Partnership letter (COS-37)

Rationale & Situational Analysis
Banks can not sanction loans against
their own shares
Prohibited under Sec-20 (b) of BR Act
Prohibited Under Sec- 34(1-b) of SBI Act
This tantamount to reduction in capital of the
obtained while opening accounts for
Partnership firms
It gives particulars of all the partners
The partners undertake that whenever any
changes occurs in the said firm to give notice
thereof to the Branch of the Bank at once in
It also gives all the partners who have authorised
to sign on behalf of the firm
Bank is not responsible for any
wrong entry made in the account
through internet banking.
The transaction is being done by the customer
It gives the right to authorise/ approve or
disapprove the transactions/ entry to the
customers themselves.
The branch is not having any possibility to
approve/ disapprove the transaction.
No death certificates are to be insisted for
settlement of cases of Missing persons up
to Rs. 1 lac.
RBI has come out with instructions to alleviate hardships faced
by customers in getting the settlement for small value deposits
without getting a valid presumptive death certificate.
Our Bank instructed that the claims up to a threshold limit of
Rs.1,00,000/- (Rs. One Lac only) will be entertained without
insisting for valid death certificate. All such claims in respect of
missing persons, reported missing for a minimum period of
one year, shall be settled on production of the following
1. FIR
2. Non-traceable report issued by the police authorities.
3. Indemnity from the claimant
Bank Guarantees should be classified
Bank guarantees attract capital provisioning on
Risk Weight based on Credit Conversion Factor
Performance Bank guarantee attracts a CCF of
Financial guarantee attracts a CCF of 100%.
So if wrongly classified, wrong CCF will be
applied, resulting in higher provision of capital.
This results in opportunity loss of profitable
deployment of capital
Your branch maintains a current account of a
partnership firm M/s. Singh Firm with Sanjay Sign &
Rahul Singh as partners.
Master Sandesh Singh (Son of Sanjay Singh) is also
admitted to the firm for benefits.
In order to meet the financial requirements of the firm,
Mr. Sanjay Singh approaches your bank branch to
sanction a demand loan against an TDR in the name of
Master Sandesh, FNG- Mr. Sanjay Singh.
How will you deal with this situation?
Minors can be inducted into partnership for the
benefits of the partnership only.
Loan against TDR in the name of Minor can be
sanctioned, if the loan is for the personal
maintenance of minor.
Here the loan is going to be utilised for the
benefit of business & not for the benefit of
So we can not sanction the loan against the
Mr. Subramaniam and Mr. Muralidhar have a
savings bank a/c, with style of operations as“Either or Survivor”.
Your branch has received a cheque issued by
Mr. Subramaniam and the has some alterations.
These alterations have been duly authenticated
by Mr. Muralidhar.
The SWO, who is a newly joined Assistant,
comes to you seeking directions.
How will you guide him?
The mandate permits operation by both persons
on either or survivor basis.
So both can independently operate the account.
The alterations can be authenticated by any one
as both have mandate to operate the account.
Hence the cheque can be paid if otherwise in
Your branch opens a fixed deposit of Rs.50000 in the joint name
of Mr. Anil Kumar and Mr. Suhail Kumar payable to either or
They also nominate Miss.Konica, a minor daughter of Mr.
Suhail Kumar with the provision that the payment can be
claimed by Mrs.Suhail Kumar on behalf of the minor.
Unfortunately, Mr. Suhail Kumar expired and
Subsequently Mr. Anil Kumar decides to change the nomination
from Miss. Konica to his own son.
To this, Mrs. Suhail Kumar objects and asks your branch not to
accept the instruction of Mr. Anil Kumar.
How will you deal with the situation?
As per the mandate of E or S, the survivor gets
the right to operate / change the account as if it
were operated by only the survivor.
The nomination is effective only after the death
of both depositors.
Hence the request for change of nomination has
to be accepted and carried out as per his wish.
The nominee / her mother’s request can not be