bcom iii btp m 3

8/7/2019 Bcom III BTP M 3

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GOOD MORNING


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Special Typesof

Customers


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CUSTOMER:

There is no statutory definition of the term

customer of a bank, that means the term

customer of a bank is not defined by law.

Ordinarily, a person who has an account in a

bank is considered its customer. In otherwords, the term customer of a bank

means a person who has an account with

the bank.


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To know the clear definition of a customer,

we have to depend open the views ofauthorities on banking as well as on the

judgments of the courts of law.

In the case of Great Western Railway co. vs.

London Country Banking co. ltd., it was

held that a customer is a person who has

some sort of account either deposit or

current or some similar relation with the

banker.


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Minors

Married Women Illiterate Persons

Drunkards

Joint Account Holders Joint Hindu Family

Partnership Firms

Joint Stock Companies

Societies, Clubs & Charitable Institutions

etc.


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MINORS

Who isa Minor:

According to section 3 of the Indian Majority

Act, 1875- A minor is a person who hasnot completed the age of 18 years.

In case, guardian appointed to protect theproperty of a minor- court of wards-

minority is extended up to age of 21 years.


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Nature of Minors Contract:

According to section 11 of the Indian

Contract Act, 1872- a minor is not

competent to enter into a valid contractand hence all contracts entered into by

him (except those for the supply of

necessaries of life to him and to hisdependents) are void i.e. not enforceable

by law.


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Precautions by the Banker:

1) Not to open current account.

2) Opening of an account: Precautions- Age of discretion 12 years.

Read and write English, Hindi and any

regional language. Credit balance of the account.

Loans and Advances to the minor.


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Banker should not discount cheques,

bills drawn or endorsed by him or forhim.

No overdraw facility.

Security by the minor property.

3) Natural or Legal Guardian.

4) Death of a minor or guardian.

5) Minor as an agent.

6) Minor as a partner.


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Guardianship ofa Minor:

There are three types of Guardians-

1. Natural Guardian- Father orMother

section 6 of the HMG Act, 1956.

2. Testamentary Guardian- Guardian

appointed by parents.

3. Guardian appointed by the Court-

Guardians and Wards Act, 1890.


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DRUNKARDS

Intoxicated persons.

Is a person who is so intoxicated that he is

incapable of understanding the nature andthe effects of a contract upon his interests.

According to section -12 of the ICA,1872-A contract entered into by a drunkard is

void.


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Precautions:

The banker should not open an account inthe name of a person who is fully drunken.

The banker should not deal with a fully

drunken person in any way and should notget documents executed by such a

person.

It is advisable for the banker to take the

signature of some witnesses when he is

required to deal with him and executed

some documents.


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ILLITERATE PERSONS

An illiterate person is a person who doesnot know to read and write.

He can enter into a valid contract.

But, bankers point of view, he has to face

certain difficulties while dealing withilliterate person.


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Precautions:

He should take his/her thumb impression

in the presence of two witnesses.

He should obtain the recent photograph of

illiterate customer duly attested.

He should see that the illiterate customer

should attend personally for withdrawals.


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MARRIED WOMEN

Married women is competent to enter intoa valid contract.

She enjoys all contractual rights accordingto law.

She can acquire and sell her property,lend or borrow and enter into contracts

and bind her own property called

STRIDHAN.


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She is entitled to draw and endorse

cheques and the banker can make

payments for her cheques.

The banker runs no risk as long as her

account shows credit balance.


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However, the banker runs the risk when

he grants an OD or loan or advances toa MW who

1. Has no personal property or

2. Such personal property is settled uponher in such a way that she should use

only the income from that property.

She cannot, by her dealings, bind her

husband.


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Precautions:

He may permit her to operate her

account as long as her account shows a

credit balance. He should be cautious and judicious

while granting loans or advances or OD

facilities toM

W. He cannot bind her husband liable for the

debts of the MW, except under two

situations:


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1) Such debts are raised with the consent of

her husband and

2) Such debts are raised by her for the

supply of necessaries of life for her or for

her family in case her husband makes a

default in supplying the same to her.


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JOINT ACCOUNT

It is an account which is opened by two or

more persons jointly.

For the sake of convenience.


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Precautions:

JA must be signed by all the persons.

Persons must be competent to enter intovalid contract.

Banker should obtain clear instructions inwriting- who will operate the JA.

JA holder (who operate the JA) cannothimself appoint an agent or attorney.


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Any member of a JA can countermand thepayment.

Banker should get a mandate duly signedby all the JA holders in case of loan or

advances or OD facilities on the JA.

Authorized person to operate the JA can

be revoked by anyJA-holder.

Banker should get clear instructions fromall the JA-holders regarding securities of

JA.


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Alterations in the cheques must bear the

signature/s of the drawer/s.

Banker should get clear instructions in

writing from all theJA-holders in case of

1. Death of any JA-holder

2. Insolvency of anyJA-holder

3. Insane of any JA-holder.


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JOINT HINDU FAMILY

It refers to an undivided Hindu family which

id composed of all the male members

lineally descended from a commonancestor for three generations, namely,

the sons, grand-sons and great grand-

sons, and their wives, unmarried

daughters and other relatives.


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The JHF business is governed by theprovisions of the Hindu Law i.e. Mitakshar

School of Hindu Law.

JHF business is managed by the eldest

male member of the family called the

KARTA.


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Precautions:

Account opening form obtain the names

and signatures major coparceners.

M

inor partners names and their date ofbirth and names and signatures of their

guardians.

Obtain title of the family business and

names of the coparceners authorized to

operate the account.

Loan or an advance forJHF Karta.


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PARTNERSHIP FIRM

According to Section 4 of the Indian

Partnership Act, 1932

The relation between persons who have

agreed to share the profits of a business

carried on by all or any of them acting for

all.


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Precautions:

Partnership Deed.

Partnership letter in the absence of

Partnership Deed. Opening of the account only in the name

of the firm section 19(2) of Partnership

Act.

Authorized to operate the account.

Funds of the firm.


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OD facility.

Retirement of a partner.

Death of a partner. Insolvency of a partner.

Right to set-off Banker has no right,

unless with written consent of all partners.


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JOINT STOCK COMPANY (PLC)

It is an association of persons registeredunder the Companies Act with a common

capital contributed by its members for

pursuing a common purpose or cause.

It is an artificial and intangible person.

Body corporate with common seal andperpetual succession.


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Precautions:

Examination ofDocuments

Certificate of Incorporation. Certificate of Commencement of Business.

Memorandum of Association.

Articles of Association. Copies of Annual Accounts etc.


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Copy of the Boards Resolution.

Borrowings Powers of the Company. Directors Personal Accounts.


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SOCIETIES, CLUBS &

CHARITABLE INSTITUTIONS

Societies, clubs, charitable and religious

institutions, libraries, schools & colleges,hospitals etc. not engaged in trading

activities also open and operate their

accounts in banks.


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Precautions:

Society must be incorporated.

Rules and By-laws of the society.

Resolution of the Managing Committee. Power to Borrow.

Societys Accounts and Personal

Accounts.