Opening procedure of Various types of Mudaraba and Al-Wadiah Savings Account and Closing of Accounts

Account opening is the fundamental task for a Bank. A person or any legal entity may open an account with some procedures and rules. Islami banks mobilize deposit through application of the following two principles of Shariah:

1) Al-Wadiah

2) Mudaraba

The two principles are discussed below:

Al-Wadiah

Al-Wadiah principles imply that the bank will receive funds from customers through their deposits and will use those funds for the benefit and at the risk of the bank, but bank is bound to provide demands to the owner of the account at anytime without sharing any profit or loss.

Mudaraba

Mudarab is a form of business contract where one party supplies money to the account and the other uses the money for business or other task. The supplier of the money is called Shahib-al-Maal and the other person who does business with the money is called Mudarib. In Mudaraba the bank receive deposits from the suppliers and the bank will have exclusive right to manage the fund and the profit resulting from such deposits will be shared between the bank and the depositor(s) at a pre-agreed negligence of the bank or any of its representative, will be borne by the depositors. Saving bank accounts, short Notice Deposit and Various Term & Scheme Deposits of Islami banks are conducted on this principle.

The following are the discussion of the various types of Account openings.

(a) Account opening procedure in the individual Name-

To open bank account in the name of individual the following procedures are needed to be followed:

1. To fill up and sign the Account opening form.
2. To duly sign the specimen signature card.
3. Photographs of the opener should be attested.
4. Account holder has to attest the photograph of the Nominee.
5. Photocopy of passport/National ID card/Driving License/Certificate of Employer/Certificate of Union Parishad Chairman/Poura Commission etc. of the account holder.
6. To submit TIN certificate (if available)
7. To fill up the KYC (know Your Customer) and TP (Transaction Profile).

(b) Account opening procedure in the joint name:

To open joint bank account the following papers procedures are followed:

1. To fill up and sign the Account opening form.
2. To duly sign the specimen signature card.
3. Photographs of the opener should be attested.
4. Account holder has to attest the photograph of the Nominee.
5. Photocopy of passport/National ID card/Driving License/Certificate of Employer/Certificate of Union Parishad Chairman/Poura Commission etc. of the account holder.
6. To submit TIN certificate (if available).
7. To fill up the KYC (know Your Customer) and TP (Transaction Profile).

(c) Account opening procedure in the name of a Minor:

Account in the name of Minor can be opened by the procedure of individual account which will be operated by the natural guardian (Father/Mother) or by the legal guardian appointed by the court. The title of the account must indicate that the account holder is a Minor mentioning the date of birth. The Minor account will be handled by the guardian.

(d) Account opening procedure in the name of Sole Proprietorship Concern:

To open bank account in the name of Sole Proprietorship Concern the following procedures are followed:

1. To fill up and sign the Account opening form and sealed.
2. To duly sign the specimen signature card.
3. Photographs of the Proprietor should be attested.
4. Account holder has to attest the photograph of the Nominee.
5. Photocopy of passport/National ID card/Driving License/Certificate of Employer/Certificate of Union Parishad Chairman/Poura Commission etc. of the Proprietor.
6. To submit TIN certificate.
7. To submit photocopy of Up to date Trade License.
8. To fill up the KYC (know Your Customer) and TP (Transaction Profile).

(e) Account opening procedure in the name of Partnership Concern:

To open bank account in the name of Partnership Concern the following procedures are followed:

1. To fill up and sign the Account opening form and sealed.

2. To duly sign the specimen signature card.

3. Photographs of the Partners/Signatories should be attested.

4. Partners/Signatories have to attest the photograph of the Nominee.

5. Photocopy of passport/National ID card/Driving License/Certificate of Employer/Certificate of Union Parishad Chairman/Poura Commission etc. of the Partners/Signatories.

6. To submit TIN certificate.

7. To submit photocopy of Up to date Trade License.

8. To submit copy of Partnership Deed.

9. To submit list of partners with their address and phone numbers.

10. Exact of resolution of the partners for opening the bank account and authorization for the partners for opening the bank account and authorization for its operation signed by all partners. Care should be taken to see that the adopted resolution does not clash with the relevant clause of the partnership Deed.

11. To fill up the KYC (know Your Customer) and TP (Transaction Profile).

(f) Account opening procedure in the name of Private & Limited Company:

To open bank account in the name of Private & Limited Company the following procedures are followed:

1. To fill up and sign the Account opening form and sealed.

2. To duly sign the specimen signature card.

3. Photographs of the Directors/Signatories should be attested.

4. Photocopy of passport/National ID card/Driving License/Certificate of Employer/Certificate of Union Parishad Chairman/Poura Commission etc. of the Directors/Signatories.

5. To submit TIN certificate of the company.

6. To submit photocopy of Up to date Trade License.

7. To submit true copy of Memorandum and Articles of Association.

8. To submit true copy of Certificate of Incorporation.

9. To submit certified true copy of Certificate of Commencement of Business of the company is case of public Limited Company.

10. To submit the latest list of partners with their address and phone numbers.

11. Exact of resolution of the partners for opening the bank account and authorization for the partners for opening the bank account and authorization for its operation signed by all partners. Care should be taken to see that the adopted resolution does not clash with the relevant clause of the Articles of Association.

12. To fill up the KYC (know Your Customer) and TP (Transaction Profile).

With due introduction and after receiving initial deposit preferably by cash all accounts should be opened. It should be opened after fully confirmed the genuinely of information of the customer. Manager/operation Manger of the branch must have to permit to open an account. Signatures of the account holders/Authorised signatories should be duly admitted/verified by the authorized branch officials. TP or Transaction profile should be commensurate with the declared source of fund/occupation/sales of business of the account holder. Letter of thanks should be sent to the account holder address which will help to verify his address and to be pleased by the account holder.

Closing Bank Accounts

A request letter of the account holder should be received to close the mudaraba savings deposit, Al-Wadiah current Deposit and Mudarab short Notice Deposit. The signature in the request letter of the account holder must be verified and unused cheques must be collected from the account holder. Besides, prior clearance should be obtained from the Investment & Foreign Trade Department of the branch before closing the Account. And also before closing the account, remunerative accounts should be applied with profit. Having done that balance amount should be paid to the account holder through payment order or through cash Debit Voucher.