Straight Talk

INTRODUCTION OF ACCOUNTSI went to a bank branch to open a savings bank account. I was asked to get myself introduced to the bank through an account holder of the branch. Even as one of...

I went to a bank branch to open a savings bank account. I was asked to get myself introduced to the bank through an account holder of the branch. Even as one of my acquaintances maintaining savings bank account in the said bank branch introduced me, the bank officials refused to open my account. They said the introduction is invalid. I want to know the parameters of introduction for opening a bank account? Is it mandatory for opening a bank account?
Gulzar Ahmad Hajam, Baramulla

 There are Reserve Bank of India (RBI) guidelines for the banks which envisage that the banks have to ask for proper introduction from a person desirous for opening an account in the bank. The prospective depositor has to furnish introduction (from either any of the existing account holders or a respectable member of the local community known to the bank or the bank's staff) for opening  not only current and savings bank accounts but also all deposit accounts including call, short-term and fixed deposits. There are clear cut instructions to the banks that the person giving introduction should be of some standing and have an account with the bank for at least six months to ensure that the accounts are not opened on the introduction of new account holders or persons having small and marginal balances.
 It's mandatory for banks to obtain introduction before opening account of a prospective depositor. A large number of frauds are perpetrated in banks mainly through opening of accounts in fictitious names, irregular payment of cheques, manipulation of accounts and unauthorised operations in accounts. Considering the fact that opening of an account is the first entry point for any person to become a customer of the bank, utmost vigilance in opening of accounts and operations in the accounts is  called for.
 Introduction of an account is obtained not merely as a formality to get protection under section 131 of the Negotiable Instruments Act 1881, but also to enable proper identification of the person opening an account, so that it would be possible, to trace the person later when required. In fact it is a measure of safe-guard against opening of accounts by undesirable persons or in fictitious names with a view, inter alia, to depositing unaccounted money.
 In certain cases where the prospective depositor is not able to provide an introduction satisfactorily, he has to provide sufficient proof of his antecedents before the account is allowed to be opened.

Is it necessary for the introducer to come to the branch for introduction purpose?
 It would be better if the introducer accompanies the prospective depositor to the branch and puts his signature on the account opening form in presence of a bank official. If an introducer does not personally call at the branch to introduce an account, the fact of having introduced a new account has to be got confirmed by the bank from him in writing. Till such time the confirmation is received, the bank will not allow transactions in the account and will also deny collecting of cheques/draft through the newly opened accounts.

 I recently approached to a bank in my vicinity to open a savings bank account in the name of my sister who is mentally retarded. But the bank refused to open the account and the officials said when the person is not capable of handling herself how can she operate the transaction of the bank account. They also told me that there is RBI instructions that the bank account cannot be opened for the mentally retarded persons. Is it so? Isn't there any way out for a person who is mentally unsound / mentally retarded to open a bank account?
Murtaza Ali, Budgam
 You can open a bank account for the person who is mentally challenged. Even those with disabilities like autism, mental retardation, cerebral palsy, and multiple disabilities can open bank accounts and operate them with ease. In this connections, the Reserve Bank of India (RBI) has  has directed the banks to accept the Guardianship Certificate issued either by the District Court under Mental Health Act or by the Local Committees for the purpose of opening and operating accounts of these mentally challenged persons.
 Notably, the Mental Retardation and Multiple Disabilities Act in 1999 is in place with purpose to provide for the appointment of legal guardians for people with these disabilities as mentioned above. The accounts can be opened and operated by the legal guardian as long as he remains the legal guardian.

I am a retired college principal. I receive my pension through J&K Bank. I am badly in need of money. I approached my branch where I have the pension account for some financial solution. I was told that the bank can grant me maximum loan of lac. Isn't there any other loan scheme for pensioners where loans above the said limit can be granted?
(The sender has requested anonymity)
 J&K Bank has a cash loan scheme in place for pensioners and the branch had rightly told you about the maximum loan limit permissible under the scheme. But the scheme has been revised just a few days back. Under the revised scheme, the pensioners in the age group of up to 65 years are eligible to obtain a loan equivalent to their 18 months' pension subject to a maximum permissible limit of Rs.2.50 lacs. The loan is to be repaid in 48 monthly installments. The pensioners in the age group of above 65 years and up to 70 years are eligible to avail cash loan facility of Rs.1.50 lacs or 12 months pension, whichever is lower. The loan is to be repaid in 36 monthly installments. Those pensioners above 70 years of age can avail loan equivalent to their 9 months pension subject to a maximum of Rs.70,000 and repayable in 24 monthly installments. However, the deductions on account of monthly installments should not exceed 50% of monthly pension.
 So, you can again approach to your branch and avail the benefits of the revised scheme as mentioned above.

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