The document discusses various types of joint bank accounts and special customers like minors and illiterate persons. It provides information on joint accounts that can be operated jointly by all account holders, either or survivor where the account can be operated by either person, and former or survivor where the former account holder must operate it while alive. It notes that legal heirs cannot claim funds in a joint account after the death of one account holder depending on the type of joint account. The document also discusses accounts for minors, including who can open one, how they are treated after the minor becomes an adult, and responsibilities of the bank. It provides details on facilities for illiterate customers and nominees for accounts.

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03. SOME SPECIAL TYPES OF CUSTOMERS IN RETAIL BANKING
CASELETS
JOINT ACCOUNTS
Joint account of two or more persons, with the following mode of operation is allowed by the bank:
Either or survivor ( when they trust each other), Former or survivor ( one former wants to control as
long as he is alive), Jointly by both/all ( when both /all want to control and don’t trust each other).
Based on the above information, write your observations for each of the following situation:
1. In the joint account of And B operated jointly, on death of B, balance was paid by the branch
manager to A . Later, legal heirs of B come to claim their share in the joint account. Is their
claim tenable in law?
Answer: no
2. In the joint account of And B operated Either or Survivor basis, on death of B, balance was paid
by the branch manager to A. Later, legal heirs of B come to claim their share in the joint account.
Is their claim tenable in law?
Answer: no
3. In the joint account of And B operated Former or Survivor basis, on death of A , balance was
paid by the branch manager to B. Later, legal heirs of A come to claim their share in the joint
account. Is their claim tenable in law?
Answer: no
4. In account of A and B, operated by either or survivor , Bank receives instructions from B to
revoke the authority of A to operate the account. A issues a cheque next day. Will bank pay the
cheque issued by A ?
Answer: no
5. In account of A and B, operated by Former or survivor , bank receives instructions from B to
revoke the authority of A to operate the account. A issues a cheque next day. Will bank pay the
cheque issued by A ?

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Answer: yes
6. In case of joint account of A and B, operated by either or survivor, the account becomes single
account on death of A. Legal heirs can not dispute with the bank , about the ownership of B
over the funds. Discuss.
Answer:
The reason being that this is the kind of account being operated by only two individuals and if
any one is dead then the whole possession of money in the account goes with the othe account
holder. The legal heirs can only claim the money if the second account holder too is dead
7. A and B have a joint fixed deposit account with mode of operation as Either or survivor. A
requests the bank to make premature payment of fixed deposit amount to him before the due date
of FD due to some exigency and agree for any penalty is levied by the bank for premature
payment. Should the bank pay to A ?
Answer: yes
ACCOUNTS OF MINORS:
A minor is a person who is under 18 years of age (or under 21 years if guardian is appointed
by a court). He /she has a special status in law. Minor is not competent to enter into a contract.
He can bind all other parties except himself. No loan or overdraft is recoverable from him. Once he
is a major, he can operate his own account himself.
8. Which one of the following is not correct:
i. The account can be opened in the name of minor below 12 years under guardianship of natural
guardian or court appointed guardian only and in no other way. (False)
ii. The account can be opened if the age of minor is 12 years as he understands the nature of
transactions he is doing. (True)
iii. Two minors can open a joint account . (True)
iv. On attaining majority, this account is closed and new account is opened with this balance so
that minor who is now major is free to operate. (True)
v. If the minor dies, the father can close the account and take the money from bank. (True)
vi. The bank allowed overdraft to minor inadvertently, bank can recover the amount by filing suit.
(False)
vii. Manager took precaution and took guarantee of a worthy person and gave a loan to a minor.
On default in repayment, bank filed a suit against the minor and guarantor. Can bank recover
loan from the guarantor? (No)

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viii. A minor can not be appointed as an agent to represent his principal as he is not competent to
enter into contracts. Discuss. (false)
Answer:
A minor may be appointed as an agent to act on behalf of his principal. According to
Section 184 of the Indian Contract Act, 1872, "as between the principal and third person
may become an agent; but no person who is not of the age of majority and of sound mind
can be appointed as an agent, so as to be responsible to his principal." Thus a minor agent
cannot be held responsible to his principal. The principal may be held responsible to the
third parities in respects of the acts of his minor agent. Therefore, all of his dealings with
the banker will be valid and binding on his principal. The banker should obtain written
authority of the principal specifying he power and the extent of authority entrusted to the
agent in this regard and should see that the minor-agent does not deal beyond such
delegated powers.
ix. Branch manager allowed to open account under guardianship of the mother of minor who
lives with mother separately . The father is the natural guardian as per law and was still alive.
Discuss.
Answer:
Yes it is possible in the case the mother had taken responsibility to look after the child or if
the father and mother had entered into contract of separation because of indifference between
then mother can act as a guardian even if father is alive
ILLITERATE PERSONS
a. Illiterates can not write and sign, so banks take their thumb impression (left hand thumb for
male and right hand thumb for female). The thumb impression and the Photograph taken on
record must be witnessed by a literate person who should read out and explain the contents of
Account Opening Form to him.
b. Illiterates need to come personally to the bank with S.B. pass book and put thumb impression
in presence of bank officer for proper identification with the photograph on bank record to
withdraw the deposit amount.
FACILITY OF NOMINATION
Banking Companies (Nomination) Rules 1985 permit banks to pay dues to nominees in the event of death

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of depositor(s) without asking for succession certificate or verifying claims of legal heirs. This simplifies
settlement. Of course, the nominee is accountable to legal heirs as a Trustee.
a) Nomination facility available for bank deposits, safe deposit lockers, safe custody articles.
b) There can be only one Nominee for a deposit account whether held singly or jointly.
c) There can be two nominees for a jointly held locker.
d) A person legally empowered to operate a minor's account can file a nomination on behalf of the minor.
9. Under section 45 ZA of the banking laws amendment act.1983, the facility of nomination by
depositors is allowed. Which one of the followings is not correct:
i. It is compulsory to make nomination in favour of some person in a deposit account.. (no)
ii. RBI has instructed the banks recently to tell the customer about availability of nomination
facility, its benefits and ask the customer not availing this facility to write on the AOF
(Account Opening Form) that he does not want to avail nomination facility.
(True)
iii. The facility is available in which of the following deposit accounts: Tick Mark :
a) Single individual’s accounts (yes)
b) joint accounts (yes)
c) minor’s accoun (yes)
d) Proprietorship accounts (yes)
e) HUF account (no)
f) Trust account (no)
g) Company accounts (no)
h) Partnership accounts (no)
iv. The nominee can be a minor also but a name of major will be mentioned to receive the
deposit amount in case of death of depositor if the minor is still a minor at the time of death.
(True)
v. More than one persons can be nominated in one account but their share should be fixed in
advance in the nomination form.
(False)
vi. The nominee is only a person nominated to receive the deposit amount from bank and holds
the money so received in trust for the legal heirs of the deceased who can claim this amount.
(True)

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vii. In case of payment to a nominee on proper identification in the account in the event of death
of the account holder, the bank is discharged from its obligation as a debtor.
(True)
viii. In case the nominee dies, the nomination stands cancelled. The money will not be paid to
legal heirs of nominee but it had to be paid to legal heirs of the account holder.
(True)