Customer’s Account with the Banker

Bank is a service oriented financial institution. Main function of a bank is to mobilize deposit
at lower rate of interest and funding others at higher rate of interest. Traditionally banking
services are offered to them who have got an account. While opening account, desk officials
are require to make thorough scrutiny of all papers and ensure its correctness. Banker-
Customer relationship started with opening a bank account. Previously, different types of
account opening form were used for different accounts. Mere introduction was the only pre-
opening formality of bank account. With the enactment of AML in 2002, a revolutionary
change has been made in the account opening procedure of bank. Uniform Account Opening
Form has been introduced by Bangladesh Bank. The new device offers two categories of
forms namely Individual & Non-Individual. Uniform Account Opening Form is accompanied
by KYC (Know Your Customer) & TP (Transaction Profile). Various changes have been
made in account opening formalities to meet the demand of time and protect bank’s interest.
For example, photograph, Introducer, Nominee and NID of the account holder was not needed
but now it is mandatory.

1. Fixed Deposit Account

If the Customer want to deposit his/her money for a fixed period of time then he/she may open
a Fixed Deposit (FD) account with a bank’s branch. Amount of taka five hundred and over in
multiple of taka one hundred are accepted for fixed deposit. The rates of interest allowed by
the bank on Fixed Deposits for different periods are govern by the Bangladesh Bank’s rules.
Any change in the rate of interest will be advised by the Head Office. In case of renewal of
Fixed Deposit Receipts when application is received or a deposit is renewed by letter, this
letter will be filed alongwith the original application by a supervising official. Bank issued a
receipt for the deposited amount called Fixed Deposit Receipt. Main features of an FD account
are:
 Period of deposit is fixed;
 Amount of deposit is fixed;
 Rate of Interest is fixed.
When a receipt is to be issued in the names of two or more persons, they should be asked to
sign a declaration on the prescribed form indicating whether the deposit id repayable to both
or all of them jointly or to either of them. The customer can enjoy credit limit against the FDR
up to 90% of FDR amount. Interest will be calculated daily basis, accrued monthly basis and
applied (Interest Credit to the Account) quarterly basis. In case of premature encashment
interest will be paid at the rate of

2. Savings Accounts
Bank account designed for small and fixed income group of people and earn some income
from deposit is called Savings Bank (SB) Account. This product (SB account) firstly
introduced for- Salaried person, Farmer, Housewife, Student and non commercial
organization. When an individual approaches a bank with some money and requires the bank
to provide a secure place to store that money, the bank will offer the individual its most basic
product a savings bank account.
Main features of a Savings account:
(i) SB account may be opened in the name of any adult individual or jointly in the
name of two or more persons who is/are mentally sound to be payable either or
both or all of them or to the survivor or survivors.
(ii) The depositor may deposit cash in his/her account as often as he/she likes Cheques,
Drafts, PO, Divident warrant, Interest Warrant etc;
(iii) Withdrawals can be made either by withdrawal slips/forms or by cheques supplied
by the bank. In case of withdrawal slip, the bank may require the depositor to
attend the bank personally. A minimum balance of Tk. 500.00 is always kept in the
account.
(iv) In the event of a cheque being returned for want of funds, the bank may charge a
penalty of Tk. 50/- for each such presentation.
(v) Interest Calculation:
Interest accrued Expenditure Account (Int. Paid General) - Debit
monthly Interest Payable on (SB accounts) - Credit
Interest Applied Interest Payable on (SB accounts) - Debit
Half Yearly SB Account - Credit
(vi) No credit should be given if interest for any half year less than Tk. 1.00 (One);
(vii) Conditions for getting interest in SB Accounts:
 Savings account holder will get interest on monthly product basis;
 Product will be calculated on the basis of the lowest balance of the month
(Between 8th day and rest of the month);
 If customer withdraw more than 25% of the balance he/she will not get interest
for same month (Between 8th day and rest of the month).

3. Current Accounts
Current deposit means funds placed in a bank account that can be withdrawn at any time by
the depositor in full or partial amount. No current account shall be opened without proper
introduction by a known constituent of the bank whose introductory signature and number of
account shall be verified before the form is treated as in order. No action will be taken on
Account Opening Forms even if otherwise in order, but received by post unless these are in
respect of an account transferred from another branch of the bank. A current account may
opened by a businessman in the name of owner (in case of proprietorship business) or in the
name of Business firm. There is no restriction in transaction (amount and times) in current
account.
Manager must see that particulars in the account opening form are properly filled in and
signed by the constituent. If satisfied, he will order for opening the account putting his initial
on the form. Then the same will be entered in the Account Opening Register. The serial
number of account opening register will form the account number of the constituent. The
account number must be noted on the account opening form, Specimen Signature Card and if
any other relative paper pertaining to the Account Opening Form. The same number must also
be noted on the cheque book.
Each constituent should be advised of the number allowed to his account and requested to see
that it is quoted on each cheque issued by him and on each pay-in-slip. To ensure against
mistake in posting etc. due to similarity of names or due to name of the account holders having
been carelessly, it is better to brand all pay-in-slips but invariably in the cheque leaves with
the respective account numbers before supplying these to the client.
Characteristics of a Current Account:
(i) Any amount can be deposit with in the banking hour (subject to given TP);
(ii) Any amount may be withdrawn within the banking hour (subject to given TP);
(iii) Generally no interest is given against the credit balance of CD account;
(iv) Overdraft (OD) facilities may be allowed to a responsible client;
(v) Interest will be calculated on Debit balance of a CD account in daily product basis;
(vi) No pass book issued in CD account.

4. Opening of Current and Savings Accounts:

Savings account can opened in the name of person but, current account may opened in the
name of person (Owner of Business) or in the name business. For opening a current/Savings
bank account required to complete following formalities.

The person/organization entitles to open a bank account:

(i) 18 years old Bangladeshi nationality who Mentally sound.
(ii) Any foreigner living in Bangladesh legally.
(iii) Any Business organization operating as per present law of Bangladesh
(Proprietorship/Partnership/Pvt. Limited firm/Public Limited Company).
(iv) Any Educational, Social, Cultural, Religious and Political Organization
(School/College/University/Mosque/Temple/Madrsa/NGO/Club/Political Party
etc.)
(v) Any Government Office (Ministry/Department/Corporation/Local Administrative
Office/ Local Govt. Office etc.)
Who are not eligible for open a bank account:
(i) Any person is mentally imbalanced;
(ii) In the name of minor without legal guardian;
(iii) Any insolvent person/organization/business firms declared by court;
(iv) Most wanted by govt./court and any political/Social organization banned by
Govt./Court;
(v) Any person/organization can not open same type of account more than one in same
Branch (except Fixed Deposit and Recurring Deposit account).

Common formalities for open a Current/Savings Account:

 An individual/Business must be apply in prescribes form of the Bank;
 Signature/Thumb Impression of customer in Account opening form and
Signature Card must be taken in front of Bank officials.
  As per Head Office circular a registered mail must be send to the address
provided by the customer before issuing cheque book.
 Copy Personal Identification Card of the account holder (NID/Passport/
Driving License);
 A valid trade license for opening current account in the name of Business;
 A valid business license for opening current account in the name of special
types of business;
 2 copies of photograph of the account holder duly attested by the introducer;
 Copy of TIN/VIN/BIN certificate (if any).

Essential Elements of a Bank Account

Introducer : Introducer (Responsible account holder know the customer) is
mandatory for opening a new bank account.
(i) FD (Fixed Deposit) and RD (Recurring Deposit) account
holder can’t be introducer of Current of Savings account;
(ii) Savings Account holder can not introduce a Current
Account;
(iii) If any offence occurred by the customer then, there is no
liability of introducer legally. Duties and responsibilities
of the introducer is help to tress out the customer.

Nominee : Nominee is not mandatory for opening a Bank Account. Account

may be opened without nominee but, for avoiding adverse situation
bank preferred to take a nominee:
(i) Nominee must be minimum 18 years old.
(ii) Copy of NID/PP/Driving License of the nominee to be
taken.
(iii) Photograph of the nominee duly attested by the account
holder.
(iv) If nominee is minor then another guardian’s information,
copy of ID card and photograph are to be taken.

TP/KYC : TP means Transaction Profile and KYC means Know Your

Customer.
(i) For preventing money laundering TP is mandatory for
opening a Bank account.
(ii) TP is to be match with income level and profession of the
customer.
(iii) TP is to be updated time to time.
(iv) If customer want to violet the TP then, an application
/Clarification with proper document(s) also be taken.
(v) Proper KYC is a important preventive measure for
criminal offence by the customer.
5. Closing of a Bank Account:
Normally Bank Account is closed at the request of the Account holder for any reason
whatsoever. When requesting for closing of account, account holder must deposit his/her
unused cheque looks/leaves, if any. All dues of the client to be settled before closing
formalities is completed. Transfer of account is a sort of closure for the branch from where
account is being transferred. Bank also reserves the right of close any account without
assigning any reason on the basis of confidential report. Proper verification of the report is
Bank’s obligation. Bank account does not exist at the demise of Account holder.

6. Classification of Deposit
Primarily banks deposit are classified into two groups-
 Current deposit
 Savings deposit
Savings deposit maybe divided into two categories-
 Short term deposit and
 Long term deposit
Short term deposit
 Savings bank deposit
 Short notice deposit
Long term deposit
 Fixed deposit
 Deposit against different schemes
For accounting purpose of the whole bank and as a part of regulatory compliance deposits are
of two kinds-
 Demand Deposit
 Time Deposit
(a) Demand Deposit: Demand deposit means funds placed in a bank account that can be
withdrawn at any time by the depositor. Generally it is low interest bearing deposit or a zero
interest bearing deposit, which allows depositors to directly withdraw their money. Depositor
can issue check(s) up to their account balance at any time. Demand deposits can be on a
checking or a savings account, and withdrawals can be made either from an ATM or from the
bank’s cashier. The following accounts/ items are the part of demand deposit:

Item no. 1: Demand Deposit (General):

i. All Current Accounts except from banks;
ii. All Cash Credit Accounts (Credit balance only);
iii. Demand position of Savings Bank Account (Ratio varies from time to time);
iv. Overdue Fixed Deposit Account;
v. All deposit accounts other than from Banks (on demand);
vi. Unclaimed Balances account (in our case included in CD Account);
 vii. All other deposits payable to the public (customers) on demand, e.g. (1)
Demand Drafts Payable; (2) Telegraphic Transfer Payable; (3) Mail Transfer
Payable; (4) Pay Order Payable; (5) Bills Payable; and (6) Hajj Deposits.

Item no. 2: Deposits from Other Banks:

i. Borrowing from Banks (Call Deposits);
ii. Interest accrued on call Deposits, if any;
iii. Call Loans or Sale of TTs or DDs.

Item no. 3: Other Demand Deposits:

i. Margin on LC;
ii. Margin on Guarantee;
iii. Lockers’ Key/Security Deposits;
iv. Unclaimed Dividend/Dividend Payable;
v. Credit Balance of Adjustment Accounts;
vi. Security Deposit Accounts (amount deposited by the supplier of stationery,
furniture and fixtures, etc. as security deposit);
vii. Sundry Deposit Accounts except (1) Staff (employees) security deposit and (2)
interest payable on FDR and SND.
viii. Any other miscellaneous deposits payable on demand.

(b) Time Deposit: Time deposit means funds placed in a bank account for a specific time of
period. The funds in these accounts must be held for a fixed term and include the
understanding that the depositor can make a withdrawal only by giving notice. It is an interest-
bearing bank deposit account that has a specified date of maturity. The following
accounts/items are the part of time deposit:

Item no. 1: Time Deposit (General):

i. Fixed Deposits from customers other than Banks;
ii. Special notice deposits from customers other than Banks;
iii. Time portion of the Savings Bank Accounts (Ratio varies from time to time);
iv. Short-Term Deposits; and
v. Interest accrued on all the above deposits.

Item no. 2: Time Deposits from Banks:

i. All Deposits from Banks not payable on demand such as, (1) Fixed Deposits;
Special Notice Deposits; Short Term Deposits; and (4) Time portion of Savings
Bank Accounts
vi. Interest accrued on all the above deposits.
vii. Fixed Loans from Banks other than Bangladesh Bank.

Item no. 3: Others Time Deposits:

i. Employee (Staff) Provident Fund;
ii. Staff Pension Fund;
iii. Staff Gratuity Fund;
iv. Staff Security Deposits;
v. Staff Security or Guarantee Fund;
vi. Contribution towards Insurance Fund;
vii. Any other Miscellaneous Liabilities payable on notice or after a specified
period.