Deposits & Advances

amdprasad, ssim, hyderabad

Relationship

Deposits – Banker is a Debtor & The Depositor is

Creditor Advances – Banker is the Creditor & The Borrower

is the Debtor

Classification of Deposits

Demand / Short Term Deposits Time / Long Term Deposits

Savings Account Current Accounts Fixed Deposits Recurring Deposits

Savings Account It is useful for small money deposits (minimum

deposit is fixed ) No fixed term of deposit Day to Day operations Operations permitted through a cheque or

withdrawal form Passbook must accompany the withdrawal form ATM / Debit cards are allowed Interest will be paid as fixed by RBI Presently 3.5%pa Interest on the minimum balance between 10th

to Last working day of the month

Savings Account Minimum Balance to be maintained Penalty for not maintaining minimum

balance Transactions are restricted to 150 pa (Not

practiced) Cheque book charges are applicable Transfer of deposit is possible Joint Deposit is possible Joint with minor not allowed Special minor is permitted – no cheque

book Nomination is available

Current Account Useful for Business entities No fixed term of deposit Day to Day operations Operations permitted through cheques only ATM / Debit cards are allowed Minimum Balance to be maintained Penalty for not maintaining minimum balance Unlimited Transactions are allowed Cheque book charges are applicable Transfer of deposit is possible BCTT applicable for Rs. 1.00 lac and above cash

transaction Nomination is available

Term Deposits Fixed Term Fixed amount Interest is fixed as per the term of the deposit No operations Loan facility is available against lien on the

deposit Cumulative deposit / interest payment

deposits are available Premature cancellation is subject to penalty TDS is applicable Nomination is available Transfer of deposit is possible –with in the

bank only

Recurring Deposit Fixed Term Fixed monthly installment amount Interest is fixed as per the term of the deposit Accumulated installments and interest is payable on

maturity Deposit Passbook will be issued No operations Premature cancellation is subject to penalty Loan will be available against lien on deposit TDS is applicable Nomination is available Transfer of deposit is possible – within the bank only

Types of Customers Who is a customer? Not defined – Sec 131 of NI Act 1881 used a

word called “ Customer” Old View – By Sir John Paget – Duration

Theory – Great Western Railway vs London & County Bank

Modern Theory – Rejection of Duration theory – Ladbrok vs todd,, The Central Bank of India Ltd vs Gopinathan Nair (Kerala)

Relationship

General Relationship Debtor – Creditor (Foley Vs Hill) Special Features Must Demand Payment (Jammu and

Kashmir Bank Ltd Vs Chandra prakash) Only at the branch where the account

is kept Within Banking Hours

Accounts of Customers Preliminary Inquiries- Introduction

Indian Bank Vs Catholic Syrian Bank Ltd Liability of the Introducer Who can Introduce KYC Guidelines

Specimen Signature Forgery Facsimile

Mandate Principal & Agent Individual Account, Joint Account, Partnership, Companies , Minor Minor as agent Stamping Revocation / Cease / Termination Signature

Power of Attorney Special / General Donor / Donee Stamping Individual Account, Joint Account, Partnership, Companies, Minor Signature Power of attorney & Mandate Revocation / Cease / Termination

Accounts / Types of Customers Lunatic Drunkard Minor Married Women Mentally Challenged Insolvency Joint Account Partnership HUF (Joint Hindu Family) Joint Stock Companies Clubs Associations and Societies Trustees Executors and Administrators Death of the Customer

Banker is not a Debtor in Banker as Trustee – Safe Custody Banker as Agent – Bills / Cheques for collection – (Jai

Sports Ltd Vs New Bank of India Ltd (1948)) Bankers duty of secrecy

Where disclosure is under compulsion of law Where there is a duty to the public to disclose Where the interest of the bank requires disclosure Where the disclosure is made at the express or

implied consent of the customer Bankers’ book evidence act – 1881- Certified Copy

Bankers lien A lien is a right to retain the goods or securities belonging to the debtor until he discharges a debt due to

the retainer thereof Received in Ordinary course of business Set-off – Fixed deposit / Two similar accounts, Two separate

accounts Garnett Vs Mckervan Jindaram Vs Central Bank of India Ltd Greenhalgh and Sons Vs Union Bank of Manchester

Received in the ordinary course of biz (no special agreement) Krishna Kishore Kar Vs Uco Bank

Not exercisable if left inadvertently London and Globe Finance Corporation

If securities are left un-released Syndicate Bank Vs Vijay Kumar

Bankers Obligation in Honoring Cheques Sec -310f NI Act - Obligation Agreement for Overdraft , No need of

combining balances with other branches by the bank– Mohammed Hussain Vs Chartered Bank

Damages for wrongful dishonor (Business men & others) – Robin Vs Steward / Gibbons Vs Westminister Bank

Damages only to the drawer and not to the payee Meghaji Malsee ltd Vs PC Ommen

Effects uncleared Underwood Vs Barclays Bank

Garnishee Order Funds coming into the hands

subsequent to the garnishee not attached Nandikatta Anjana Vs Bandi Ramakrishna

A joint account is not attached Macdonald Vs Tacquash Gold Mines

Un-cleared items Jones Vs Coventy Un-cleared items no specific

agreement Fern Vs Bishop & Co ltd

Thank you