BLP Module 1 - Banker and Customer PDF

Banking Law and Practice – V Sem MBA Mangalore University MODULE 1 – BANKER AND CUSTOMER A) Banker and Customer Relationship: 1. Banker – Meaning - 2 marks 2. Customer – Meaning - 2 marks 3. Relationship between Banker and Customer...

Banking Law and Practice – V Sem MBA Mangalore University MODULE 1 – BANKER AND CUSTOMER A) Banker and Customer Relationship: 1. Banker – Meaning - 2 marks 2. Customer – Meaning - 2 marks 3. Relationship between Banker and Customer General features of relationship between Banker and Customer - 5/10 marks Special features of relationship between Banker and Customer - 10 marks 4. Banker’s Obligation - 5 /10 marks To honour customers cheques To maintain secrecy of the customers 5. Bankers Rights – 5 marks (any one) /10 marks Bankers Right to Lien-Circumstances and Exceptions Bankers Right of Set off-conditions to be satisfied Bankers Right to Charge Compound Interest, Commission etc. B) Customer and Account Holder 6. Customer – Meaning - 2 marks 7. Account Holder – Meaning - 2 marks 8. Types of Account Holders - 2/5 marks 9. Procedure and practice in opening and operating their accounts-10 marks (any two) Minor Joint Account Holders Partnership Firms Joint Stock Companies Clubs Non-Resident Account- a) NRI Account b) NRE Account 1 Dr. Kantesha Sanningammanavara, Assistant Professor, GFGC, Bettampady Banking Law and Practice – V Sem MBA Mangalore University Meaning of Banker A banker is a person or an institution (usually a commercial bank) that accepts deposits from the public, makes loans, and provides other financial services. The banker acts as a financial intermediary, managing funds, offering investment advice, and facilitating various types of transactions. The role of the banker involves maintaining trust, ensuring the safety of the customer's deposits, offering financial products like savings accounts, loans, and investment services, and complying with regulatory requirements. According to Macleod “The essential business of a ‘Banker’ is to buy money and debts, by creating other debts. A banker is therefore, essentially, a dealer in debts or credit”. According to Dr. H.L.Hart “A banker or a bank is a person or a company carrying on the business of receiving moneys, and collecting drafts, for customers, subject them from time to time by the customers to the extent of the amounts available on their current accounts”. Meaning of Customer A customer is an individual or entity that holds an account with a bank and engages with the bank for financial services, such as depositing money, withdrawing funds, taking loans, or seeking investment advice. The customer can be a retail customer (individual or small business) or a corporate customer (larger companies). The relationship between the banker and the customer is built on trust, contractual obligations, and often governed by legal principles, such as confidentiality, the right to receive interest on deposits, or the responsibility to repay loans. Relationship between Banker and Customer General Relationship between Banker and Customer The relationship between a banker and a customer is complex, involving various legal, financial, and service-oriented aspects. These relationships vary depending on the nature of the transaction or service provided. Here are the general types of relationships between a banker and a customer: 2 Dr. Kantesha Sanningammanavara, Assistant Professor, GFGC, Bettampady Banking Law and Practice – V Sem MBA Mangalore University 1. Debtor and Creditor: Bank as Debtor: When a customer deposits money in a bank, the bank becomes a debtor to the customer. The bank owes the deposited amount to the customer. Customer as Debtor: When a customer takes a loan from the bank, the customer becomes a debtor, and the bank becomes the creditor, expecting repayment of the loan along with interest. 2. Pledger and Pledgee: Bank as Pledgee: If the customer pledges movable assets (like shares or gold) as collateral for a loan, the bank acts as the pledgee and holds the asset as security. Customer as Pledger: The customer, in this case, is the pledger, who has pledged the asset to the bank. 3. Licensor (Lessor) and Licensee (Lessee): Bank as Licensor/Lessor: When the bank provides a customer access to a safe deposit locker, it acts as a lessor or licensor, leasing the space or service to the customer. Customer as Licensee/Lessee: The customer becomes the lessee/licensee, renting or using the bank's service, such as a locker. 4. Trustee and Beneficiary: Bank as Trustee: In certain cases, the bank acts as a trustee, holding assets (e.g., bonds, securities) or funds in trust for the customer. This occurs in fiduciary services. Customer as Beneficiary: The customer is the beneficiary of the trust, having the legal right to the assets or income managed by the bank. 5. Bailor and Bailee: Bank as Bailee: If the customer entrusts physical goods or securities to the bank for safekeeping, the bank becomes the bailee. Customer as Bailor: The customer, as the bailor, hands over possession of the goods or securities, with the expectation that the bank will return them safely. 6. Advisor and Client: Bank as Advisor: In wealth management, financial planning, or investment banking, the bank provides advisory services, making it the advisor. 3 Dr. Kantesha Sanningammanavara, Assistant Professor, GFGC, Bettampady Banking Law and Practice – V Sem MBA Mangalore University Customer as Client: The customer receives professional advice related to investments, savings, or financial decisions, thus acting as the client. 7. Agent and Principal: Bank as Agent: The bank may act as an agent on behalf of the customer to perform various services like bill payments, fund transfers, or buying and selling of securities. Customer as Principal: The customer is the principal, directing the bank (agent) to perform specific tasks on their behalf. 8. Pawnor and Pawnee: Bank as Pawnee: When a customer pawns movable property as security for a loan (similar to pledging), the bank is the pawnee and holds the property until the loan is repaid. Customer as Pawnor: The customer is the pawnor, pledging the asset in exchange for a loan. 9. Mortgagor and Mortgagee: Bank as Mortgagee: When a customer mortgages immovable property (like a house) to the bank for a loan, the bank becomes the mortgagee, holding the mortgage as security for the loan. Customer as Mortgagor: The customer is the mortgagor, offering the immovable property as security. 10. Trader and Customer (Consumer): Bank as Trader: Banks offer various products and services (like loans, deposits, or insurance), acting as a trader selling these financial products. Customer as Consumer: The customer is the consumer, purchasing or availing of the bank’s services or products. 4 Dr. Kantesha Sanningammanavara, Assistant Professor, GFGC, Bettampady Banking Law and Practice – V Sem MBA Mangalore University Special Relationship between Banker and Customer The special relationship between a banker and a customer arises from specific duties, obligations, and rights that a banker owes to a customer. These rights and obligations are critical for maintaining trust, ensuring legal compliance, and protecting both parties in their financial interactions. Below are the key special relationships between a banker and a customer: 1. Banker’s Obligation to Honour Cheques: Obligation: The banker is legally obligated to honour a customer’s cheques as long as there are sufficient funds in the customer’s account. This obligation arises from the contractual agreement between the bank and the customer. Conditions: o The cheque must be properly drawn and signed by the customer. o There should be no legal or court order (like a garnishee order) preventing the bank from paying the cheque. Consequences of Dishonouring: If the bank wrongfully dishonours a cheque when there are sufficient funds, it can damage the customer’s reputation, and the bank may be liable for damages. 2. Banker’s Lien: Definition: A banker’s lien refers to the bank’s right to retain a customer’s goods, securities, or other assets in the bank’s possession until a debt owed by the customer is paid. This is a form of security for the bank. Types of Lien: o General Lien: The right to retain all the customer’s goods in the bank’s possession until the debt is paid. o Particular Lien: The right to retain specific goods for a particular debt or obligation. Application: The banker’s lien is often implied in banking transactions, meaning the bank can exercise this right without an explicit agreement. 5 Dr. Kantesha Sanningammanavara, Assistant Professor, GFGC, Bettampady Banking Law and Practice – V Sem MBA Mangalore University 3. Banker’s Duty to Maintain Secrecy of Customer’s Account: Obligation: The bank has a duty to maintain the confidentiality of a customer’s account details. This includes protecting information related to the account balance, transactions, and personal details of the customer. Exceptions to the Duty of Secrecy: o Disclosure Required by Law: The bank may disclose information when required by law (e.g., under anti-money laundering laws). o Disclosure with Customer’s Consent: If the customer gives explicit permission. o Disclosure in Public Interest: When the public interest outweighs the interest of the individual. o Disclosure to Protect the Bank’s Interest: If the bank needs to disclose information to defend itself in a legal action initiated by the customer. 4. Banker’s Right to Combine Accounts: Definition: The bank has the right to combine the balances of multiple accounts held by the customer to offset a debit balance in one account with a credit balance in another. Conditions: o The accounts must be held in the same right (i.e., personal accounts cannot be combined with business accounts unless otherwise agreed). o The bank must give notice to the customer before exercising the right to combine accounts. o Accounts cannot be combined if one of them is subject to specific legal conditions (like a trust account). Purpose: The right to combine accounts helps the bank recover outstanding debts by balancing the customer’s credit and debit positions across multiple accounts. 5. Banker’s Right to Set-Off: Definition: The banker’s right of set-off allows the bank to adjust mutual debts with the customer. If the customer owes the bank a sum of money, the bank can use the funds from the customer’s account to set off the debt. Conditions: o Both the bank’s claim and the customer’s claim must be liquidated (i.e., fixed and determined). 6 Dr. Kantesha Sanningammanavara, Assistant Professor, GFGC, Bettampady Banking Law and Practice – V Sem MBA Mangalore University o The bank must inform the customer of its intention to exercise the right of set- off. o The right of set-off cannot be exercised arbitrarily; it must follow the terms and conditions of the banking relationship. Application: For example, if a customer has a loan with an overdue payment, the bank can debit the customer’s savings or current account to settle the loan payment. 6. Banker’s Duty to Provide Statements of Account: Obligation: The bank must provide regular account statements to the customer, detailing all transactions, debits, credits, and the account balance. Importance: This helps the customer keep track of their financial activities and ensures transparency. It also gives the customer an opportunity to verify transactions and raise disputes, if any, within a stipulated time. 7. Banker’s Duty to Act with Care and Skill: Obligation: The bank has a duty to handle the customer’s financial affairs with a reasonable degree of care and skill, as per industry standards. Application: This includes processing transactions accurately, safeguarding deposits, and ensuring that financial advice or investment services are provided competently. 8. Banker’s Right to Charge Interest and Fees: Right: The bank has the right to charge interest on loans and fees for the various services it provides (e.g., ATM withdrawals, overdraft protection, or account maintenance). Conditions: These charges must be in line with the terms and conditions agreed upon when the customer opens an account or applies for a loan. Summary: The special relationship between a banker and a customer is defined by a set of mutual rights and obligations: The banker is obliged to honour cheques, maintain confidentiality, provide account statements, and act with skill. The banker has the right to combine accounts, exercise a lien, set-off debts, and charge interest or fees. 7 Dr. Kantesha Sanningammanavara, Assistant Professor, GFGC, Bettampady Banking Law and Practice – V Sem MBA Mangalore University Bankers Rights Bankers have several rights that enable them to protect their interests while conducting financial transactions with customers. These rights are governed by law and contractual agreements and ensure the banker can recover debts, apply charges, and manage customer accounts efficiently. Below are the main rights of a banker, including the right to lien, right of set-off, and right to charge interest and commission: 1. Banker's Right to Lien: Definition: The banker’s right to lien refers to the right of the bank to retain the customer’s goods, securities, or other movable assets in its possession until the customer’s debt is paid. Nature of Lien: This is typically a general lien, meaning the bank can retain the customer’s property in its possession for any outstanding debt owed by the customer. It is an implied right unless explicitly excluded by an agreement. Circumstances for Exercising the Right to Lien: The lien applies only to goods or securities in the bank's possession for the customer’s benefit. For instance, if a customer deposits shares or bonds with the bank for safekeeping, the bank can retain those until a debt is repaid. The right of lien is applicable only when the possession of the goods is lawful. If the bank holds assets unlawfully or without the customer’s consent, it cannot exercise this right. The lien applies only when there is no express contract contradicting the lien. If the customer and the bank have agreed that the assets should not be used as security for a loan, the lien may not apply. Exceptions to the Banker’s Lien: Deposits for a Specific Purpose: If a customer has deposited funds or assets with the bank for a specific purpose, the bank cannot use those assets for any other purpose or exercise its right to lien. Trust Accounts: The bank cannot apply a lien to assets held in trust for a third party, such as trust accounts or fiduciary accounts. Safe Custody Articles: Items placed in the bank for safekeeping (like valuables in a safe deposit locker) are not subject to the banker’s lien since these are held for custody, not for debt repayment. 8 Dr. Kantesha Sanningammanavara, Assistant Professor, GFGC, Bettampady Banking Law and Practice – V Sem MBA Mangalore University Accounts with Specific Terms: If the customer’s account is subject to terms and conditions that restrict the bank’s right to lien, the bank must abide by those restrictions. 2. Banker's Right of Set-Off: Definition: The right of set-off allows the bank to combine a customer’s credit balance in one account with the debit balance in another account to recover dues. For example, if a customer has a savings account with a credit balance and a loan account with an outstanding balance, the bank can offset the credit against the debit to clear the debt. Conditions to be Satisfied for the Right of Set-Off: Same Customer and Same Capacity: The accounts involved must belong to the same customer, and both must be held in the same legal capacity. The bank cannot set off funds from a personal account against a business account unless otherwise agreed. Accounts Must be in the Same Right: The accounts should be in the same right (i.e., the customer should hold all accounts in the same legal capacity). For example, the bank cannot combine an individual’s personal account with a joint account without consent. Due and Payable: The debt that the bank seeks to set off must be due and payable. The bank cannot exercise set-off rights on future or contingent liabilities. Notice to the Customer: Before exercising the right of set-off, the bank should ideally give reasonable notice to the customer, although this is not always legally required. This is to allow the customer to make alternative arrangements if needed. No Express Contract to the Contrary: If there is an agreement between the bank and the customer that prohibits the right of set-off, the bank must follow the terms of the agreement. 3. Banker's Right to Charge Compound Interest, Commission, and Fees: Right to Charge Compound Interest: o Banks have the right to charge compound interest on loans and advances, meaning interest is charged not only on the principal amount but also on the accumulated interest. This is often referred to as "interest on interest." o Compounding Period: The frequency of compounding can vary (daily, monthly, quarterly), and it is typically specified in the loan agreement. 9 Dr. Kantesha Sanningammanavara, Assistant Professor, GFGC, Bettampady Banking Law and Practice – V Sem MBA Mangalore University o Regulatory Compliance: The bank’s right to charge compound interest is subject to regulations set by the central banking authority or financial regulations in the respective country. In many jurisdictions, there may be limits on how frequently interest can be compounded. Right to Charge Commission: o Banks have the right to charge commission for various services rendered, such as providing letters of credit, issuing bank guarantees, processing international transactions, and more. o Commission Rates: The rate of commission is usually predefined and is disclosed to the customer at the time of availing the service. It may vary depending on the type of transaction, complexity, and the risks involved. o Types of Commissions: ▪ Transaction Commission: Charged for executing specific transactions like foreign exchange conversion or remittances. ▪ Service Commission: Charged for providing services like underwriting, advisory, or managing investments. Right to Charge Fees: o Banks have the right to charge various fees for the services provided, such as: ▪ Account Maintenance Fees: For managing and maintaining savings, checking, or other types of accounts. ▪ Loan Processing Fees: For processing a loan application and disbursing the loan amount. ▪ ATM and Card Fees: For issuing and maintaining debit or credit cards, ATM withdrawals, and other card-related services. ▪ Late Payment Fees: For customers who miss a payment deadline on a loan or credit card bill. Disclosure of Charges: o Banks are generally required by law to disclose the interest rates, fees, and commissions to customers upfront, either in the account terms or loan agreement. o Transparency: Customers must be informed of the compounding method, applicable fees, and commission rates before availing of a product or service to avoid disputes. 10 Dr. Kantesha Sanningammanavara, Assistant Professor, GFGC, Bettampady Banking Law and Practice – V Sem MBA Mangalore University Summary: Banker’s Right to Lien: Allows the bank to retain the customer’s assets until debts are repaid, but this is subject to certain exceptions (e.g., trust accounts, safe custody items). Banker’s Right of Set-Off: Enables the bank to combine credit and debit balances across accounts to recover debts, provided certain conditions are met (e.g., same customer, same legal right, debt due and payable). Banker’s Right to Charge Interest and Commission: Banks have the right to charge compound interest on loans and commissions/fees for services provided. This is subject to regulatory guidelines and transparency in disclosing charges to customers. These rights protect the bank’s financial interests while ensuring fair practices in dealing with customers. Customer and Account Holder Customer Definition: In a broad sense, a customer is any individual or entity that engages in transactions or uses financial services provided by a bank. This includes anyone who holds an account, takes out a loan, uses a credit card, or engages in any other banking service. Account Holder Definition: An account holder is a specific type of customer who owns and operates an account with the bank. This term is more focused and denotes the person or entity whose name is on the account and who has the rights and responsibilities associated with it. Types of Account Holders In banking law and practice, account holders can be classified into several types based on the nature of their accounts and the parties involved. Each type of account holder has specific characteristics and implications. Here are the main types of account holders: 1. Individual Account Holder: Definition: A single person who owns and operates an account with the bank. Types: o Savings Account Holder: An individual who maintains a savings account to earn interest on deposited funds. o Checking Account Holder: An individual who holds a checking account for day-to-day transactions and payments. 11 Dr. Kantesha Sanningammanavara, Assistant Professor, GFGC, Bettampady Banking Law and Practice – V Sem MBA Mangalore University o Fixed Deposit Holder: An individual who places a lump sum in a fixed deposit account for a specified term to earn a higher rate of interest. Rights: Includes access to account funds, interest earnings (if applicable), and account statements. Responsibilities: Includes managing account balances, paying overdraft fees, and complying with account terms. 2. Joint Account Holders: Definition: Two or more individuals who share ownership of a single account. Types: o Joint Tenants with Rights of Survivorship (JTWROS): In the event of one account holder’s death, the surviving account holders automatically inherit the deceased's share of the account. o Tenants in Common: Each account holder has a distinct share of the account, and in the event of death, the deceased’s share is distributed according to their will or legal heirs. Rights: Each holder typically has equal access to the account, and all can make transactions, deposits, and withdrawals unless otherwise specified. Responsibilities: All holders are jointly responsible for any overdrafts or fees, and any disputes among joint holders can affect account management. 3. Corporate or Business Account Holder: Definition: An organization or company that holds an account with the bank. Types: o Business Checking Account: Used by businesses for day-to-day financial operations and transactions. o Business Savings Account: Used for saving business funds and earning interest. o Corporate Fixed Deposit: For placing business funds in a fixed deposit to earn interest over a specified term. Rights: Includes access to funds, the ability to make transactions, and access to banking services tailored for businesses. Responsibilities: Includes managing account balances, adhering to terms and conditions, and ensuring compliance with legal and regulatory requirements. 12 Dr. Kantesha Sanningammanavara, Assistant Professor, GFGC, Bettampady Banking Law and Practice – V Sem MBA Mangalore University 4. Trust Account Holder: Definition: An account held by a bank in the name of a trust, with the trust being the owner of the account and the trustee managing it. Types: o Revocable Trust Account: The trust can be altered or revoked by the grantor. o Irrevocable Trust Account: The trust cannot be altered or revoked once established. Rights: Trustees manage the account on behalf of the beneficiaries, who have rights to the trust assets. Responsibilities: Trustees are responsible for managing the account according to the terms of the trust and fiduciary duty. 5. Custodial Account Holder: Definition: An account held by an adult (custodian) on behalf of a minor (beneficiary). Types: o Uniform Transfers to Minors Act (UTMA) Account: Allows transfers of property to minors without the need for a formal trust. o Uniform Gift to Minors Act (UGMA) Account: Similar to UTMA, but typically limited to gifts of securities or cash. Rights: The custodian manages the account and makes decisions in the best interest of the minor. Responsibilities: The custodian must manage the account prudently and transfer control to the minor when they reach the age of majority. 6. Non-Resident Account Holder: Definition: An individual or entity that holds an account in a bank located in a country where they are not a resident. Types: o Non-Resident External (NRE) Account: For Indian citizens residing abroad, allowing them to deposit foreign earnings in India. o Non-Resident Ordinary (NRO) Account: For managing income earned in India by non-resident Indians. Rights: Includes access to account funds and services while complying with local regulations. 13 Dr. Kantesha Sanningammanavara, Assistant Professor, GFGC, Bettampady Banking Law and Practice – V Sem MBA Mangalore University Responsibilities: Includes complying with tax regulations and foreign exchange laws. 7. Nominee Account Holder: Definition: An account where the primary account holder appoints a nominee to inherit the account in case of the primary holder’s death. Types: o Simple Nominee Account: The nominee has no rights to the account during the account holder's lifetime but inherits the account upon death. Rights: Nominees have rights to inherit the account but no access to the account while the primary holder is alive. Responsibilities: Nominees must understand their role and potential tax implications upon inheriting the account. Procedure and practice in opening and operating their accounts The procedures and practices for opening and operating accounts vary depending on the type of account holder. Here is an overview of the procedures for opening and operating accounts for different types of account holders, including minors, joint account holders, partnership firms, joint stock companies, clubs, and non-residents: 1. Minor Account Holder: Opening the Account: Eligibility: Minors typically need to be at least 10 years old. Accounts for minors are usually opened as "Minor's Accounts" with a guardian. Documents Required: o Proof of identity and address of the guardian (e.g., Aadhar card, passport, utility bills). o Proof of identity of the minor (e.g., birth certificate). o Passport-sized photographs of both the minor and the guardian. Account Type: Often a savings account with restrictions on the types of transactions the minor can perform. Operating the Account: Management: The guardian operates the account until the minor reaches the age of majority (usually 18 years). Restrictions: The minor usually cannot operate the account independently until they reach the legal age. 14 Dr. Kantesha Sanningammanavara, Assistant Professor, GFGC, Bettampady Banking Law and Practice – V Sem MBA Mangalore University Transition: On reaching adulthood, the minor can convert the account into a regular account and operate it independently. 2. Joint Account Holders: Opening the Account: Eligibility: Two or more individuals can open a joint account. Documents Required: o Proof of identity and address for each account holder. o Passport-sized photographs of all account holders. Account Types: Various options include "Joint with Survivorship" and "Joint without Survivorship". Mandate: The account type determines how transactions can be authorized (e.g., "Either or Survivor" or "Both to Sign"). Operating the Account: Management: Transactions require the signatures or approvals of the account holders as per the mandate. Changes: Any changes to the account (e.g., addition or removal of account holders) require consent from all parties. Disputes: In case of disputes, the bank may follow the terms specified in the account agreement or seek a court order if necessary. 3. Partnership Firms: Opening the Account: Eligibility: Any legal partnership firm can open a bank account. Documents Required: o Partnership deed or agreement. o Proof of identity and address of the partners. o Proof of business address. o Registration certificate, if applicable. Account Type: Typically, a current account for business transactions. Operating the Account: Management: Transactions are authorized as per the partnership deed or mandate. Signatories: The partnership deed specifies who can operate the account. Changes: Changes in partnership (e.g., addition or removal of partners) must be updated with the bank. 15 Dr. Kantesha Sanningammanavara, Assistant Professor, GFGC, Bettampady Banking Law and Practice – V Sem MBA Mangalore University 4. Joint Stock Companies: Opening the Account: Eligibility: Public and private companies can open bank accounts. Documents Required: o Certificate of incorporation. o Memorandum and Articles of Association. o Board resolution authorizing the opening of the account and specifying signatories. o Proof of identity and address of authorized signatories. Account Type: Typically a current account for business operations. Operating the Account: Management: Transactions are conducted based on the board resolution and company’s internal policies. Signatories: Authorized by the board of directors, and the bank needs to be informed of any changes in authorized signatories. Compliance: Must comply with corporate governance norms and banking regulations. 5. Clubs and Associations: Opening the Account: Eligibility: Clubs, societies, and associations can open bank accounts. Documents Required: o Registration certificate or proof of existence. o Resolution from the governing body authorizing the account opening and specifying signatories. o Proof of identity and address of authorized signatories. Account Type: Typically a savings or current account. Operating the Account: Management: Transactions must follow the resolution or governing rules of the club or association. Signatories: As per the governing body’s resolution, and changes must be communicated to the bank. 16 Dr. Kantesha Sanningammanavara, Assistant Professor, GFGC, Bettampady Banking Law and Practice – V Sem MBA Mangalore University 6. Non-Resident Accounts: a) NRI Account: Definition: Non-Resident Indian (NRI) accounts are for Indians residing outside India. Types: o NRO (Non-Resident Ordinary) Account: For managing income earned in India (e.g., rent, dividends). o NRE (Non-Resident External) Account: For depositing income earned abroad. Documents Required: o Proof of NRI status (e.g., passport, visa). o Proof of overseas address. o Proof of Indian address (if applicable). o KYC (Know Your Customer) documents. Account Type: Can be a savings, current, or fixed deposit account. b) NRE Account: Definition: Specifically designed for NRIs to manage and repatriate foreign earnings to India. Documents Required: o Proof of NRI status. o Proof of income and overseas address. o KYC documents as required by the bank. Account Type: Savings, current, or fixed deposit accounts, with benefits like repatriation of funds and tax-free interest. Operating the Account: Management: Transactions can be conducted through international banking channels, including online banking. Compliance: Must adhere to foreign exchange regulations and reporting requirements. Summary: Minors: Open accounts with a guardian, with restrictions until they reach adulthood. Joint Account Holders: Shared ownership with specified transaction authorizations. 17 Dr. Kantesha Sanningammanavara, Assistant Professor, GFGC, Bettampady Banking Law and Practice – V Sem MBA Mangalore University Partnership Firms: Open accounts based on the partnership deed with specified operating mandates. Joint Stock Companies: Accounts managed per board resolutions with authorized signatories. Clubs and Associations: Accounts opened based on organizational resolutions with specified signatories. Non-Resident Accounts: Includes NRO and NRE accounts for managing and repatriating funds, with specific documentation and compliance requirements. 18 Dr. Kantesha Sanningammanavara, Assistant Professor, GFGC, Bettampady