if theoutstanding

balance goes below Rs.5000-.14.3 "SB Gold " (CBS Code - 2111-1591)

14.3.1 Under this scheme, the Savings Bank Account holder has to maintain aminimum

balance of Rs.10000.

14.3.2 Special Benefits

i. Free Personal Accident Insurance cover for Rs. 1 Lakh (IB Chhatra)ii. Free issue of a maximum of 2 DDs totalling Rs. 10000- during the year.

14.3.3 In this type of account also, an one-time minimum balance charge of Rs.25will belevied, if the outstanding balance goes below Rs.10, 000-.


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14.4 "SB Platinum" (CBS Code - 2111-1601)

14.4.1 Under this scheme, the Savings Bank account holder has to maintain aminimum

balance of Rs.25000

14.4.2 Special Benefits

i. Free Personal Accident Insurance cover for Rs. 1 Lakh (IB Chhatra)ii. Free issue of a maximum of 4 DDs (one per quarter) totalling Rs. 25000-.

14.4.3 Free Life insurance cover for Rs. 1 Lakh (IB Jeevan Kalyan) is alsoavailable forthose in the age group of 18 to 45 who open this SB account

14.4.4 Multi-city Banking facility shall also be extended to customers of thisaccount as perextant guidelines and subject to recoveryof the prescribed charges.

14.4.5 An one-time minimum balance charge, equivalent to the Insurance premium borne by the Bank, shall be levied, if the outstanding balance goes below Rs.25000.

14.5 Payment of Insurance Premium

14.5.1 Branches shall debit the Expenditure Head 'Insurance (Others)' under (Sub-GL code-1181) for absorbing the premium payable on the Insurance cover extended tothese accounts.,

14.5.2 Branches should ensure that the premiums are promptly paid to therespectiveInsurance Company without any let up in the system.

14.6 Account Opening Forms

14.6.1 The comprehensive account opening form given in Annexure 4.1 shall beused foropening accounts under this categories also. An acknowledgement along with theterms andconditions covering the respective scheme should be given to the account holderimmediately


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on opening the account.

14.6.2 Booklets for the above 3 schemes with relevant annexures are available inall ourCircle Offices for the use of branches.

15. Reporting of High Value Cash Receipts in SB accounts

15.1 As per Sec. 285BA of the Income Tax Act, 1961, branches should submit anannualreturn (An nexure 5.3) relating to cash deposits aggregating to Rs. 10 lakhs ormore in afinancial year in a any savings bank account of a person maintained in our Bank.

15.2 This statement shall be submitted every year before 31st May (with data upto31stMarch) by all branches to the Circle Offices.


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6. Current Accounts

1. Introduction

1.1 Current Account is a form of demand deposit wherefrom withdrawals areallowedany number of times depending upon the balance in the account or upto a

particular agreedamount. Current account especially caters to the needs of business people whomake extensiveuse of the cheque facility and also receive cheques in their favour from others.There is,however, no restriction that only business people should open current accounts.The currentaccount rules of the bank are given in An nexur e 6.1 .

2. Who can open

2.1 A current account may be opened byi. a person in his/her own name;ii. two or more persons in their joint names in any one of the following

forms:

Accounts in the name of Mode of operation

A & B Either or Survivor

A & B Jointly or Survivor