DEPOSIT SCHEMES
DIFFERENT TYPES OF ACCOUNTS
Saving Accounts
Deposit Accounts
Social Security Schemes
Saving Account
Saving Bank accounts, as the very name suggests, are intended for saving for the future. This is the most common type of account which caters to the needs of vast section of people in the society. These accounts promote savings habit of people. Balances in this type of account earn interest by the depositor. This account is a form of demand deposit account. It includes both the categories of savings accounts, viz., savings accounts with cheque book facility and savings accounts without cheque book facility.
WHO CAN OPEN SAVING BANK ACCOUNT
Individual
Saving bank account can be opened by the followings.
i. Single person in his own name.
ii. Two or more person’s in their joint names to be operated in the following manner.
- Either or Survivor
- Jointly/ Jointly or Survivor
- Any one or Survivors or Survivor
- Former or Survivour
illiterate/blind persons
Club, Societies, Association
H.U.F Executor/Administrator
Minor account
Minor accounts in the bank can be opened and operated in two ways i.e. either operated by minor himself/herself or operated by the guardian of minor.
RBI has permitted that a minor who is above the age of 12 and who can understand the operations of the account and is literate (school going) can open and operated saving bank account in his/her own name. Such account can also be opened by two minors jointly with joint operations only. No overdraft is allowed in this account.
Bank can also open a saving bank account in the name of minor by his guardian either jointly with the minor or singly to be operated upon by the guardian. Guardian can either be a natural guardian or as appointed by the competent court.
Institutions which are eligible to open saving bank account
In terms of RBI directive, saving bank accounts opened in the name of any trading or business concern, whether such concern is a proprietary or a partnership firm, a company or an association, would not be eligible for any interest. The RBI, however, has exempted certain agencies/institutions from this prohibition on account of their activities aiming towards service of the weaker sections of society. Accordingly, the following institutions/ organisations are eligible for earning interest on their saving bank accounts on the usual terms:
i. Primary Cooperative Credit Societies.
ii. Small Farmer Development Agency (SFDA)
iii. Marginal Farmer and Agri-Labour Agency (MFAL)
iv. Drought Prone Area Programme (DPAP)
v. Agricultural Produce Market Committee
vi. District Rural Development Agency (DRDA)
vii. Fish Farmer Development Agency (FFDA)
viii. District Development Authority (DDA)
ix. Integrated Rural Development Programme (IRDP)
x. Integrated Tribal Development Agency (ITDA)
xi. Khadi and Village Industries Board (KVIB)
xii. Societies registered under the Societies Registration Act 1860 or any other corresponding law in force in a state or a Union Territory.
xiii. Institution other than those listed below under head “Institutions which are not eligible to saving bank account” and whose entire income is exempted from payment of Income Tax under the Income Tax Act 1961.
xiv. Companies under Companies Act 1956, which have been licensed by Central Government under Section 25 of the said Act, or under the corresponding provisions in the Indian Companies Act, 1913 and permitted not to add to their names word “Limited” or “Private Limited”.
xv. Any other institution permitted by the RBI from time to time.
Institutions which are not eligible to Saving Bank account
RBI has issued directive that Government/Semi Government/Quasi Government departments, local bodies and certain other organisations engaged in public utility services i.e. State Housing Board, State Electricity Board, Water and Sewerage Board should not be allowed to open a saving bank account, if these institutions are depending on the budgetary allocation for their activities. Budgetary allocation means the allocation of funds by the government made through the budget. Any institution which receives grant, loans or subsidies from the government is said to be depending on budgetary allocation. So following institutions are prohibited to open saving bank account for interest purpose.
i. Municipal Corporation/Committee
ii. Gram Panchayat
iii. State Housing Board
iv. State Electricity Board
v. Water and Sewerage/Drainage Board
vi. Industrial Development Board
vii. State Text Book Publishing Corporation/Societies
viii. State/District Level Housing Cooperative Societies
Banks should not maintain ever “interest free” saving bank accounts of ineligible entities.
CLOSING OF ACCOUNT
Saving bank account of a customer can be closed on the written request of the customer. The signature(s) of the customer(s) in the letter of request must be verified with the specimen signature.
Passbook and unused cheque book must be obtained from the customer intended to close the account. A declaration must be obtained from him confirming that no cheque issued by him are yet to be presented for payment.
In case the account is closed before expiry of six month from the date of opening of the account, service charges as specified by the head office shall be levied and credited to commission account. However, service charges shall be exempted in the following cases:
i. Where account is closed for transferring the same to another branch.
ii. Where account is closed to open another account in joint names.
iii. Where account is closed transfer of amount to another account i.e. fixed deposit, long term deposit etc.
iv. Where account is closed due to the death of customer.
In the case of joint accounts, all the joint account holders should sign the request letter for closing the account. In respect of a joint account where one of the joint account holders expires, the account can be closed by obtaining discharge for the balance amount in the amount, from the surviving depositors. If one of the surviving depositors is a minor or where the only surviving depositor is a minor, such an account can be closed by obtaining a discharge from the guardian on behalf of the minor.
Obtention of unused cheques
The unused cheque leaves returned by the customer in respect of closed/transferred accounts should not be issued even as loose cheque leaves to other customers but they should be cancelled and attached with vouchers. A certificate to the effect that ‘the unused cheque leaves Nos. from …………. To ………. have been obtained and cancelled’ is to be incorporated in the ledger duly signed by the passing officer.
