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Types Of Customers and Nature of Accounts

Types Of Accounts
1. Saving Account- A Savings bank account is the most common operating account for individuals and others for non-commercial transactions. A Savings account helps people to put through day-to-day banking transactions besides earning some return on the savings made.

Banks generally put some ceilings on the total number of withdrawals permitted during specific time periods. Banks also stipulate certain minimum balance to be maintained in savings accounts. Normally a higher minimum balance is stipulated in cheque operated accounts as compared to non-cheque operated accounts.

2. TIME DEPOSITS

Time deposits are deposits accepted by banks for a specified period of time. In terms of RBI directives the minimum period for which term deposits can be accepted is 15 days. The banks generally do not accept deposits for periods longer than 10 years.

Banks pay interest on term deposits based on the period of deposits and normally pay higher interest for longer term deposits.

Banks have full discretion to fix their interest rates on deposits and these rates are varied from time to time depending on market conditions. Banks are allowed to levy a penalty for premature encashment of deposits at their discretion. Banks generally pay interest on such deposits as applicable for the period which deposit has been kept with the bank.

3. CURRENT ACCOUNT

Current accounts are cheque operated accounts maintained for mainly business purposes.
Unlike savings bank account no limits are fixed by banks on the number of transactions permitted in the Account.

Banks generally insist on a higher minimum balance to be maintained in current account. Considering the large number of transactions in the account and volatile nature of balances maintained overnight banks generally levy certain service charges for operating a Current account.

Process of opening a account


The Bank will provide with details of various types of accounts that you may open with the Bank. You can have your choice on what type of account would best suit you, based on your needs and requirements The Bank will, prior to opening an account, require documentation and information as prescribed by the "Know Your Customer" (KYC) guidelines issued by RBI and or such other norms or procedures adopted by the Bank prior to opening the account.

The due diligence process that the Bank would follow, will involve providing documentation verifying your identity, verifying your address, and information on your occupation or business and source of funds. As part of the due diligence process the Bank may also require an introduction from a person acceptable to the Bank if they so deem necessary and will need your recent photographs.

The Bank is required by law to obtain Permanent Account Number (PAN) or, where you do not possess such registration, declaration in Form No. 60 or 61( no PAN card and income greater than Rs. 190000) as specified under the Income Tax Rules. In the event that the account opening process is likely to take longer than normal, the Bank will inform you of the revised timeline.

In the event that the account opening process is likely to take longer than normal, the Bank will inform you of the revised timeline.. The Bank will provide you with the account opening forms and other relevant material to enable you open the account. Bank personnel will advise you on the complete details of information that would be required by the Bank for the verification process. The Bank reserves the right, at its sole discretion, to open any account and at such terms as the Bank may prescribe from time to time

After the above formalities are over, the applicant deposits the initial amount and the banker opens an account in the name of the applicant. Generally, the minimum amount to be deposited varies from bank to bank. At present many banks accept an initial deposit of Rs. 500/- for opening a new account.

DEPOSIT SCHEMES FOR INDIAN ABROAD


1. Foreign currency Non-Resident Account Deposit Scheme- In case of this scheme term deposits from non residents Indians are accepted in foreign currency. 2.Non-Resident(External) Rupee account Deposit scheme- In case of this scheme deposits can be held by NRIs in savings, current or fixed deposits in rupees with Indian banks.

3. Non-Resident Ordinary Account Deposit Scheme- In case of this scheme, deposits can be made by the NRIs with banks in India in the form of savings, current, recurring or fixed deposits.

DORMANT ACCOUNTS
If no transaction i.e. credit or debit other than crediting of periodic interest or debiting of service charges , takes place in savings account for more than 12 months, the account becomes inactive and if the period exceeds 24 months the account is declared dormant or inoperative.

The exact period after which a bank is declared inactive or dormant varies from one bank to another. For instance, ICICI Bank declares an account inactive after 15 months and dormant after 18 months. Punjab National Bank on the other hand, declare it as dormant after just six and three months respectively.

Once an account turns dormant, the number of restrictions increases even further. You cant request that a cheque book be issued, the address be changed, the signature be modified, a joint holder be added or deleted, or an ATM/debit card be renewed. You will also not be able to withdraw money from an ATM or carry out any transaction either through internet banking or a branch of the bank.

However, even after your account turns inactive or dormant, interest is still credited to your saving account regularly. And if a fixed deposit receipt matures and you dont withdraw the proceeds, the amount left unclaimed in the saving account will attract the rate of interest applicable to this account.