MOP (Individual).pptx

Banking

1. Ne X t Gen Banker’s PG Diploma Course in Banking and Finance Topic – Mode of Operations By – Avik Ghosh

2. What is Mode of Operation? The primary relationship between a bank and its customer is that of a debtor- creditor, various other relationships also arise out of the other functions performed by the bank. Banks are required to ascertain the capacity to contract of the persons opening bank accounts and also adhere to various legal provisions that apply to various categories of customers in the matter of opening and operation of the bank account.

3. Single/Self When an account opened in name of a single individual. Only the account holder can instruct the bank issue of cheques, withdrawal and transfer of funds, modifications in personal data etc. Close relatives like father, parents, children are also treated as third parties. Banks generally insist customer providing nominee. A proprietorship’s CA will be under a single operation. Cheques will be signed by the account holder himself.

4. Jointly Joint account are opened for two or more persons. The mode of operation is by all the account holders. Account Opening Form is required to be completed and signed by all the joint account holders. All the account holders will have to sign for the financial and non-financial transactions in the account.

5. Either or Survivor When joint accounts are opened by two persons only. Operated by any of the account holders independently. When it is “E” or “S”, there is no need to appoint a nominee to the account. As if anyone dies the Survivor can continue the account.

6. Anyone or Survivor Somewhat similar to “E” or “S”. In “E” or “S” there are only two person involved. Whereas in the Anyone or Survivorship account, there can be more than two person. Anyone can operated the account. If a person is deceased the survivors will continued using the account.

7. Former or Survivor The former(primary account holder/the first holder) will operate the account as long as he is alive. When he expires, the Survivor becomes active and continues using the account or survival benefits are paid. The former can only operate the account during his/her lifetime and the survivor will be allowed to operate the account only after the death of the “former”.

8. Minor Account Minor above 10 years are given mode of operation as operated by minor. Minor’s Account operated by a Guardian.

9. Power of Attorney Holder Account holder may authorize another person to operate the account of his/her behalf. Such mode of operations is more common for Non-resident Indians or current accounts.