Competency 4
4 Process Customer Accounts
Introduction
Dear learners: This unit describes the performance outcomes, skills and knowledge required to
identify customer needs and process customer financial accounts. Providing superior customer
service means meeting customers’ needs by providing them with the products and services they
want or by providing effective solutions to their problems. In order to do that, customer service,
customer care, and call center representatives must be able to accurately and completely identify
customers’ needs. The objective of this course is help trainees identify and meet customers’
needs, an important step in creating loyal customers. At the end of this training course trainees
will be able to recognize the importance of correctly identifying customers’ needs, ask the right
questions to accurately identify needs, identify and take advantage of cross-selling opportunities,
and present products, services, and solutions that meet customers’ needs.
I hope you will find the unit very interesting and you are also expected to do the activities.
Objectives
 Provide Information to customers to assist in the selection of an appropriate product
which outlines product features, matches products to customer needs, describes the
cost of operation and the conditions of the accounts
 Assist Customers when completing relevant documentation for selected services and
products
 Provide Information to assess for accuracy and sufficiency according to the standard
organization procedures
 Verify Completed documentation for accuracy and deposits are accepted ensuring
that receipts and certificates are issued
 Process New applications and transactions in accordance with organization’s policies
and procedures to ensure the timely and accurate completion of the task
 Verify Completed documentation for accuracy and applications for transfer or closure
are processed in accordance with organization’s policies and procedures to ensure the
timely and accurate completion of the task
 Follow up Customer queries or complaints about the operation of the service with
appropriate personnel according to standard procedures
 Provide Reports on account activity in line with standard policies and procedures with
any exception reports
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Learning outcome #1
1. Identify customer account needs
1.1. Requests for information on the range, options and features of account services
available are addressed in a timely, accurate and comprehensive manner, or referred if
necessary to other authorized personnel
Identifying Customer Needs
Providing superior customer service means meeting customers’ needs by providing them with
the products and services they want or by providing effective solutions to their problems. In
order to do that, customer service, customer care, and call center representatives must be able to
accurately and completely identify customers’ needs. The objective of this course is help trainees
identify and meet customers’ needs, an important step in creating loyal customers. At the end of
this training course trainees will be able to recognize the importance of correctly identifying
customers’ needs, ask the right questions to accurately identify needs, identify and take
advantage of cross-selling opportunities, and present products, services, and solutions that meet
customers’ needs.
 Authorized personnel may include:
 dispute resolution officer
 employees
 supervisors and managers
Why "Identifying Customer Needs" Matters

Correctly identifying customers' needs is essential for ensuring customer satisfaction and
loyalty. If you fail to properly identify customers' needs, or if you are indifferent to their
needs, they will take their business elsewhere.

Customers have unique needs. Assuming what a customer wants based on previous
clients can drive the customer away.

Identifying customers' needs allows representatives to cross-sell related products or
services. Cross-selling can make the original purchase better, easier to use, or more
versatile, and is financially beneficial to the organization.

Often, customers either aren't clear about what they need, or they don't really know what
they want. Effective customer service representatives need to be trained to ask the right
questions, listen, and tailor suggestions in order to assist customers satisfactorily.

Identifying clients' needs creates satisfied customers, and satisfied customers are less
likely to have reason to enter into disputes with your organization or contemplate legal
action.
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
To ensure customer satisfaction, you have to correctly identify customers' needs.

To identify needs, you have to both listen and ask the right questions.

After identifying needs, always check for additional or related needs.
 Use your knowledge and experience to identify and present the right products, services,
and solutions to meet your customers' needs.
Identifying Customer Needs: Keys to Success
Not identifying customer needs correctly is just like building a house on a weak foundation. Why
would you knowingly do that? A good builder will consult an expert that then conducts soil
surveys and engages contractors to properly set a solid foundation. Your customers are looking
for businesses that understand their requirements. They are the experts on their problems and you
need to ask about these, before you develop new offerings.
Are you listening to your market?
The importance of market research cannot be underestimated. With so many new products and
services failing, we need to establish a solid foundation as early as possible. Of course, poor
market acceptance can happen for many different reasons.
Just look at the product development and launch cycle and you’ll see that at any of these points
there are challenges: gaining customer insight, understanding the competitive landscape, design
and development you products or services, channel alignment, rollout planning and execution,
and promotion.
But you need to start with a sturdy foundation prior to concept development. Proper customer
data mining is the key.
Activity 1
Why "Identifying Customer Needs" Matters
______________________________________________________________________________
______________________________________________________________________________
_____________________________________________________________________________
1.2. Information is provided to customers to assist in the selection of an appropriate product which
outlines product features, matches products to customer needs, and describes the cost of operation
and the conditions of the accounts
 Information to customer may include descriptions of:
 accounts geared to the needs of particular groups such as:
 customer deeming accounts
 youth accounts
 investment accounts
 retirement accounts
 Savings accounts.
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Identifying customers and meeting their needs
It's an obvious statement to say that market research is about listening to your customers. When
identifying customer needs it is very important to ask the right questions, listen, and ask more
questions based on the answers. Then absorb what you hear.
Here are the three keys to fully know your customers and set your foundation on solid footing:
1. How and Why – this is the wants and needs analysis. It goes well beyond asking what
kind of features they’d like to see. You need to find out how they currently operate and
why. Also find out how they measure success and why they do it that way. By the way,
don’t confuse needs and wants – you may find out there is a need for your offering, but
providing it is no guarantee you'll find demand;
2. Core Values – the next step in customer data mining is determining what would make
their life easier. The natural assumption here is that it is related to the product you are
proposing, but dig deeper. Find the emotional connections that will allow you to see how
your product can fit into their personal lifestyle and if selling to businesses, life within
their company. You may be surprised what you discover that will help you improve your
product and position it in the market;
3. Through Your Customers’ Eyes – certainly you’ve done a competitive analysis but the
best sources of information are your target customers. An understanding of the
competitive landscape from the expert, your potential customer and user, is a great way to
gather information on the competition. You’ll discover their strengths and weaknesses
and what customers would like to change.
The importance of market research in identifying customer needs before your go to market is
critical. Let your prospects and customers are your secret weapon.
1. Identify Customer Account Needs
The activities performed to satisfy customers’ needs include:
 Respond to any requests from customers for information on the variety options and types
of account services available are given in a timely, accurate and comprehensive manner,
or referred if necessary to other authorized personnel
 Provide information to customers to assist in the selection of an appropriate product
which outlines product features, matches products to customer needs, describes the cost
of operation and the conditions of the accounts.
 Assist customers when completing relevant documentation for selected services and
products.
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Identifying customer needs
You will only gain a competitive edge if you have correctly identified your customer needs. In
order to identify customer needs and make use of this information you will need to do three
things:
1. Communicate with your customers and find out how you can satisfy their needs better.
2. Establish ways to record and interpret customer feedback.
3. Use this information when making important decisions.
Customer Identification and Record-keeping/account opening Rules
1. Financial institutions should not keep nameless accounts or accounts in obviously fictitious
names: they should be required (by law and/or by regulations) to identify, on the basis of an
official or other reliable identifying document, and record the identity of their clients, when
establishing business relations or conducting transactions.
For instance while opening of accounts or passbooks, renting of safe deposit boxes, performing
large cash transactions.
2. Financial institutions should take reasonable measures to obtain information about the true
identity of the persons on whose behalf an account is opened or a transaction conducted if there
are any doubts as to whether these clients or customers are acting on their own behalf.
In order to fulfill identification requirements concerning legal entities, financial Institutions
should, when necessary, take measures:
(i) to verify the legal existence and structure of the customer by obtaining either from a public
register or from the customer or both, including information concerning the customer's name,
legal form, address, and others.
(ii) to verify that any person appearing to act on behalf of the customer is so authorized and
identify that person.
3. Financial institutions should maintain, for at least ten years, all necessary records on
transactions, both domestic and international, to enable them to comply quickly with information
requests from the competent authorities.
Such records must be sufficient to permit reconstruction of individual transactions (including the
amounts and types of currency involved if any) so as to provide, if necessary, evidence for
hearing of criminal behavior.
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Financial institutions should keep records on customer identification (e.g. copies or records of
official identification documents like passports, identity cards, driving licenses or similar
documents), account files and business correspondence for at least ten years after the account is
closed.
4. Financial institution should pay special attention to money laundering threats inherent in new
or developing technologies while customers open an account.
5. If financial institutions suspect that funds stem from a criminal activity, they should be
required to report promptly their suspicions to the competent authorities.
6. Financial institutions, their directors, officers and employees, should not be allowed to warn
their customers when information relating to them is being reported to the competent authorities.
7. Financial institutions should pay special attention to all complex, unusual large transactions,
and all unusual patterns of transactions, which have no apparent economic or visible lawful
purpose. The background and purpose of such transactions should, as far as possible, be
examined, the findings established in writing, and be available to help supervisors, auditors and
law enforcement agencies.
8. Financial institutions should develop programs against money laundering. These programs
should include, as a minimum:
(i) the development of internal policies, procedures and controls, including the designation of
compliance officers at management level, and adequate screening procedures to ensure high
standards when hiring employees;
(ii) an ongoing employee training programme; and
(iii) an audit function to test the system.
9. Financial institutions should provide appropriate Information to customer which may include
descriptions of the account service available (such as Saving account, current/demand account,
youth accounts, retirement accounts etc) and its requirements to open thus.
10. If customers request is out of our authority or not clear refer them appropriate authorized
personnel such as senior staffs, supervisors, manager or others.
Lack of awareness of clients’ needs
Most bank Web sites have a comprehensive list of all the products and services they offer. Only
a fraction of these may be appropriate for any given client, yet there’s no easy way to determine
which those are, other than to read through all the documentation or contact a service
representative. Not only is the latter option more expensive for the bank, but often the bank’s
representatives are not educated enough about all the available offerings to provide adequate
assistance.
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1.3. Assisting Customers when completing relevant documentation for selected services and
products
In order to identify customer needs and make use of this information you will need to do three
things:
1. Communicate with your customers and find out how you can satisfy their needs better.
2. Establish ways to record and interpret customer feedback.
3. Use this information when making important decisions about marketing, buying,
merchandising and selling.
Customer expectations
Your customers will have differing needs and wants, however customers have common
expectations. The importance of these expectations may vary, depending on the type of product
or service they require. Common expectations are:
Service
Customers expect a level of service that they think is appropriate for their type of purchase.
Someone who makes a small, spontaneous purchase may have a lesser service need that a
customer who makes a large purchase.
Price
The cost of everything we purchase is becoming increasingly important, therefore the price
component becomes a vital issue. The temptation for a business to compete on price is
financially dangerous. It is a practice that should be avoided unless you have set out to be a
‘discounter’.
Alternatives to price cutting can include ‘value adding’ (can you add value to your products or
services to make your business more competitive?).
Quality
Customers have expectations of quality and durability. They are less likely to question price if
they are doing business with a company that has a reputation for quality.
Action
Customers need action when a problem or question arises. Everyone has a need for recognition
and like to be treated as a ‘priority’.
Appreciation
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Customers need to know that we appreciate their business. Saying ‘thank-you’ through words
and actions is a good starting point. Let customers know that you are glad they have chosen to do
business with you - this conveys a positive message and encourages them to come back.
Your customers will have expectations of how their needs should be met. Find out what their
expectations are and exceed them with exceptional customer service - this is a sure way of
winning ‘life-long’ advocates for your business!
Remember that in order to improve your business profitability you will need to:
• Become familiar with your customers and establish trusting relationships with them.
• Ask your customers what their expectations are.
• Live up to their expectations and plan to exceed them whenever possible.
• Be consistent and courteous when serving your customers.
Activity 2
What are you doing to identify customer needs?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
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Learning outcome #2
2. Open customer account
2.1. Potential account holders are interviewed to gather information required for the
opening of accounts with applicant identified for security purposes according to
organizational procedures
Information provided to customer may include descriptions of:
 accounts geared to the needs of particular groups such as:

customer deeming accounts

youth accounts
 investment accounts
 retirement accounts
 savings accounts

Information required for opening accounts may include:
 amount of initial deposit
 other signatories to the account
 primary account holder's:
 name
 address
 contact details
 purpose for which the account will be used
 required links to other accounts held.
2. Open Customer Account
Opening an account—such as a checking, trading, retirement plan account—is often the first
interaction a bank or brokerage firm has with its clients, so this process is clearly an important
one when it comes to acquiring new business.
For individual institutions, the key to ensuring that existing clients continue to open new
accounts is to make the experience as easy and convenient as possible. After all, if it’s just as
difficult to open a new account with their current bank as with one they have no relationship
with, what incentive do they have to stay with the current one, especially when the one down the
street may be offering better interest rates or lower transaction fees?
Unfortunately, the truth is that most companies today have not made it easy or convenient for
their clients to open new accounts and are thus risking the loss of highly profitable customers.
Generally the process for opening customer account includes:
 Potential account holders are interviewed to gather information required for the opening
of accounts with applicant identified for security purposes according to organizational
procedures.
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 Information provided is assessed for accuracy and sufficiency according to the standard
organization procedures.
 Completed documentation is verified for accuracy and deposits are accepted ensuring that
receipts and certificates are issued.
 Information is provided to customer about the processes for activating the account
including the timeframe and mechanisms for receiving transaction cards or deposit books
and the most cost effective way to use the account.
Lack of consistency or visibility across product lines and channels
In many financial firms, the various lines of business have grown independently, and each one
has developed its own process for opening a new account, so employees and customers are
usually starting from scratch with each one. The problem is worsened when you factor in all the
various channels as well—online, call center, in-branch—all of which have their own variations
on the process. And, since policies and procedures change frequently due to organizational
requirements or regulatory mandates, it’s virtually impossible for staff to even know what the
current correct process is.
Incompatible data storage tower
Just as processes have been developed independently across product lines and channels, so have
the back-end systems used to store the data required for these processes. And because most
legacy systems can’t talk to each other without expensive programming resources getting
involved, data on existing customers isn’t available to the person trying to open an additional
account, leading to the dreaded—and frequent—complaint, “But I’ve already given you that
information.
What firms need to do?
When it comes to opening accounts, financial services institutions can differentiate themselves
from their competitors and reduce turnover by focusing on three main areas of process
improvement:
1. Provide convenient and attractive options for opening accounts
As stated earlier, clients have many choices when it comes to the banking and capital markets
industries. Therefore, companies must give their clients exciting incentives to continue to do
business with them. While offering discounted fees or higher interest rates may provide some
incentive, a more profitable approach is to add value for clients in the form of saving them time
and effort.
When it comes to account opening, firms can most effectively help their clients by:
• Working with them to determine their short- and long-term financial goals and then suggesting
the types of accounts that are most appropriate for them.
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• Offering personalized, real-time help from online advisors regarding account types and
available options.
• Allowing clients to apply for accounts through their preferred channel
• Simplifying and accelerating the information collection process for instance credit worthiness
of employees.
• Protecting sensitive and confidential data from unauthorized access or alteration
2. Make it easier for employees to transact business
Institutions must also think about:
• Providing a central point of access to essential tools, including forms, marketing materials, and
news flashes, for helping clients open accounts
• Making it easier to initiate, follow up on, and complete transactions
• Providing access to these tools even when a representative or advisor is disconnected, which
enables them to assist clients from any location, such as a customer site?
3. Improve efficiencies to eliminate costly delays and errors
The institution needs to focus on processing the request as quickly and efficiently as possible in
order to strong competitor.
Not only will this increase client satisfaction, but it will also enable company employees to use
their time for more valuable activities, such as assisting customers or analyzing reports, rather
than simply entering data into systems. The key priorities for process improvement are:
• Developing automated processes with built-in intelligence to enable straight-through
processing for routine requests, while still allowing for exception handling.
• Using rules to drive processes, which improves response times and increases process
consistency and transparency
• Supporting the ability to choose between digital signatures and wet signatures without
interrupting the processing of the application.
How to open a customer account
We operate a customer account system for customers who regularly request work from us, e.g.
Land Information Memorandums (LIMs) or property information (files and reports).
To open an account, download the
When completing your application, please ensure that:
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 you complete the application form in full so we can assess your credit and finance details
correctly
 you sign the application form, acknowledging that you accept the terms and conditions of
credit
 You supply the appropriate documentation with your application (refer below).
Personal
customers

Companies



Charities
societies
copy of photo identification, e.g. drivers licence, or
verification of Auckland Council ratepayer information if appropriate, e.g.
address, last payment date, etc
certificate of incorporation
copy of the photo identification of the person signing the form, e.g. the
director of the company
and
 registration certificate (charities)
 incorporation certificate (societies)
 copy of the photo identification of the person signing the form.
Customer Account could be opened for natural persons or institutions.
A. Natural Persons
For natural persons the following information should be obtained, where applicable:









legal name and any other names used (such as original name);
correct permanent address (the full address should be obtained; a Post Office box number is not
sufficient);
telephone number, fax number, and e-mail address;
date and place of birth;
nationality;
occupation, public position held and/or name of employer;
an official personal identification number or other unique identifier contained in an unexpired
official document (e.g. passport, identification card, residence permit, social security records,
driving license) that bears a photograph of the customer;
type of account and nature of the banking relationship;
signature.
The bank should verify this information by at least one of the following methods:

confirming the date of birth from an official document (e.g. birth certificate, passport, identity
card, social security records);
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
confirming the permanent address (e.g. utility bill, tax assessment, bank statement, a letter from
a public authority);
 contacting the customer by telephone, by letter or by e-mail to confirm the information supplied
after an account has been opened (e.g. a disconnected phone, returned mail, or incorrect e-mail
address should warrant further investigation);
 confirming the validity of the official documentation provided through certification by an
authorized person (e.g. embassy official, lawyer public).
B. Institutions
The underlying principles of customer identification for natural persons have equal application to
customer identification for all institutions.
The term institution includes any entity that is not a natural person. In considering the customer
identification guidance for the different types of institutions, particular attention should be given to
the different levels of risk involved.
I. Corporate Entities
For corporate entities (i.e. corporations and partnerships), the following information should be
obtained:
o
o
o
o
o
o
name of institution;
principal place of institution's business operations;
mailing address of institution;
contact telephone and fax numbers;
some form of official identification number, if available (e.g. tax identification number);
the original or certified copy of the Certificate of Incorporation and Memorandum and
Articles of Association;
o the resolution of the Board of Directors to open an account and identification of those
who have authority to operate the account;
o nature and purpose of business and its legitimacy.
The bank should verify this information by at least one of the following methods:
o for established corporate entities - reviewing a copy of the latest report and
accounts (audited, if available);
o conducting an enquiry by a business information service, or an undertaking from
a reputable and known firm of lawyers or accountants confirming the documents
submitted;
o undertaking a company search and/or other commercial enquiries to see that the
institution has not been, or is not in the process of being, dissolved, struck off,
wound up or terminated;
o utilizing an independent information verification process, such as by accessing
public and private databases;
o obtaining prior bank references;
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o visiting the corporate entity, where practical;
o contacting the corporate entity by telephone, mail or e-mail.
N.B. The bank should also take reasonable steps to verify the identity and reputation of any agent
that opens an account on behalf of a corporate customer, if that agent is not an officer of the
corporate customer.
II. Other Types of Institution
The following information should be obtained (for other than corporation/partnership):
o
o
o
o
name of institution;
mailing address;
contact telephone and fax numbers;
some form of official identification number, if available (e.g. tax identification
number);
o description of the purpose/activities of the account holder (e.g. in a formal
constitution);
o copy of documentation confirming the legal existence of the account holder (e.g.
register of charities).
The bank should verify this information by at least one of the following:
o obtaining an independent undertaking from a reputable and known firm of
lawyers or accountants confirming the documents submitted;
o obtaining prior bank references;
o accessing public and private databases or official sources.
A. Natural Persons
. For natural persons the following information should be obtained, where applicable:

legal name and any other names used (such as maiden name);

correct permanent address (the full address should be obtained; a Post Office box number
is not sufficient);

telephone number, fax number, and e-mail address;

date and place of birth;

nationality;

occupation, public position held and/or name of employer;

an official personal identification number or other unique identifier contained in an
unexpired official document (e.g. passport, identification card, residence permit,
social security records, driving licence) that bears a photograph of the customer;

type of account and nature of the banking relationship;

signature.
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. The bank should verify this information by at least one of the following methods:

confirming the date of birth from an official document (e.g. birth certificate,
passport, identity card, social security records);

confirming the permanent address (e.g. utility bill, tax assessment, bank statement,
a letter from a public authority);

contacting the customer by telephone, by letter or by e-mail to confirm the
information supplied after an account has been opened (e.g. a disconnected phone,
returned mail, or incorrect e-mail address should warrant further investigation);

confirming the validity of the official documentation provided through certification
by an authorised person (e.g. embassy official, notary public).
The examples quoted above are not the only possibilities. In particular jurisdictions there may be
other documents of an equivalent nature which may be produced as satisfactory evidence of
customers' identity.
Financial institutions should apply equally effective customer identification procedures for nonface-to-face customers as for those available for interview. . From the information provided ,
financial institutions should be able to make an initial assessment of a customer's risk profile.
Particular attention needs to be focused on those customers identified thereby as having a higher
risk profile and additional inquiries made or information obtained in respect of those customers
to include the following:

evidence of an individual's permanent address sought through a credit reference
agency search, or through independent verification by home visits;

personal reference (i.e. by an existing customer of the same institution);

prior bank reference and contact with the bank regarding the customer;

source of wealth;

verification of employment, public position held (where appropriate).
For one-off or occasional transactions where the amount of the transaction or series of linked
transactions does not exceed an established minimum monetary value, it might be sufficient to
require and record only name and address.
It is important that the customer acceptance policy is not so restrictive that it results in a denial
of access by the general public to banking services, especially for people who are financially or
socially disadvantaged.
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B. Institutions
The underlying principles of customer identification for natural persons have equal application
to customer identification for all institutions. Where in the following the identification and
verification of natural persons is involved, the foregoing guidance in respect of such persons
should have equal application.
The term institution includes any entity that is not a natural person. In considering the customer
identification guidance for the different types of institutions, particular attention should be given
to the different levels of risk involved.
I. Corporate Entities
For corporate entities (i.e. corporations and partnerships), the following information should be
obtained:
o
name of institution;
o
principal place of institution's business operations;
o
mailing address of institution;
o
contact telephone and fax numbers;
o
some form of official identification number, if available (e.g. tax identification
number);
o
the original or certified copy of the Certificate of Incorporation and Memorandum
and Articles of Association;
o
the resolution of the Board of Directors to open an account and identification of
those who have authority to operate the account;
o
nature and purpose of business and its legitimacy.
The bank should verify this information by at least one of the following methods:
o
for established corporate entities - reviewing a copy of the latest report and accounts
(audited, if available);
o
conducting an enquiry by a business information service, or an undertaking from a
reputable and known firm of lawyers or accountants confirming the documents
submitted;
o
undertaking a company search and/or other commercial enquiries to see that the
institution has not been, or is not in the process of being, dissolved, struck off, wound
up or terminated;
o
utilizing an independent information verification process, such as by accessing public
and private databases;
o
obtaining prior bank references;
o
visiting the corporate entity, where practical;
16
o
contacting the corporate entity by telephone, mail or e-mail.
The bank should also take reasonable steps to verify the identity and reputation of any agent
that opens an account on behalf of a corporate customer, if that agent is not an officer of
the corporate customer.
The following information should be obtained in addition to that required to verify the identity of
the principals:
o
name of account;
o
mailing address;
o
contact telephone and fax numbers;
o
some form of official identification number, if available (e.g. tax identification number);
o
o
description of the purpose/activities of the account holder
constitution);
(e.g. in a formal
copy of documentation confirming the legal existence of the account holder (e.g.
register of charities).
The bank should verify this information by at least one of the following:
o
obtaining an independent undertaking from a reputable and known firm of lawyers or
accountants confirming the documents submitted;
o
obtaining prior bank references;
o
accessing public and private databases or official sources.
Activity 3
Information provided to customer may include descriptions of:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_____________________________________________________________________________
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2.2. Information provided is assessed for accuracy and sufficiency according to the standard
organization procedures
The accuracy and sufficiency of information provided includes ensuring:
 authenticity of signatures
 checks against or links to existing customer account information
 completeness of documentation
 provision of sufficient documentary evidence (points) to meet the requirements for
establishing a new account
2.3. Completed documentation is verified for accuracy and deposits are accepted ensuring that
receipts and certificates are issued
A current account is a form of deposit account that allows, among others, payment by way of
cheques. This booklet highlights the basic requirements relating to the operation and
maintenance of a current account as well as some useful tips to safeguard your account.
WHO CAN OPEN A CURRENT ACCOUNT
Different banks have different criteria for opening a current account. Generally, banks would
only consider the application if the applicant is: - 18 years old or above - not a bankrupt - of
sound mind and has the mental and physical capacity to operate the account properly For
business owners and professional entities, they must ensure that they are properly registered with
the relevant authorities. However, a bank has the discretion to accept or decline an application to
open the account
REQUIREMENTS TO OPEN A CURRENT ACCOUNT –
You must be physically present at the bank - You need an introducer acceptable to the bank. This
is to enable the bank to obtain references on you. Normally, the introducer is an existing
customer or someone known to the bank - You need to provide certain identification documents
such as your identity card or driving license to substantiate your identity - You need to put an
initial deposit as specified by your bank In addition, for a business / society / club / association /
professional registered with professional bodies, you need to provide the business registration,
board resolution, memorandum and articles of association, share allotment form and list of
directors and secretary (for company account) or list of current board/committee members (for
society account).
TYPES OF CURRENT ACCOUNTS
As an individual, you can open the following current accounts:
 Personal current account under your name; or
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 Joint current account which is operated by you jointly with others, e.g. – Any one of the
accountholders to operate the account (e.g., for an account opened by A and B, either A
or B is required to sign)
– All accountholders are needed to operate the account (e.g., for an account opened by A and B,
both A and B are required to sign) for a business/company, the current account will be in the
name of the business and it is operated by nominated signatory (ies).
USAGE OF A CURRENT ACCOUNT
You can start using your current account once it is approved by your bank. Withdrawals from
your account (subject to the available balance in the account) can be made either through
cheques or ATM cards (issued to individual accountholders only) or by electronic means. There
is no need to maintain the initial deposit amount i.e. the minimum amount required to open the
account, once your account is in operation. You do not earn interest on the balance in your
current account. However, for a hybrid account, that is, an account that combines the features of
both a current and savings account, you may earn interest from the savings portion of the
account.
Savings Accounts
These are intended to provide an incentive for you to save money. You can make deposits and
withdrawals, but usually can’t write checks. They usually pay an interest rate that’s higher than a
checking account, but lower than a money market account or CD. Some savings accounts have a
passbook, in which transactions are logged in a small booklet that you keep, while others have a
monthly or quarterly statement detailing the transactions. Some savings accounts charge a fee if
your balance falls below a specified minimum.
Basic Checking Accounts
Sometimes also called “no frills” accounts, these offer a limited set of services at a low cost.
You’ll be able to perform basic functions, such as check writing, but they lack some of the bells
and whistles of more comprehensive accounts. They usually do not pay interest, and they may
restrict or impose additional fees for excessive activity, such as writing more than a certain
number of checks per month.
Bank account
A bank account is a financial account between a bank customer and a financial institution. A
bank account can be a deposit account, a credit card, or any other type of account offered by a
financial institution. The financial transactions which have occurred within a given period of
time on a bank account are reported to the customer on a bank statement and the balance of the
account at any point in time is the financial position of the customer with the institution. a fund
that a customer has entrusted to a bank and from which the customer can make withdrawals.
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Account types
Bank accounts may have a positive, or credit balance, where the bank owes money to the
customer; or a negative, or debit balance, where the customer owes the bank money.[1]
Broadly, accounts opened with the purpose of holding credit balances are referred to as deposit
accounts; whilst accounts opened with the purpose of holding debit balances are referred to as
loan accounts. Some accounts can switch between credit and debit balances.
Some accounts are categorized by the function rather than nature of the balance they hold, such
as savings account.
All banks have their own names for the various accounts which they open for customers.
Types of accounts

Deposit account
o Checking
account
o Current account
o Personal account
o Transaction
deposit


Savings account is an interest bearing deposit that CBE renders for physical
and legal persons (Individuals, organizations and associations) who can fulfill
the Bank’s requirement and are legal.

The minimum balance to open a savings account should be Birr 25.00.
However, Savings account may be opened and maintained with zero balance
for one month.

Within one month, the account holder should credit at least a minimum of
Birr 25.00 in his/her account. However, if the account is not credited in the
specified period, it should be closed following the normal account closing
procedure.
Savings account
o Individual
Savings
Account
o Time
deposit/certifica
te of deposit
o Tax-Exempt
Special Savings
Account
o Tax-Free
Savings
Account
o Money market
account
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
Other accounts
o Loan account
o Joint account
o Low-cost
account
o Numbered bank
account
o Negotiable
Order of
Withdrawal
account
Feature
 The minimum balance to open a savings account is birr 25.00. Savings account, however,
may be opened and maintained with zero balance for one month.
 Savings account opened and maintained with zero balance will be closed unless the
minimum amount of birr 25.00 is deposited within the specified period.
 Can be opened and/or operated by a legal agent in the name of principal, against
producing a power of attorney.
 No maximum balance limit
 Individuals, organizations, financial institutions, associations, clubs,etc can open and use
this account
 Can be operated jointly(AND or AND/OR)
 Can be opened for the benefit of
A.
Minors( under aged individuals)
B.
Interdicted persons
C.
Bankrupt firms in liquidation
Benefit
 Interest bearing(5%), compounded………… and calculated…… basis
 Meets financial requirement for
 Emergency
 Old age
 Specific needs
 Future investment
 Security from fire and theft
 Card convenience(provides access to ATMs to withdraw, enquire about balance, etc))
 Monitor and control funds through passbook
 Inter branch network to withdraw fund
Required Document
1. Individual trader
 One valid and renewed I.D. card
 Two recent passport size photograph
 Tax Identification Number (TIN)
Private Limited Company
 Renewed Trade License
 Memorandum and article of association
 Letter of request to open and operate the account, signed by the authorized person
 Valid and renewed I.D. card of the authorized person to operate the account
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 Activity 4
How to open a customer account
______________________________________________________________________________
______________________________________________________________________________
_____________________________________________________________________________
2.4 processing new applications and transaction
Opening a bank account is not as simple as walking up to a bank teller and handing over
crumpled wads of cash; there are lots of decisions to make and confusing banking jargon to wade
through. We'll teach you everything you need to know about making smart decisions when
opening a new bank account.
Steps
1. Examine Your Financial Situation. Let's begin with a practical question: do you have
any money? Coins don't count (unless they're valuable collector's coins). You don't have
to be loaded to start a bank account, but it's tough to open a bank account with $0.23 in
your wallet. Here's why:
o Minimum Balances: Certain types of accounts require you to maintain a minimum
balance - that means that you must have at least a certain amount of money in the
bank at all times. If your account ever dips below that minimum balance, then
you'll get charged a fine. The reason why banks like to hold onto at least some of
your hard-earned cash is because they need it to lend to other people who want to
take out loans for houses, cars, college tuition.
o Service Charges: Some accounts charge you a monthly fee for the privilege of
using their services; so if you have no money to give to them, why bother paying
that service charge every month? We should add, however, that the service fees at
most banks are usually fairly low, so it might be worth it for you to just keep an
account open if you know that you'll at least have some money to put away some
time. But it's still an expense to plan for.
o Self-Esteem: It'll be depressing for you to get your bank statement in the mail
every month if it's always going to tell you the same thing: "You have $0.00 in
your account. Get a job. Loser."
o ATM Services: Your bank will most likely charge you a fee for using automated
teller machines (ATMs) that don't belong to them, and some will limit you to a
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certain number of ATM transactions per month on your bank's ATMs (if you
exceed that number, you'll have to pay an additional fee at some banks). So
although they're convenient, ATMs can be an expensive service.
2. Choose The Right Bank. If you're thinking, "That bank right there across the street
looks good" or "Citibank, of course," then it's great that you've settled on your ideal bank.
But there may be another bank that's only one block further away that is much better
suited to your financial needs. Proximity and reputation are excellent factors to help you
determine what bank is right for you, but you should really consider all the other
advantages of choosing a specific type of bank before forking all of your cash over.
o A large chain bank - Large chain banks offer two main benefits that the others don't:
convenience and reputation.
o Convenience: If you don't know the names Citibank or Chase, we are pleased to
welcome you to the planet Earth and inform you that these are monstrously large
chain banks. Because there are so many of these banks, they offer the fine advantage
of having plenty of ATMs around, in most any country you may travel to.
o The big banks with their deep pockets also try as hard as they can to make it easy for
you to access information about your stored money. This means that besides the
branches they've got located on every other street of your city, they probably have
24-hour toll free phone service and an online presence. If one Sunday night you are
suddenly overwhelmed with the desire to know exactly how much you deposited
into your account on a certain day two months ago, just get on the phone and call the
bank.
o Reputation: If you belong to a big-name bank, there is little to absolutely no
chance of it folding and leaving you in a bind to find a new bank. So if you're one
of those people who don't like change, stick to a bank with a secured place in the
banking world.
o A small neighborhood bank - Small neighborhood banks have two cozy things
going for them: proximity and friendliness.
o Proximity: Neighborhood banks are by definition located in your neighborhood,
making it very easy for you to make a trip to the bank. If you're the sort of person
who literally likes to run your errands, this is the bank for you. This is also a great
option if you happen to hate Citibank, Chase, or any of those other greedy
megabanks.
o Friendliness: Now we're not going to guarantee that tellers at your local bank will
bake you pies, but most people find that employees at their local banks are just
plain friendlier than the ones at big, impersonal banks. Small banks don't have the
option of blowing off a potential or current customer, so they'll hire tellers who
make it their business to smile until their faces hurt. Instead of treating you like an
account number, these tellers will treat you like a real person (with an account
number).
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o
An online bank - We would get kicked off the web if we didn't mention the
growing presence of online banks. Online banks not only allow you to take care
of your banking while naked, but they can also offer you special deals.
o Special Deals: While just about all the large bank chains have revamped their
businesses to incorporate an Internet aspect (online applications, online access to
your account, etc.), there are some banks that are located purely on the Internet.
Sites like WingspanBank.com are eager to get their virtual hands on your money
and hold it for you. To woo you, they're offering all sorts of cool deals that
involve super-high interest returns on your savings, and 24-hour phone and
Internet assistance. If think you're ever going to sign up at an online bank
(especially now that the Y2K fiasco - or lack thereof - is behind us), do it soon
before they become a dime a dozen and all the special deals disappear.
3. Pick a Type of Account - So now that you've assessed your financial status and
picked out a bank, you need to decide what type of account you're gonna open. We'll
sort out all the different types, and we'll try not to use confusing terms like "overdraft
protection" (without translating them, at least).
o Savings accounts - A savings account is all about - surprise! - saving your money
in an account. However, the main purpose of having this type of account is not
only to store your money safely away, but also to gain interest. "Interest" means
that the bank will pay you for letting them hold your money, and how much
interest you get depends on the amount of money you have in your savings
account. Bottom line: the more money you save, the more you'll gain.
o There are several types of savings accounts, and the details and names of each
type vary from bank to bank. We can't guarantee that all banks will have each of
the following kinds of accounts, but they are covered broadly enough so that you
have at least a general idea of what to ask for when you step into the bank:
o Passbook Savings: This is the simplest type of savings account. You go into the
bank, deposit or withdraw your money, and the teller makes a notation on your
passbook (which records all the activity that goes on with your account). A
passbook savings account is perfect if you're a haphazard saver who randomly
makes deposits and/or withdrawals.
o Regular Savings: This account can be linked to a checking account (more about
checking and linking later), and the bank will send you a statement in the mail to
let you know what's going on every month. You'll get an ATM card with this
account which will permit you to withdraw cash at all of the bank's ATM
machines and at other universal ATM machines. A regular savings account is
ideal for people who make a steady - but limited - income.
o High-Interest Savings: This account comes with all the benefits of a regular
account, but has a higher minimum balance (that is, you have to always have a lot
of cash sitting in the account). On the up side, it gives back a relatively higher
interest return (compared to a passbook or regular savings account). So you store
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more, but you also get more back. If you've got a couple of thousand dollars for
your bar mitzvah that you want to put away, this is the account for you.
o Certificates of Deposit (CDs): The above three accounts are all "liquid" accounts,
meaning that you can deposit money into and take money out of your account at
any time (while taking care to honor your minimum balance requirements). When
you put your money in a CD, you agree to put it away for a certain number of
months. That means ABSOLUTELY NO TOUCHING. There's no adding money
to the CD, and there's definitely no removing money from it either. Because
you're giving your money to the bank for three or more months at a time, the bank
will pay you a (relatively) higher interest than they'll pay you for keeping money
in any of the other savings accounts.
o Checking accounts - The neatest thing about having a checking account is the fact
that you get your very own checkbook, with you name on it and everything! (It
will not, however, be so neat when you're writing out checks for huge bill
payments.) All banks offer checking accounts, but some offer checking accounts
that also work as savings accounts. We'll go over both types in detail.
o Regular Checking: At most banks, you'll pay a low monthly fee for check-writing
services. This means that you'll be set up with a checkbook immediately after
opening the account, and have the option of writing checks that draw money out
of this account. With regular checking, you'll also get the money storage and
ATM services. Whenever you need to randomly take money out to buy groceries
or clothes, it should be from your checking account.
o Interest Checking: This account features everything that a regular checking
account has, but it includes an interest rate, so it acts like a regular savings
account. Sounds too good to be true? It might be, depending on how much the
monthly charge for maintaining such an account is at your bank - it's usually a
good deal higher than the monthly fee for a regular checking account. So you
have to make sure that you always have enough cash in your account so that the
interest outweighs the monthly charge.
o Anytime you write a bogus check (like scribbling down $50,000 to buy that pony
you've always wanted, when you actually have closer to $5 in your account), the
check will "bounce." This is just a cute way of saying that the payment won't go
through and you'll be held responsible for messing up - your bank will fine you an
amount that will undoubtedly make you wince. So don't write checks without
making sure that you can honor them first. - Some banks offer a service called
"overdraft protection," which basically means that if the check bounces, the bank
will spot you the amount of money for which you've written a check. (You'll still
be fined, though.)
4. Linking Accounts. If what you really need is a checking account, but what you want is
to earn interest without paying the high fees for interest checking, you have the option of
linking a savings account to your regular checking account.
25
o
The line between linked accounts is usually pretty distinct - you can't have $1000
sitting in your savings account, earning interest, and expect to pay your checks
through that same account. You must first transfer some of that money into your
interest-less checking account first. - When making deposits, you'll have the
option of putting the money into one of your accounts. (You can shift the dough
between accounts once it's in.) We recommend that you don't try to be slick by
keeping all your money in your savings account until you have to pay for a check
(and then transferring the exact amount you wrote the check out for into
checking). Unless you live next door to, on top of, or inside the bank, and have
easy access to it at all times, it's quite possible that your fantastic scheme will end
up costing you.
o Joint accounts - When you open any account with another person, it is called a
joint account - married couples usually open one of these accounts, but unmarried
couples and total strangers can do it as well. You and the co-account opener have
equal ownership to all the money in the account, and can take advantage of all the
services that come with the account. Either of you can deposit or withdraw as
much of the money as you like without having to answer to the other holder. So
it's actually not a good idea to open a joint account with a total stranger… unless
the total stranger is a great deal richer than you are, in which case a joint account
would be very ideal. We should add that if one of the joint account owners dies,
the surviving owner gets all the money in the account.
5. Ways to open an account - Before you sprint down to the bank of your choice, we'd
like to inform you that you might not even need to step out of your house to open
your account. Thanks to technology, there are several ways to open an account now.
o Over the phone: According to the bigger chain banks, people are increasingly
picking up the phone to open a bank account. You might want to consider looking
up the number to your bank and giving them a call instead of making the trip,
especially if you're having a bad hair day. The process will take longer because
you'll have to mail in your signature, but it is a fairly simple way to go.
o On the Internet: Many banks - especially the online banks - offer applications
over the Internet. Simply call the bank to ask for their website, or look it up on the
internet. When you open an account online, you don't have to deal with a pesky
teller trying to talk you into opening a certain type of account. You can also
leisurely browse through all your options and take your time in deciding what you
really want. There's no pressure, and you can always call the bank if you discover
that you need some assistance. Ah, sweet solitude.
o In person: If the above two options reek of detachment to you, you can always
head down to the bank and get some of that human contact you crave so badly.
Another advantage of opening a bank account in person is that you can ask the
teller all of your questions and get immediate answers (as opposed to waiting two
business days to get an e-mail response). Because you can sign all the papers on
the spot, the process of opening an account is also speedier in person.
26
o
Qualification and identification - Before picking up the phone, switching over to
your bank's website, or physically heading over to your bank, make sure you
qualify for a bank account by preparing some ID first.
o Proof of age: You've got to be at least 18 years of age to open a bank account.
o Proof of address: A phone bill, driver's license, or any other official document
with your name and address will do.
o Proof that you are who you say you are: The bank will ask for your social security
number or employer identification number to ensure that you exist, so have those
digits handy.
o In addition to these requirements, get out an ID with your picture, an ID with your
signature, and anything else you've got that tells the bank you're legit (a passport
is always nice). Have your mother handy, if necessary.
6. Questions to ask - The following questions MUST be answered before you give your
money away. What if you forget to ask about time deadlines, and suddenly realize that
you can't touch your money for three years? So always get the answers to the following:
o Is there a monthly fee for maintaining this account? If so, what is it?
o Is there a minimum balance that I must keep within this account? If so, what is it?
And what sorts of fees apply if I go under that limit?
o What is the interest rate of my savings account?
o Is the account for which I'm applying FDIC insured? You definitely want your
account to be insured by the Federal Deposit Insurance Corporation. If your bank
ever goes bankrupt and loses all your money, the FDIC's will pay you back up to
the maximum insured amount.
o Is there a limit to the amount of transactions (deposits/withdrawals, check writing,
ATM uses) I have per month? If so, how many do I get of each? What sorts of
fees apply if I go over my limit?
o Where can I withdraw cash without paying any fees? What is the fee for using an
ATM machine that doesn't belong to this bank?
o In addition to these questions, don't be shy when it comes to asking for a
clarification on anything that confuses you. You are dealing with your hardearned money, after all, and the last thing you want to do is blow it all over a
misunderstanding.
Investment Account
Investment Account Meaning:
In investment terminology, the term Investment Account refers to a type of financial account that
contains a deposit of funds and/or securities that is held at a financial institution. The typical
objectives of an Investment Account are to achieve long term growth, income or capital
preservation from the deposited asset portfolio.
Investment Account Example:
For example, an Investment Account might be used by an individual to set assets like stocks and
27
bonds aside to provide them with income during their retirement that will supplement whatever
pension(s) they might receive and provide them with a higher standard of living. An Investment
Account might also be useful to a parent wishing to save money for their child’s education, or to
a newlywed couple wanting to put together a down payment for a house. In general, the purpose
of opening and operating most Investment Accounts is usually based upon longer term financial
planning goals.
Information
 knowledge acquired through study or experience or instruction accuracy
 The state of being accurate; freedom from mistakes, this exemption arising from
carefulness; exact conformity to truth, or to a rule or model; exactness; nicety;
correctness
Information accuracy = knowledge that is correct, or something that is true.
Activity 5
What are the requirements to open a current account?
______________________________________________________________________________
______________________________________________________________________________
_______________________________________________________________________
Saving Account in Bank - Meaning, Features, Advantages
Commercial banks co-operative banks, public sector banks and postal departments accept deposits
by way of opening saving bank account with them. The 'saving account' is generally opened in
bank by salaried persons or by the persons who have a fixed regular income. This facility is also
given to students, senior citizens, pensioners, and so on. Saving accounts are opened to
encourage the people to save money and collect their savings.
Features of Saving Account
The main features of saving account in bank are as follows:
 The main objective of saving account is to promote savings.
 There is no restriction on the number and amount of deposits.
 Withdrawals are allowed subject to certain restrictions.
 The money can be withdrawn either by cheque or withdrawal slip of the respective bank.
 The rate of interest payable is very nominal on saving accounts.
 Saving account is of continuing nature. There is no maximum period of holding.
 A minimum amount has to be kept on saving account to keep it functioning.
 No loan facility is provided against saving account.
 Electronic clearing System (ECS) or E-Banking are available to pay electricity bill,
telephone bill and other routine household expenses.
 Generally, equated monthly installments (EMI) for housing loan, personal loan, car loan,
etc., are paid (routed) through saving bank account.
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Advantages of Saving Account
The advantages of saving account are as follows:
1. Saving account encourages savings habit among salary earners and others who have fixed
income.
2. It enables the depositor to earn income by way of saving bank interest.
3. Saving account helps the depositor to make payment by way of issuing cheques.
4. It shows income of a salaried and other person earned during the year.
5. Saving account passbook acts as an identity and residential proof of the account holder.
6. It provides a facility such as Electronic fund transfer (EFT) to other people's accounts.
7. It helps to do online shopping via facility like internet banking.
8. It aids to keep records of all online transactions carried on by the account holder.
9. It provides immediate funds as and when required through ATM.
10. The bank offers number of services to the saving account holders.
Your retirement savings plan offers you several choices when you change jobs or retire. This
report explains the "distribution options" you can choose from in deciding how you want the
money in your plan treated.
Activity 6
Write the main features of saving account in bank:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_____________________________________________________________________
Learning outcome #3
3. Transfer or close customer account
3.1. The account holder seeking to transfer or close an account is interviewed to gather the
required information which is assessed for accuracy and sufficiency according to the standard
organization procedures
Required information to transfer or close an account may include:
 account details to enable transfer of remaining funds
 details of possible complaints relating to the account
 reasons for transfer or closure of accounts
Required information to transfer or close an account may include:
29



Types of Transfer of account could include:

Transfer funds to your mortgage, loan or line of credit
 Transfer between business accounts
 Transfer between business and personal accounts
 Transfer between personal accounts
Closure of customer account
It is not good business for a bank to tell a customer to move its accounts elsewhere, but banks
will occasionally do so. Typically, this happens where there has been a breakdown of trust in the
banking relationship, for example where the bank suspects fraudulent activity, such as money
laundering or cheque kiting, or ties to terrorism. In fact, banks are not only wise to terminate the
relationship in these circumstances, but are often required to do so pursuant to the Proceeds of
Crime (Money Laundering) and Terrorist Financing Act.1
Closure of account could be processed with the request of customers due to many reasons. And
banks sometimes close the account when the account becomes inactive or have zero balance.

The process of transfer or closure of the customer accounts includes:
 The account holder seeking to transfer or close an account is interviewed to gather the
required information which is assessed for accuracy and sufficiency according to the
standard organization procedures.
 Completed documentation is verified for accuracy and applications for transfer or closure
are processed in accordance with organization’s policies and procedures to ensure the
timely and accurate completion of the task.
 Information about the finalization of the process is provided in accordance with
organization policies and procedures.
How to Close Your Bank Account Properly
Leaving your bank can be a daunting task. A recent survey by the Consumer Reports National
Research Center found that one in five consumers considered switching banks but didn’t because
of the hassle, effort, and fees involved with the process. However, the entire ordeal is not as
intimidating with a planned approach.
30
And, there are also some consumers who, in the spur of the moment, prefer to close their
accounts on a whim. Although it is a satisfying display of the power held by consumers, it could
lead to even more inconvenience.
By taking the right steps when switching banks, you could ensure a seamless transition and free
yourself from plenty of headaches.
1. Find your new bank.
Before closing your old bank accounts, you should have a new bank ready to receive your
money. If you close your bank accounts and then start looking for a new bank, you may find
yourself inconvenienced when you need to write a check, transfer money, or pay a bill.
2. Review and transfer automatic payments and recurring transactions.
Since banks allow customers to automate much of their finances, consumers who want to leave
banks found themselves hindered by the chore of having to re-establish that automatic flow of
money. In most cases, however, the transition simply requires you to change the bank account
number and routing number.
Review your bank statements for the past six to 12 months so you can identify which automated
transactions need to be rerouted to your new bank. These transactions could include rent
payments, bill payments, direct deposit, and automatic fund transfers. You may also find
infrequent transactions that also draw from your old accounts.
After rerouting these automated transactions, give it two to three weeks for these transactions to
shift to your new bank accounts.
3. Transfer the money from your old bank to your new bank.
When you have confirmed that automatic transactions have been re-routed properly, you can
begin to move your money to the new bank. You can do so without telling your old bank that
you plan to close your accounts. Be cognizant of any withdrawal or transfer limits if there is a
large amount of cash in your old accounts.
4. Close the account and request a written letter.
Now, go to the bank and ask for your accounts to be closed. If you didn’t already move your
money out, you will receive the balances in your accounts in the form of a check.
Many consumers have complained of “zombie” accounts, which occur when a bank re-opens an
account because a company attempted to draw money from it. Closed accounts were often
reactivated because of billing errors or when customers forgot about an automated bill payment.
31
So, it is important to request a written letter that states that your accounts are closed—just in case
you have to settle any discrepancies in the future.
With some planning, switching banks isn’t such a terrifying experience. In the future, the
Consumer Financial Protection Bureau may even make it easier for consumers to switch banks.
Closing Bank Accounts and Your Credit Score
Many people don’t know that closing accounts can affect your credit score – but not always in a
positive way! Knowing the right way to close an account will help you maintain healthy credit.
The right way

Before you close any accounts, you should first evaluate how many accounts you have,
what they are costing you, what you use them for, and how they may affect your credit score.
Closing an account may save you money in annual fees, or reduce the risk of fraud on those
accounts, but closing the wrong accounts could actually harm your credit score.

Check your credit reports online to see your account status before you close accounts to
help your credit score. A good mix of credit is important, and too many accounts of the same
type may be hurting your score. But remember, accounts that have been open for a long time,
and those with high credit limits but low balances, may have a positive impact on your credit
score.
 If you still decide to close some accounts to help your credit score, start by looking at
inactive accounts that you no longer use. Cards that you don’t use, but charge high annual
fees, may be candidates for closure in order to save you money.
 When you close accounts, remember to keep at least one of your older credit accounts
open. And consider keeping enough accounts open so your total balances on all open
cards is less than 35% of the total credit limits.
 If controlling your spending is a problem, designate one card for regular use and try to
pay the balance in-full each month to help your credit score. Keep the other cards in a
safe place for emergencies only so that you are not tempted to overspend.
The wrong way



Try not to close the oldest account on your credit reports. This could shorten your active
credit history and damage your score.
Don’t just throw away old cards and expect your accounts to close automatically. When
you close accounts, the correct way is to call or send a letter to the customer service
department of the card issuer (not the credit reporting company). You should receive an
account closing confirmation letter in 10 days.
You shouldn't be tempted to cancel several accounts all at once when you close accounts.
Gradually paying down and closing accounts may be the best plan if you are unsure about
the impact on your credit score, or the amount of debt you need to carry. If you want to
cancel multiple credit accounts, space the closures over time to avoid this being viewed
negatively by potential creditors.
32


Avoid putting all your balances on one card as you close accounts to help your credit
score. If your credit balance increases to above 35% of your available limit on that card,
it could negatively affect your credit score.
Keep monitoring your credit reports for updates once the accounts are closed to help your
credit score. Wait 30-60 days for the creditor to report the closed account and the credit
reporting companies to update records. While the accounts and payment histories will
stay on your report for seven or more years, they should be marked as "closed."
3.2 completed documentation is verified for accuracy and applications for transfer or
closure are processed
There are several reasons why you might need to close your bank account. You could be moving
to a location that doesn't have a branch or you might want to stop an automatic debit. Whatever
the reason, follow these steps to close a bank account.
Instructions
1. Make sure all checks have cleared your bank account. As soon as your account is
closed, the bank gives you the balance of the account.
2. Switch banking information with employers and vendors. Before you close the
account, give your employer your new banking information when your pay check
is automatically deposited. Change information with any vendor who
automatically debits your account.
3. Call your bank. Before you make a trip to the bank, you need to call and find out
your bank's policies. There are banks that charge a fee to close an account.
4. Go to your bank. Physically go into your bank to close the account. Most banks
will require two forms of identification including one photo id. You must go
before 3 pm on a weekday to ensure that the staff at the bank can process your
request.
5. Get your money. Request the balance in your account at the time of closing. You
can transfer the funds into a new account or get the amount in cash.
Tips & Warnings
 Make sure that you don't have any outstanding checks before you close your account.
Your bank won't charge you a fee for debits that come in after you have closed the
account, but the vendor will.
 Some banks require both individuals to be present for closing a joint account. Other
banks may have a designated staff member with a set schedule who handles closing
transactions.
 If you have a large amount of money the bank may need a few days to process your
request. Some banks may issue a cashier's check.
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Finding the Right Bank for You
Where to deposit your money can be a big decision. If you’re like most people, the relationship
you develop with your bank (or banks) will be a long one. It’s important to make sure that the
bank you choose has the services and benefits you want and need to manage your money
effectively.
With most banks you have a range of options that allow you to choose when and how you prefer
to manage your money. From a face-to-face visit at your local branch, to banking through an
ATM, online banking, mobile banking or some combination of “all the above,” you can decide
what works—and what’s most convenient for you.
Finding the right bank to fit your needs
Finding the right bank to fit your needs requires a little homework. It starts with thinking about
what services you are looking for and prioritizing what’s important to you as a customer.
Everyone is different. You may find that the convenience of having the bank branch around
the corner from your home or office outweighs a slightly higher interest rate or free
checking offer from another bank that requires you to drive across town.
Here are some questions to help you figure out what you want from your bank.

Do you prefer the face-to-face interaction and customer service you get by going into a
bank branch or are you comfortable conducting all or most of your financial transactions
online?
 What does “convenience” mean to you? Does it mean that there is a branch near your
home or office or does it mean that you want 24/7 access to your accounts online or from
your mobile phone?
 Do you write a lot of checks? If so, look for an account with unlimited checking.
 Do you like paying your bills online? Look for a bank that offers free online access that
includes unlimited bill payments and transfers.
 How often do you use the ATM? If it’s a frequent stop, does the bank have a large
network of ATMs in locations that are convenient for you (near your office, near home, in or
near your local grocery store)?
 Are you looking for a single bank that will allow you to keep and manage all of your
accounts in one place (savings, checking, car loan, CDs, etc.) or are you willing to multitask and keep track of accounts at different institutions?
Once you’ve thought about what’s important to you, start comparing your options. Ask friends or
coworkers where they bank and what they like and don’t like about it. Check out bank websites,
most can give you all the information you need about hours of operation, fees, interest rates and
the availability of online and mobile banking. If not, or better yet in addition, stop by or call your
local bank and ask them. You’ll get to experience their customer service first-hand.
Closing customer account
Procedures for a Bank to Close a Customer's Account
Banks open accounts on behalf of customers in order to conduct business. There are two general
types of accounts. One is a debt account, managed by the bank, representing a debt that the
34
customer owes the bank, such as a mortgage or auto loan. These accounts are closed
automatically when the loan is paid off or discharged in another way. The other type of account
allows the customer to deposit money into the account, where it is available for use and often
earns an interest rate. These accounts can be closed either by the bank or the customer through a
basic process.
Performing Final Actions
First, the bank will allow all final actions regarding the account to complete. If interest is in the
process of being applied, the bank will allow the addition. The bank will also make sure any
checks clear, any fees are paid and any other basic action is finished. This is why customers must
notify a bank in advance when they want to close an account. This gives the bank time to finish
all the transactions they are currently in the middle of.
Withdrawals
The bank then helps the customer withdraw all the money in the account itself. There are usual
several minor steps to this process. First, the customer must prove they are in fact the person that
opened the account and has the power to close it, usually through multiple forms of
identification. Then, the bank will present the customer with a check that includes all the money
present in the account at that moment. The bank will then remove the account from its system
and send the customer a notice that the account has been fully deleted.
Banks Closing Accounts
While customers are often in charge of closing account, most banks can also close accounts
themselves, even checking and investment accounts. Under federal law, banks can close nearly
any deposit accounts for a couple different reasons, most connected to abandonment. In other
words, if the customer does not use the account at all or uses it only very infrequently, then the
bank may choose to close the account itself and absorb any funds that are present in it. Bank
policies differ on this matter.
Fees
Banks may also have fees associated with closing accounts. Again, this is often dependent upon
individual bank policy. Banks lose money and investment potential when an account is closed, so
some compensate themselves by charging customers for ending a current deposit account. On the
other hand, if there are overdrawn fees associated with the account, most banks will refuse to
close the account at all until these fees are paid.
Bank Account Closing Letter
Closing a bank account is an easy task, provided you follow the norms of the bank in the correct
manner, one of which is writing a bank account closing letter requesting to close your account
and transferring the remaining funds. Read this article to know how to do the same.
Whenever it comes to dealing with government institutions or banks, you need to follow certain
legal formalities, truly abiding by the rules and regulations of the body you are dealing
with...which in this case, is a bank! Usually the bank customers are the most longest and loyal
customers among all the service giving organizations. But due to certain situations like moving
out to a different location where the branch isn't near, or due to lack of customer satisfaction,
35
customers tend to close their bank account. It is advisable to call your bank in order to know
their specific requirements. For example, some banks charge a fee for closing your bank account.
Some banks require a government issued photo identification also. So checking on all these
requirements would be a good idea. After checking with the bank as to what all information and
documents they need, the next step would be to write a bank account closing letter to the bank
manager. Mentioned below is a sample for the same along with the necessary information that
you should include in the letter.
Bank Account Closing Letter Sample
It is better to note down in a piece of paper as to what all things you need to do before you
submit the letter to the bank in reference to close the account. This is because missing out on
even single information would lead to unnecessary delays. If you have more than one type of bank
accounts, then you need to make sure to provide all the required details. This is how you would
need to write a letter to the bank requesting to close your bank account.
To,
The Bank Manager
State Bank
92nd Street West
New York, New York
123456
RE: Application to close my bank account
This is to inform you that I would like to close my bank account in your bank. The details of my
bank account are listed as under along with the unused check numbers.
Savings Account Number: 01234
Checking Account Number: 56789
There are no due checks to be cleared under these accounts. I request you to give the remaining
balance of my account in check and send it to my postal address. If that would take time, then I
request you to transfer the balance amount to my new bank account at Cityville Bank, whose
account number is 45678.
In case of any further information or queries, kindly contact me at my email address which is
lmn@yahoo.com. You can also call me at 0123456789.
Thanking you for your assistance for the same.
36
Sincerely,
John Smith
(Signature)
Once you have written the bank account closing letter and sent it to the bank, it is most likely
that you will also have to go to the bank physically with some form of identification, preferably
photo identification. Also, you need to make sure that you open a new bank account before you
close your existing (old) bank account, or soon after closing your existing bank account. This is
because you are required to update your employers and vendors about the same. If you visit the
bank on a weekday before 3 pm, it is likely that your request will be processed as soon as
possible. So make sure that you do all that is required so that your work is done in one go.
Learning outcome #4
4. Administer the process
4.1. Standard organization processes and protocols are used to verify customer identity
when collecting processed documentation and cards from a branch
PROTOCOLS
1.General: Unwritten rules or guidelines that are peculiar to every culture or organization, and
are supposed to be observed by all parties in the conduct of business, entertaining, negotiating,
politics, etc.
2.Product development: Statement of attributes (features and benefits) that a new product must
be designed to have. A product protocol is prepared by consulting all parties (customers,
marketing, production, distribution) to the project.
3.Technology: Set of agreed upon, and openly published and distributed, standards that enables
different firms to manufacture compatible devices to the same specifications. All devices made
under the same protocol work with one another without any adjustment or modification.
Organization protocol
37
An organization protocol or org protocol is the series of steps that (anyone in) an organization
take to accomplish some specific task.
The output of the protocol should always be the name of it, e.g.






candidate protocol nominates one candidate,
member protocol verifies or admits a single member,
officer protocol nominates, elects, reviews, fires or asks officer to resign - requiring they
transfer roles
fund protocol? produces financial capital to fund projects
village protocol maintains and stabilizes a village? and settles any disputes regarding use
of infrastructural capital, e.g. Element Village protocol
tribe protocol? creates or validates a tribe, e.g. Reformed Distributed Republic?, and
verifies that social capital continues to exist
An org may apply its own structure or integrating framework to any protocol it uses, and
may limit or require some governance of it. That is described on pages that are devoted to
the organization and its own specific rules
4.2. Customer queries or complaints about the operation of the service are followed up with
appropriate personnel according to standard procedures
Complaints: A Critical Form of Communication
Complaints are a goldmine of information
Complaints offer businesses an opportunity to correct immediate problems. In addition, they
frequently provide constructive ideas for improving products, adapting marketing practices,
upgrading services, or modifying promotional material and product information.
While occasional problems with service of merchandise are, to some extent, inevitable,
dissatisfied customers are not. Companies can learn to recover from mistakes. A good recovery
can turn angry, frustrated customers into loyal ones.
Recognizing the importance of responding fairly and efficiently to buyer disappointment in the
marketplace, many businesses have established effective and innovative systems for resolving
consumer complaints. Within any industry, those companies with a positive philosophy and a
reputation for fair complaint-management have a competitive edge.
A management philosophy that embraces customer satisfaction as a primary goal of business,
instead of defending the company in the face of complaints, can change the rules of the game for
companies. It shifts the emphasis from the cost of pleasing a customer to the value of doing so,
and trusts front-line employees to use their judgment.
Why is Complaints Handling Important?
Generate Loyalty, Goodwill and Word-of-Mouth
By talking back when they believe they have not received their money's worth, consumers give
businesses an opportunity to correct the immediate problem and restore goodwill.
38
Experience shows that consumers who complain about products and services continue to
frequent the businesses and buy the products they complain about if they believe the complaint
was resolved fairly.
Research into complaint behavior reveals that only a fraction of dissatisfied consumers
complains to business and, thereby, gives the company an opportunity to correct the problem.
There is evidence that some consumers do not complain because they are skeptical about
business's willingness or ability to resolve disputes fairly. Consumers simply withdraw their
patronage and criticize the company or the product to others.
Such findings underscore the importance to business of a complaint management system that is
well-publicized and easily accessible. An unregistered complaint may do as much harm as one
that is mismanaged or not resolved.
Careful complaint management can save business unwanted costs. For example, negative wordof-mouth publicity from dissatisfied consumers means lost revenue and necessitates additional
investment in advertising to attract replacement customers.
Complaints and complaint trends tell business how to do its job better by alerting management to
problems that need prompt attention and correction. Furthermore, they indicate long-range
opportunities for product innovation and problem prevention. A wellplanned system for
screening and recording complaint data can provide business owners and managers answers to
such important questions as the following:
Are products "oversold" or "over advertised?"
Is advertising clearly understood?
Are salespeople overzealous?
Do product disclosures (such as labeling, warranty information and service agreements) need
to be improved?
Are user's manuals clear, complete and easy-to-read?
would changing warranty coverage reduce complaints?
Complaints also provide information about product quality:
Are there opportunities for product improvements or better quality control?
Are there indications of safety defects that should be reported and corrected, or that justify a
recall?
To get this valuable feedback, complaint-reporting must generate information swiftly and
systematically to the appropriate managers or departments. Initial screening should trigger
immediate action, when necessary, and statistical summaries should identify trends and longrange courses of action.
39
Summary
 Requests for information on the range, options and features of account services available
are addressed in a timely, accurate and comprehensive manner, or referred if necessary to
other authorized personnel
Authorized personnel may include
 dispute resolution officer
 employees
 supervisors and managers
 Information is provided to customers to assist in the selection of an appropriate product
which outlines product features, matches products to customer needs, describes the cost
of operation and the conditions of the account
Information provided to customer may include descriptions of:

accounts geared to the needs of particular groups such as:
 customer deeming accounts
 youth accounts
 investment accounts
 retirement accounts
 Savings accounts.
 Customers are assisted when completing relevant documentation for selected services and
products
1. Open customer account
 Potential account holders are interviewed to gather information required for the opening
of accounts with applicant identified for security purposes according to organizational
procedures
Information required for opening accounts may include:
 amount of initial deposit
 other signatories to the account
 primary account holder's:

name

address
40

contact details
 purpose for which the account will be used
 Required links to other accounts held.
Organisational procedures for customer identification may include:
 conducting the 100 point check of personal identification
 Identifying and matching customer with existing accounts held within own financial
institution.
 Information provided is assessed for accuracy and sufficiency according to the standard
organization procedures
The accuracy and sufficiency of information provided includes ensuring:

authenticity of signatures

checks against or links to existing customer account information

completeness of documentation

provision of sufficient documentary evidence (points) to meet the
requirements for establishing a new account
 Completed documentation is verified for accuracy and deposits are accepted ensuring that
receipts and certificates are issued
 New applications and transactions are processed in accordance with organization’s
policies and procedures to ensure the timely and accurate completion of the task
 Information is provided to customer about the processes for activating the account
including the timeframe and mechanisms for receiving transaction cards or deposit books
and the most cost effective way to use the account
2.
Transfer or close customer account
 The account holder seeking to transfer or close an account is interviewed to gather the
required information which is assessed for accuracy and sufficiency according to the
standard organization procedures
 Completed documentation is verified for accuracy and applications for transfer or
closure are processed in accordance with organization’s policies and procedures to
ensure the timely and accurate completion of the task
41
 Information about the finalization of the process is provided in accordance with
organization policies and procedures
3. Administer the process
 Standard organization processes and protocols are used to verify customer identity when
collecting processed documentation and cards from a branch
 Customer queries or complaints about the operation of the service are followed up with
appropriate personnel according to standard procedures
 Reports are provided on account activity in line with standard policies and procedures
with any exception reports responded to
42

Check list
You have now completed the competency of process customer accounts and you need to check
whether you have understood the basic content in this course. If you have a ‘no” answer for any
of the following, you have to go back and read the appropriate section again until you grasp the
important point
Yes No

Provide Information to customers to assist in the selection of an
appropriate product which outlines product features, matches products to
customer needs, describes the cost of operation and the conditions of the
accounts

Assist Customers when completing relevant documentation for selected
services and products

Provide Information to assess for accuracy and sufficiency according to
the standard organization procedures

Verify Completed documentation
for accuracy and deposits are
accepted ensuring that receipts and certificates are issued

Process New applications and transactions in accordance with
organization’s policies and procedures to ensure the timely and accurate
completion of the task

Verify Completed documentation for accuracy and applications for
transfer or closure are processed in accordance with organization’s
policies and procedures to ensure the timely and accurate completion of
the task

Follow up Customer queries or complaints about the operation of the
service with appropriate personnel according to standard procedures

Provide Reports on account activity in line with standard policies and
procedures with any exception reports
43
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