Bank Account Opening/Closing, Lapses, Precaution and Remedy

Common consideration for opening accounts
1. The law of contract governs opening of accounts. Contract between the bank and the customer. Account Opening forms when signed, contract is executed.
2. Any adult person of Bangladesh national can open account with the bank.
3. Minor cannot enter into contract except for the necessaries of life and under certain special circumstances. Natural/Legal guardians can open account in the name of the minor.
4. Insolvent and mentally unsound person can not execute any contract hence can not open account.
5. Proposed account holder must remain present at the time of opening of the account and he must sign on the account opening form and specimen signature card in presence of the Manager/Authorized officer.
6. Photograph of the account holder must be obtained (except for FDR account). The introducer must attest photograph of the account holder.
7. The account holder must be properly introduced (except for FDR account).
8. Recording of nominee has been made compulsory in case of any account in the name of individual. Photograph and signature of the nominee are to be obtained and the account holder must attest the same.
9. Branch Manager must open the account or accord permission in writing to open the account by the authorized official.
10. Certificate from the local Chairman/Member of the Union Parishad/Municipal Corporation or from any respectable person acceptable to the bank.
11. Copy of Passport, if available.
12. Certificate relating to date of birth of the account holder.
13. Certificate of the Employer in case of service holder.

Papers to be obtained for opening accounts.
Common for all accounts.
1. Account Opening Form : Duly filled in and signed by the account holder.
2. Photograph of the account holder : Duly attested by the introducer.
3. Nominee — Photograph and signature of the nominee duly attested by the account holder.
4. Standing Instruction, if any.
5. KYC given by Bangladesh Bank must be followed meticulously.
6. Different related certificates.


Introducer of the accounts.
1. Satisfactorily conducted account holder of the branch. 2. Dormant/Inoperative account holder must not be allowed to introduce a new account holder. 3. Elite, responsible person of the locality may be introducer, if acceptable to the bank. 4. Signature of the Introducer must be verified before opening of the account.

Letter of Thanks
1. Letter of thanks is to be sent both to the account holder and also to the introducer under registered post with A/D.
2. Acknowledgement to be preserved with the account opening form for future use.
3. In case such letter is returned undelivered, proper investigation to be made to set the thing in right shape.

Specimen Signatures of the account holders.
Specimen signatures are usually kept in Signature Cabinet under supervision of the authorized official. This Signature Box must be kept in the Strong Room overnight under proper lock and key. The Signature Box must not be allowed to be handled by any unauthorized person.

Dormant / Inoperative Accounts
Operation in the Dormant / Inoperative accounts must be handled directly by the Branch Incumbent personally.

Current Account : Dormant - If not operated for 6(six) months. To be scrutinized at the end of each quarter for proper marking.
Inoperative — If not operated for 2(two) years. To be scrutinized in December, each year for proper marking/transfer.

Savings Account : Dormant - If not operated for 12(twelve) months. To be scrutinized at the end of each quarter for proper marking.
Inoperative — If not operated for 2(two) years. To be scrutinized in December, each year for proper marking/transfer.

Account Transfer In/Out
Proper care must be exercised while transferring any account to other branch similarly when any account is transferred-in from other branch.
1. All such transfer cases must be brought to the knowledge of the Branch Manger.
2. Signature of the account holder on the application to be verified and the reason for transfer to be examined.
3. Unused cheques to be received back from the account holder before any such transfer.


Closing of Accounts by the account holders
1. Application of the Account Holder is to be obtained stating reason of the closing.
2. Signature of the Account holder to be verified.
3. Permission of BM to be obtained on the application.
4. Unused cheques to be surrendered by the account holder and to be destroyed by the Branch Manager keeping proper record.
5. Related charges/commission to be realized.
6. Closing balance to be paid to the account holder by the cheque drawn by the account holder or by a Payment Order.
7. Account Opening Forms, Specimen Signature Card and other related papers to be marked "CLOSED" and to be filed separately for record.


Closing of Accounts by the Bank
1. When the account holder is not desirable to the bank.
2. When the account holder is convicted for fraud/forgeries in the court of law.
3. When the account holder is found habitual to draw cheques without prior arranging fund there- against.
4. When bank considers that the concerned account is not remunerative.
5. Any other reason considered fit/justified by the bank.

The account holder must be given prior notice to close the account giving sufficient time for the purpose. The unused cheques must be collected from the account holder and to be destroyed keeping proper record.

Death, Insolvency or Lunacy of any account holder
1. In case of any information regarding death, insolvency or lunacy of any account holder, payment from the account must be stopped.
2. All such matters must be handled directly by the BM on the merit of the situation.

For School, College, Club, Society
1. Names of the members of the Executive Committee.
2. By-Laws/Constitution of the organization.
3. Resolution for opening/operation of the account in conformity with the by-laws.

Accounts of illiterate person - against LTI.
• 3(three) Photographs to be obtained — one with account opening form, one with LTI Card, one with the pass-book.
• LTI of the illiterate person must be obtained in presence of the BM/Authorized official and to be authenticated under full signature of the BM/Authorized official.
• The account holder must come personally against each drawing from the account.
• Account holder must be identified by the BM/Authorized official from the photograph each time and his/her LTI must be authenticated on the cheque.


Accounts in the name of Minors
• No account should be opened in the name of or on behalf of a minor without reference to the Head Office unless a guardian of the property of the minor have been appointed under the Guardian and Wards Act. In such cases account should be opened in the style: X a minor by his Guardian Z.
• The guardian must not be allowed to draw on the account after the minor has become of age nor after his death.
• A minor will attain majority at the age of 21 (twenty one) when a) a guardian has been appointed by the court. b) his property is under the superintendence of a Court of Wards. In other cases minority ceases at the age of 18 (eighteen).
• A minor should not be allowed an overdraft without proper approval of Head Office which may be subject to sanction of the Court.
• The heading of Minor Account: Mr. (Guardian) and (Minor). Payable to either or survivor.
• The date of birth and the date of attaining majority to be recorded in the Form.
• In case of death of the guardian, the money will automatically become payable to the minor but precaution must be exercised prior payment and witness should be obtained.
• In case the guardian is appointed by the court, on the death of the guardian, the minor will again have to apply to the court for payment of the money.
• Certified copy of Court's order should be filed along with the account opening form.

Accounts in the name of Blind Persons:
• The blind persons are competent to contract and therefore are authorized to open accounts in the banks
• Proper introduction to be obtained.
• The banks should encourage the blind persons to open joint account with a normal person who can operate the account.
• A blind person can also appoint agent to operate his account and in that case, the rules relating to operation of account by the agent are applicable to the accounts.

Pardanashin Ladies (Hezab/Nekab wearing Ladies)
• Due care must be exercised while opening current account of pardanashin ladies as the onus of proving that a pardanashin Bangladeshi lady thoroughly comprehended and deliberately of her free will carried out the transactions lies with the other party to it.
• Accounts may be opened only in special cases when the lady is known to be educated and of good social standing and after the Manager is fully satisfied about the applicant's bonafide.

Lapses in opening of accounts.
Violation of the rules/practice, whether it is willful or oversight is termed as lapses. Ignorance is no excuse in the eye of law. Everybody connected with opening of accounts must be conversant of the related rules/practice.


Common lapses are : 1. Photographs are not obtained. 2. Proper introduction is not obtained. 3. Introducer is not suitable/acceptable as per rules/practice. 4. Letter of thanks not sent to the account holder/ introducer. 5. Acknowledgement of the letter of thanks not preserved properly. 6. Proper address of the account holder is not obtained and the address is not verified in spite of sufficient ground for verification.

Precaution while opening an account
We should always bear in mind that "Prevention is always better than cure." Every officials connected in opening/handling of the accounts must be well conversant of the laws and rules in the matter. Head Office Circulars, Instruction, Bank Book of Instruction (BBI) regarding opening of the accounts must be followed meticulously with due care and responsibility for the personal interest of the official concerned as well as greater interest of the Bank.

Special attention to be given on the following points
1. Photographs must be attested by the introducer to be ensured.
2. Photograph to be affixed on the Account Opening Form and that on the Specimen Signature Card in such a way that the branch's round seal and signature of the authenticating official cover both part of the photo and that of the Form/Card.
3. Introducer must be acceptable to the bank as per norms.
4. Account holder must remain present before the authorized officials at the time of opening the account and must sign on the Account Opening Form, Specimen Signature Card in presence of the authorized official.
5. The BM/Authorized officials must authenticate specimen signatures.
6. Number of specimen signature to be recorded on the card in red ink to restrict unauthorized inclusion of any fraudulent signature therein.
7. Rules relating to issuance of cheque book must be followed meticulously.
8. Periodical segregation/marking of accounts as to Dormant/Inoperative to be ensured. First withdrawal from such accounts must be attended properly to the satisfaction of the bank.
9. Standing Instruction of the customers to be diarized for timely execution.
10. Closing of accounts to be handled properly.

Remedy for the lapses
Whether the lapses are considered as an omission or commission, proper steps to be taken to set the things in right shape.
1. If any documents/papers are found not obtained/short, the same is to obtained without any further delay.
2. In case of any fraudulent activity, the operation in the account to be stopped.
3. The matter to be referred to the Head Office/Controlling Office immediately if the situation is beyond the control of the branch.
4. In case of any legal complication/criminal offence, the matter to be referred to the local Police Authority taking prior permission from Head Office/Controlling Office.

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