DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH

Name : G.Rajeswari.
Designation : Senior Lecturer.
Branch : Commercial and Computer Practice
Institute : Government Polytechnic, Srikakulam.
Year/Semester : V semester.
Subject : Banking.
Subject code : CCP 504(B).
Topic : Customer service in Banks
Duration : 50mts.
Sub topic : Banker’s duty in case of Married woman,
Joint Hindu Family and Clubs etc.

Teaching Aids : PPT,CCP-504(B).45

Animation 1
BANKER’S DUTY IN CASE OF MARRIED
WOMAN, JOINT HINDU FAMILIES, CLUBS
ETC.
Objectives:
On completion of this Topic, you would be
able to:
 Understand the banker’s duty in case of Married
Woman, Joint Hindu Families, Clubs Educational
Institutions etc.

CCP-504(B).45 2
Recap

In the previous class you have learnt the Banker’s

duty while opening accounts in the name of Joint
Stock companies. The banker will take the following
precautions.
 Before opening an account in the name of a Joint
Stock Company, a Banker should find out whether
the company has a legal existence or not.
 He has to verify the Certificate of Commencement
and Certificate of Registration for this purpose.

CCP-504(B).45 3
Recap

 The banker should also verify the Memorandum of

Association and Articles of Association
 Before granting loans, the banker should ask for which
purpose the amount is borrowed
 If the amount so borrowed is misappropriated by the
company for a different purpose, and the banker knows
it, then the banker will be liable for it
 The banker should register the charges on assets within
30 days of signing those charges

CCP-504(B).45 4
Recap

 If the banker has the personal account of the

authorized director, side by side with the company’s
account, then, the should not combine both the
accounts
 If the banker has any information regarding the
winding up of the company, he must immediately
stop the operation of the account
 The bankers has to act according to the instructions
of the liquidator if a company is winding up either
voluntarily or compulsorily

CCP-504(B).45 5
Known to unknown

 The usual customers of banks are majors

(exceeding 18 years) who have creditworthiness
 But there are important special types of customers
for the bank
 Can you say some of the special customers of a
bank?
 Can a married woman open a bank account?
 If yes, can a bank give a loan to her?

CCP-504(B).45 6
 What is a Joint Hindu Family?
 Have you come across the word Joint Hindu
Family any time?
 Can a Joint Hindu Family have a bank account?
 Clubs, Educational Institutions, Charitable
Institutions come under which category?
 Can we call them profit earning organizations?
 Can a banker open an account in the name of the
above organizations?

CCP-504(B).45 7
BANKER’ DUTY IN CASE OF MARRIED
WOMAN:

 According to Indian Contracts Act, a married

woman is competent to enter into contracts.
 A bank account can be opened in the name of a
married woman.
 She has power to draw cheques and sufficient
discharge.

CCP-504(B).45 8
BANKER’ DUTY IN CASE OF MARRIED
WOMAN:

 A banker should be careful while granting loans or

allowing overdrafts to a married woman.
 This is essential because the husband’s liability for
wife’s debts arises only under the following
circumstances.

CCP-504(B).45 9
BANKER’ DUTY IN CASE OF MARRIED
WOMAN:

1. Where the husband has given his consent or authority.

2. Where the debt is incurred for the purchase of
necessities of life, in case the husband defaults in
providing the same to his wife.

CCP-504(B).45 10
BANKER’ DUTY IN CASE OF MARRIED
WOMAN:

A banker will have to keep the following points in

mind while granting a loan or an overdraft to a
married woman.
1. The husband of a married woman is not liable
for debts contracted by her except for
necessaries of life.

CCP-504(B).45 11
BANKER’ DUTY IN CASE OF MARRIED
WOMAN:

1. So the banker should not lend money to a

married woman simply because her
husband had sufficient property.
2. If she does not have separate property, it
will be difficult for the banker to recover the
overdraft granted to her.

CCP-504(B).45 12
BANKER’ DUTY IN CASE OF MARRIED
WOMAN:

1. If she has a separate property, the banker must

find out the nature of her right to that property.
2. She may not have the right to sell the property,
although she may enjoy the income from the
property.

CCP-504(B).45 13
BANKER’ DUTY IN CASE OF MARRIED
WOMAN:

1. If a married woman applies for a loan, the banker

must examine whether there is any undue
influence exercised by her husband.
2. She should be appraised of her liability for the
loan she contracts.
3. She may be advised to contract her lawyer.

CCP-504(B).45 14
Banker’s Duty In Case Of Joint Hindu
Family

 A Joint Hindu Family firm is an institution peculiar to

our country.
 The firm is managed by the Karta.
 When the Karta dies the business also devolves on
the legal heirs just like any other property.
 Every male member born into the family becomes a
co-partner from the time of his birth.

CCP-504(B).45 15
Banker’s Duty In Case Of Joint Hindu
Family
 The rights of the members are determined according
to the Hindu Law.
 A banker can open an account in the name of a Joint
Hindu Family Firm.
 While opening the account, the banker must ask for
the names of the other members and other relevant
particulars.

CCP-504(B).45 16
Banker’s Duty In Case Of Joint Hindu
Family

 The declaration in this connection is made by the

Karta and other major members of the firm.
 The banker should watch the dates of birth of
members of the family, and obtain the signatures of
the members who attain majority.

CCP-504(B).45 17
Banker’s Duty In Case Of Joint Hindu
Family
 Further the members who attain majority must be
required to ratify the transactions which took place
during their minority.
 While granting loans to Joint Hindu Family firms,
the banker should take the signatures of the Karta
as well as other majors of the family.
 They must also be made personally responsible for
such debts.

CCP-504(B).45 18
Banker’s Duty In Case Of Joint Hindu
Family

 All the members are liable for the debts incurred

for the management of the firm, for family
expenses and for the repayment of old debts
only.
 So the banker must enquire the purpose for which
the loan is taken.

CCP-504(B).45 19
Banker’s duty in case of Educational
Institutions, Clubs and Other Associations

 Educational Institutions, Clubs may be registered under

the Societies Registration Act or the Indian Companies
Act.
 If they are not so registered, the banker should keep in
mind certain important matters.
 An executive committee elected by the members
manages these associations.
 A banker conducts his business with the executive
committee .

CCP-504(B).45 20
Banker’s duty in case of Educational
Institutions, Clubs and Other Associations

 He will not have direct relationship with the

members.
 The Secretary and the Treasurer will generally have
the power to open a bank account and to spend the
money of the association.
 The banker should examine the resolution of the
executive committee appointing him as banker.

CCP-504(B).45 21
Banker’s duty in case of Educational
Institutions, Clubs and Other Associations

 He should conduct the banking operations in

accordance with the mandate contained in the
resolution.
 The banker should particularly ascertain the persons
who are authorised to issue cheques.

CCP-504(B).45 22
Banker’s duty in case of Educational
Institutions, Clubs and Other Associations

 A banker should be familiar with the constitution

as well as the bye-laws of these associations.
 The banker should obtain a list of the members of
the executive committee.

CCP-504(B).45 23
Banker’s duty in case of Educational
Institutions, Clubs and Other Associations
 He should watch the changes in the membership of
this committee.
 If there are any changes in the rights of the
members of the existing committee, the banker
must keep a note of them.

CCP-504(B).45 24
Banker’s duty in case of Educational
Institutions, Clubs and Other Associations
 The banker should ascertain the bye-laws
whether the association has the right to borrow
 Members are not liable for the debts incurred
 If the treasurer borrows money for the
association, he will be personally responsible for
the debt

CCP-504(B).45 25
Banker’s duty in case of Educational
Institutions, Clubs and Other Associations

 When the executive committee authorised the

borrowing, then its members are also become
liable.
 The banker must obtain the surety of persons of
sound financial standing.

CCP-504(B).45 26
Banker’s duty in case of Educational
Institutions, Clubs and Other Associations

 When the person authorised to draw cheques dies,

the bank must stop the account.
 His heirs do not have the authority to conduct the
affairs of the association.

CCP-504(B).45 27
Summary

 A married woman can open a bank account.

 While granting loans or advances to a married
woman, the banker should be very careful.
 The banker cannot grant loans to a married woman
except for her necessaries of life.
 A bank account can be opened in the name of a
Joint Hindu Family.

CCP-504(B).45 28
Summary

 Karta is the head of the family.

 While granting loans, the banker should take the
consent of all the major members of the family
including Karta.
 Clubs, educational institutions can open a bank
account.
 When the person authorised to draw cheques
dies, the bank must stop of operation of the
account.
CCP-504(B).45 29
Quiz

1. Married woman can enter into contracts.

a) Yes
b) No

CCP-504(B).45 30
Quiz

2. Bank can grant loans to married woman in the

following cases.
a) For necessaries of life
b) for doing business
c) to buy Television
d) None

CCP-504(B).45 31
Quiz

3. Who is the head of Joint Hindu Family?

a) Karta
b) Majors of the family
c) Old people
d) All the above

CCP-504(B).45 32
Quiz

4. Before granting loans to clubs etc., the

banker should verify the following.
a) Bye-laws
b) Order
c) Letter of Credit
d) All the above

CCP-504(B).45 33
FREQUENTLY ASKED QUESTIONS

 Explain the duties of a banker in the following

cases:
a)Married Woman
b)Clubs, Charitable Institutions etc.
c)Joint Hindu Family

CCP-504(B).45 34