Good Morning
Dear Candidates,
Purpose :To prepare for written exam of SBI JUNIOR ASSOCIATES (CLERK)/ PO/IBPS PO/CLERK/RRB PO/ASSISTANT.
Must spend one hour for this section.
Out of this one hour :
Spend 15 min : visit following very useful website,:
http://bankinterview.in/
on home page you will link for 600 important questions on banking/financial aspects. click that
last year in all banking exam most questions came out of these questions only.
you must cram min 15 Questions out of these 600 QA today.
Spend 30 min :
read any current affair magazine
Spend 15 min:
Learn following :
A Hindu Joint Family or Joint Family or Hindu Undivided Family
The meaning of Hindu Undivided family is defined under the Hindu law. According to this law it is a family that consists of persons lineally descended from a common ancestor.HUF consists of father, sons and daughters and wives.
PARTNERSHIP FIRM:
’Partnership” is 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. Persons who have entered into partnership with one another are called individually “partners” and collectively a “firm”, and the name under which their business is carried on is called the “firm name”.
Limited Liability Partnership (LLP) :
A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore exhibits elements of partnerships and corporations. In an LLP, one partner is not responsible or liable for another partner's misconduct or negligence.
Different Types of Bank Customers
Accounts of Minors:
Who is a Minor?
As per Sec3 of “Indian Majority Act, 1875,” every other person domiciled in India shall be deemed to have attained his majority when he shall have completed his age of eighteen years and not before”. Thus a ‘Minor’ is a person who has not completed the age of eighteen years.
Where a legal guardian is appointed by a court of law the person attains majority on completion twenty-one years of age and not before (Sec3 of Indian Majority Act, 1875).
According to the Indian Contract Act, 1872, a minor is not capable of entering into a valid contract and a contract entered into by a minor is void.
A minor after attaining majority cannot ratify the contract made by him during his minority since agreement made by him as a minor is void.
Who is a Guardian?
As per Sec.4 of “ The Guardians And Wards Act, 1890” "guardian" means a person having the care of the person of a minor or of his property or of both his person and property.
Guardians may be categorized into following three types:
(i) Natural guardian,
(ii) Testamentary Guardian: -Guardian appointed by the will of the minor's father or
mother,
(iii) Guardian appointed by a court under the Guardians and Wards Act, 1890.
Natural Guardians in Different Religions:
a) Hindu
According to Sec.6 of Guardians and Wards Act, 1890,the natural guardian of a Hindu minor, in respect of the minor’s person as well as in respect of the minor’s property (excluding his or her undivided interest in joint family property), are-
(a) In the case of a boy or unmarried girl- the father, and after him, the mother,
provided that the custody of a minor who has not completed the age of five
years shall ordinarily be with the mother;
(b) In the case of illegitimate boy or an illegitimate unmarried girl- the mother,
and after her, the father;
(c) In the case of married girl -the husband:
(Note: The expression “father” and “mother” do not include a step- father and a
stepmother.)
b) Muslim: Under the Mohammedan Law, father is the natural
guardian of the property of a minor. A mother of a Muslim minor is not a natural
guardian of her child.
A Muslim minors natural guardian in the order of preference is as under:
oFather
oExecutor appointed by father’s will
oGrandfather
oExecutor appointed by grandfather’s will
oIf there is no guardian from any of the four categories mentioned above,
then guardian will have to be appointed by the court.
c)Christians & Parsis:
The natural guardian of a minor child is father during his lifetime and after him, the mother. In respect of child born out of wedlock registered under “The Special Marriage Act, 1954” the Guardian and Wards Act, 1890, govern guardianship.
2. Accounts opened by Illiterates:
Those who are unable to sign but use thumb impression are illiterates for banks.
Illiteracy does not make a person incompetent to contract.
Therefore an illiterate person can open and operate a bank account.
However, banks do not open current account of illiterate person.
For opening an account the person has to come to bank personally along with a witness who is known both to the depositor and to the bank. While opening an account banks obtain left hand thumb impression of illiterate men and right hand thumb impression of illiterate female.
The thumb impression is obtained in the presence of a person known to the bank and the depositor.
The thumb impression is to be witnessed by a customer of the bank and noting to this effect is done (left/right thumb impression of Mr./Ms. affixed in my presence).
Photograph of the account holder is obtained which is affixed on the ledger folio, account opening form and pass book.
Normally, no chequebook is issued to the account holder. The account holder has to come to the bank for operating the account. After proper identification banks pay the amount to the account holder. All other terms and conditions applicable for opening an account also apply in this case. Banks are required to explain the terms and conditions governing the account to the illiterate.
3. Opening of Accounts by visually impaired (blind) person:
A blind person is legally competent to enter into a contract or to open and operate an account. The risks in case of such an account arises due to the physical inability of the person to see. For opening an account, the person has to personally come to the bank along with a witness known to both the depositor and the bank.
While there is no legal provision for the appointment of a guardian of a blind person, banks prefer a properly constituted attorney to operate the account on behalf of the accountholder. Attested copies of the photograph of the blind person are obtained (attested by someone well known to the branch) and a copy of each is affixed on the account opening form/specimen signature card, ledger folio and pass book. Both the signature and thumb impression of the blind person are obtained on the specimen signature card along with the signatures of witnesses known to the bank. A rubber stamp indicating that the accountholder is a blind customer, is affixed on the account opening form, specimen signature card, ledger folio, pass book, paying- in-slip, withdrawal form, chequebook etc. This enables bank officials in exercising caution in the transactions with the blind customers. Bank is required to explain the terms and conditions governing the account to the blind person. In general the blind customers are given special attention whenever they come to the bank.
Precautions:
o While opening an account the blind person has personally to come to bank.
o He can open all types of accounts either singly or jointly with any other
person, which he considers to be reliable.
o While opening the account, rules, regulations, terms and conditions are read
out and explained to him in the presence of a witness and the signature of
the witness of having done this is obtained on the account opening form.
4. Accounts of Hindu Undivided Families (HUF):
The Hindu Succession Act 1956 governs HUF. The HUF carries out ancestral business and possesses ancestral properties.
As per Hindu Law two schools of thought, Dayabhaga and Mitakshara govern Hindu undivided family.
In west Bengal Dayabhaga is followed and in the rest of the country Mitakshara is followed.
In Dayabhaga the father acquires absolute right and sons do not acquire any right by birth in Mitakshara a male member acquires the right by birth.
Female members are not co-parceners except in Tamil Nadu and Andhra Pradesh.
The eldest male member is called as a Karta and all other male members are called as co-parceners.
The right to manage HUF property vests in the 'Karta' of the family.
Karta is either the father or the senior most male member of the family. All other male members are called coparceners.
In the interest of the family and family business, only the Karta can create a charge over the ancestral property. However, he cannot make a contract, which binds the other member personally. Other members are responsible to the extent of their share in the ancestral property.
HUF is not dissolved In the event of death of one of the members of the joint Hindu family. It differs from the partnership firm as on the death of one of the partners, the firm is dissolved. On the death of karta the senior most co-parcener becomes karta.
A coparcener continues to be a member of HUF, even after his migration outside India and acquiring status of NRI or taking citizenship of another country.
If the Karta himself migrates, an alternative Karta of the HUF is appointed by the HUF with consent from all coparceners.
Opening of Account of HUF:
The account is opened in the name of the Karta and family business. The Karta and all the adult members of the HUF are required to sign the account opening form. Banks do not open Savings Bank account of HUF engaged in trading and business activities
Operations in account:
The operations in the account are normally restricted to Karta of the family. The Karta can appoint any of the adult coparceners to operate the bank account as 'Manager' if HUF carries out business at various places through its branches.
HUF accounts can also be operated by coparcener and /or other adult members of HUF also, against a letter of authority and against a stamped letter of indemnity cum undertaking give by the Karta. Since female members in an HUF are not coparceners, they cannot be authorised to operate bank account. If there is no adult coparcener, a mother is allowed to manage the property of HUF and operate the account.
5. Account of Sole Proprietary Concerns:
Banks do not open savings bank account in the name of a proprietorship firm but open current account in the name of the sole proprietary concerns.
Accounts in the name of a sole proprietary concern are treated like individual accounts.
The account can be operated either by the proprietor himself or by a person duly authorised to operate the account on his behalf. Banks exercise caution while accepting cheques drawn in favour of the sole proprietary concern and deposited in personal account of the proprietor.
When the sole proprietor of the firm deposits cheque payable to the firm for credit of his personal account bank obtains a declaration from him to the effect that he is the sole proprietor of the firm.
6.Accounts of registered societies, clubs and Associations:
A club or a society gets legal entity only when it is incorporation under Company’s Act, 1956 or under Cooperative Societies Act, 1860. Bye laws of the society, clubs, and association contain rules, regulations or conduct and activities of the association. While opening account banks obtain:
o Copy of the bye laws;
o Copy of resolution passed by the managing committee regarding opening and
conduct of account,
o Certificate of registration in original,
o A list of the Managing Committee members
o Copies of resolutions electing them as Committee members duly certified by
the Chairman
Bank keeps a copy of the above-mentioned document for its record.
7.Account of Partnership Firms:
According to Section 4 of the Indian Partnership Act, a partnership is the relationship between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.
The Supreme Court has held that the word "persons" in Section-4 contemplates only natural or artificial persons i.e., legal persons. Since a firm is not a person, is not entitled to enter into partnership with another firm or Hindu undivided family or individual.
Therefore, banks do not open account where a firm is a partner in another firm. As Joint stock companies and statutory bodies constitute "artificial or legal persons" therefore, they can be partners in a partnership firm.
As per the Indian Partnership Act, minimum number of partners can be two and maximum twenty. The number of partners is restricted to 10, if the partnership firm carries out business of banking. Minors can be admitted as partner only to the benefits of the partnership.
Registration of partnership firm:
A partnership firm can be registered with Registrar of Firms. However, as per law, it is not compulsory to register a partnership firm. Non-registered partnership firm have certain disabilities. Such firms cannot sue others to enforce a right arising out of a contract. A suit filed by an unregistered partnership firm is not maintainable, even after its subsequent registration. Even partners of an unregistered firm cannot sue other partners or his firm, for their rights.
Opening of Account:
A partnership firm can open all types of accounts except savings bank account. Bank opens account of a partnership firm in the name of the firm and not in the names of partners individually or jointly. The account opening form is signed by all the partners in their individual capacity as well as in the capacity of a partner to ensure joint and several liabilities. While opening the account banks verify the partnership deed to examine whether any clause of the deed is detrimental to the interest of bank. Since bank would not like to be bound by the terms of the partnership deed, banks do not accept the partnership deed even if offered.
In case of registered firm, banks obtain registration certificate. The account is opened in the name of the firm and all the partners are required to sign account opening form.
Operations in account:
Bank obtains operational instructions i.e. who will operate the account and how it is to be operated. In case a minor is also a partner in the firm his birth certificate is obtained to ascertain the date of birth, which is recorded in the account opening form.
Who can operate?
o All partners jointly
o One of the named partners
o Two / three of the named partners
o A third party under a mandate letter or a power of attorney signed by all
the partners.
A partner authorised to operate the firm's account cannot delegate his authority to another person unless all other partners agree. The authority given to operate the account can be withdrawn by any of the other partners including dormant or sleeping partner by giving notice to the bank. Each partner, whether he/she is operating the account or not, has powers to countermand payment of the cheques drawn by another partner or by an attorney on behalf of the firm.
Partnership firms with illiterate partners:
Current accounts of partnership firms, where a partner is illiterate and affixes thumb impression, can be opened provided a Magistrate attests the thumb impression affixed on the account opening form.
Implied authority:
A partner acts as an agent of the firm for the purpose of the business of the firm. He binds the firm and also other partners by his acts. An authority to bind the firm by his acts is called the implied authority of a partner.
Operations in the accounts:
Without proper inquiry with the other partners, bank does not accept cheque drawn in favour of the firm for credit to the personal account of a partner. Failure to make proper inquiries would deprive the bank of the protection afforded under Section-131 of the Negotiable Instruments Act on grounds of negligence. Cheques payable to a partner are not be credited to the firm’s account without proper inquiry being made with the other partners.
Retirement of a partner:
On notice of retirement of a partner, the bank closes the existing account and opens a new account of the firm with the remaining partners or along with the new partner if admitted to the new firm.
Death of a partner:
o Death of a partner dissolves the partnership. However, for the purpose of
winding up of the firm, the bank may allow the surviving partner(s) to
operate the firm's account, if the account is in credit.
o Cheques drawn by a partner before his death and presented for payment are
honoured after obtaining confirmation of the surviving partners.
Dissolution of a partnership firm:
Dissolution of a firm amounts to the breaking up of relation of partnership between all the partners. In the event of dissolution banks do not permit operations in the account. A partnership firm may be dissolved by any of the following modes
(a) By mutual agreement between all the partners.
(b) By notice of dissolution in case of partnership at will.
(c) By operation of law or compulsory dissolution of the firm.
(d) By happening of certain contingencies such as death or insolvency of a partner.
(e) Dissolution by Court of Law in cases like insanity, permanent incapacity,
misconduct of a partner affecting business etc.
For written exam/ interview guidance , you may contact:
ANIL AGGARWAL SIR
EX CHIEF MANGER ,PUNJAB NATIONAL BANK.
Mobile: +91 9811340788
Office: Flat #49, Trilok Apartments, Patparganj, I.P. Extension, Delhi-110092.
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