Deposit & Account Opening — Chapter Two
1. DEPOSIT — DEFINITION & NATURE
Conventional Bank: Deposit is a loan taken from the public. The bank can use the money in any way it wishes. The legal relationship is:
- Bank = Debtor | Depositor = Creditor
Islamic Bank: Deposit is Amanah (Trust). Accepted under two modes:
- Al-Wadiah: Bank = Trustee (Amaneen) | Depositor = Trust-Giver (Moodaq). Bank safeguards the deposit and cannot use it without permission. No profit guaranteed.
- Mudaraba: Bank = Mudarib (Entrepreneur/Manager) | Depositor = Sahib Al-Mal (Capital Owner). Partnership in profit; loss borne by capital owner except in case of negligence.
2. TYPES OF DEPOSITS
| # | Type | Key Feature | Examples |
|---|---|---|---|
| 1 | Demand Deposit | Payable on demand. No fixed maturity. No cheque book issued. | Al-Wadiah Current Account, General Savings Account |
| 2 | Time Deposit | Payable on specific maturity date. No cheque book issued. | Term Deposit (FDR), Bonds, Monthly Savings Scheme |
| 3 | Call Deposit / Call Money | Short-term inter-bank borrowing. Repayable on call or notice. | Mudaraba Special Notice Account (MSNA) |
| 4 | Cost-Free Deposit | Bank pays no profit or interest on these deposits. | Current Account, Pay Order, DD Payable, Sundry Deposits |
| 5 | High Cost-Bearing Deposit | Bank pays a relatively higher rate of profit/interest. | FDR, Term Deposit, Bonds, Mudaraba Savings |
3. DAILY PRODUCT ACCOUNTS (Islamic Banks)
In Islamic banks, profit is calculated on the daily product basis (daily closing balance × number of days). The commonly cited four daily product accounts are:
- Mudaraba Farmers Savings Account (MFSA)
- Mudaraba Staff Account (MSA)
- Mudaraba Special Notice Account (MSNA)
- Mudaraba Hajj Savings Account
4. ACCOUNT OPENING — COMMON DOCUMENTS
Standard documents required for opening any bank account in Bangladesh (as per Bangladesh Bank guidelines and e-KYC framework):
- Completed Account Opening Form — Bangladesh Bank standardized KYC format
- Photograph: Digital photo taken on-spot via e-KYC system, OR 2 copies passport-size photographs of every operator — duly attested by the introducer (paper-based route)
- Identity Proof: Smart National ID Card (primary — biometrically verified against Election Commission database via e-KYC) / Valid Passport / Birth Certificate
- Nominee's Photograph: 1 copy passport-size photo of the nominee, attested by the account holder
- Minimum Deposit — amount varies by account type and bank policy
KYC Profile Types
Three types of KYC profiles are completed, depending on the customer category:
| # | KYC Profile Type | Applicable For |
|---|---|---|
| 1 | Personal / Individual | Individual account holders |
| 2 | Firm / Company | Proprietorship, Partnership, Limited Company |
| 3 | Non-Business Organization | Clubs, Societies, NGOs, Religious bodies |
5. WHO CAN OPEN AN ACCOUNT?
Any person eligible to enter a contract can open a bank account. Under the Contract Act 1872, Section 11, a person must be of the age of majority to contract. Special care must be taken for the following accounts:
5.1 Minor Account
A minor lacks contractual capacity and cannot independently open a bank account. A guardian may open an account in the minor's name or jointly with the minor.
General rule: 18 years.
Exception: If a Court of Justice has appointed a guardian for the minor's person or property, OR the minor's property is under the superintendence of a Court of Wards — then age of majority is 21 years.
✅ For standard banking purposes: Minor = person under 18 years of age.
When the minor attains majority (18 years), the bank must obtain fresh operating instructions and an updated specimen signature from the account holder.
5.2 Account in the Name of a Bankrupt Person
No account should be opened in the name of a person declared bankrupt, because money may have belonged to creditors prior to the bankruptcy declaration. Banks should verify bankruptcy/insolvency status. Governed by the Insolvency Act 1997 in Bangladesh.
5.3 Joint Account
All account holders must sign the Account Opening Form. Clear written instructions must be recorded regarding:
| Instruction | Meaning |
|---|---|
| Either/Anyone to Operate | Any one of the joint holders can independently operate the account |
| Anyone to Close | Any one holder can close the account |
| Survivor to Operate | On death of one holder, the survivor may continue to operate |
| All to Sign | All holders must sign jointly for every transaction |
| Anyone or Survivor | Any one can operate during lifetime; survivor continues on death |
5.4 Proprietorship Account
The account signatory must sign the Account Opening Form with their seal and position/title in the firm (e.g., "Proprietor — XYZ Enterprise"). Trade License is required.
5.5 Partnership Account
A partnership firm has no independent legal entity — the partners themselves are the legal persons and act as representatives of the firm. The mandate/authority given to the bank becomes void upon:
- Death, retirement, or insolvency of any partner
- Addition or removal of any partner (change in constitution of the firm)
- Expiry of the partnership term as specified in the Partnership Deed
The bank must stop all transactions on the account until fresh mandate is received from the reconstituted partnership. Required documents: Partnership Deed, Board/Partner Resolution, Trade License.
5.6 Limited Company Account
A limited company has an independent legal entity — separate from its shareholders and directors. Additional documents required:
- Memorandum of Association (MOA)
- Articles of Association (AOA)
- Board of Directors' Resolution — authorizing account opening and designating signatories
- Certificate of Incorporation
- Certificate of Commencement of Business (for Public Limited Companies)
- List of Directors with photographs and NID copies
5.7 Accounts of Non-Business Organizations
Clubs, societies, and religious organizations may be registered under:
- Companies Act 1994 (Section 28 — not-for-profit company) — treated as a company
- Societies Registration Act 1860 — for literary, scientific, or charitable bodies — treated as a society/organization
Such organizations are not legally required to register under any act to open a bank account. However, banks must exercise due care. Required documents: Resolution of the governing committee, Constitution/Bye-Laws or Articles of Association, Registration Certificate (if applicable). The authorized operator must sign with their designation.
5.8 Account of Cooperative Society
The society must be registered under the current cooperative law in Bangladesh.
Legislative history (important for exam):
Bengal Cooperative Societies Act 1940 → repealed 31 Dec 1984
→ Cooperative Societies Ordinance 1984 → replaced 15 Jul 2001
→ Cooperative Societies Act 2001 (current) → amended 2002 & 2013
Required documents: Registration Certificate under Cooperative Societies Act 2001, Constitution/Bye-Laws, Resolution of Managing Committee. Account operator must sign citing their designation in the society.
5.9 Trust Account
Governed by the Trusts Act 1882. Required document: Trust Deed — specifying the duties, responsibilities, and powers of the trustees.
Combined signatures of all trustees are required unless the Trust Deed specifically authorizes otherwise. If a trustee dies, the remaining trustees may operate the account — provided no contrary instruction is written in the Trust Deed.
5.10 Illiterate Account
Special rules apply for account holders who cannot read or write:
- Only Savings Account — no Current Account or other types
- Proper introduction required at account opening
- "Illiterate Account" or "SS" (Special Signature) inscribed on the Signature/Specimen Card
- No cheque book to be issued
- Withdrawals by thumb impression on an open/bearer cheque — executed before a bank official
- Photo of account holder affixed to Account Opening Form and Specimen Signature Card
5.11 Accounts of Executors, Administrators & Power of Attorney Holders
An executor or attorney acts within the power granted by will, court order, or Power of Attorney document. Must sign with "PP" (Per Procuration / by Power of Attorney) alongside their name. The bank must verify the scope and limits of the authority granted — the agent/executor cannot exceed the powers conferred.
6. KEY LEGAL REFERENCES — QUICK TABLE
| Law / Reference | Subject | Key Point |
|---|---|---|
| Majority Act 1875, S.3 | Age of majority | 18 years (general); 21 years only if Court Guardian appointed |
| Contract Act 1872, S.11 | Contractual capacity | Must be of majority age (18 yrs) to enter a contract |
| Companies Act 1994 | Limited company & non-profit company | Current law — replaced Companies Act 1913 |
| Cooperative Societies Act 2001 | Cooperative society registration | Current law — replaced 1984 Ordinance; amended 2002 & 2013 |
| Societies Registration Act 1860 | Charitable/literary societies | Still in force for eligible bodies |
| Trusts Act 1882 | Trust account governance | Still in force; Trust Deed controls all operations |
| Insolvency Act 1997 | Bankrupt persons | No account in name of declared bankrupt |
| BFIU e-KYC Guidelines | Digital account opening | Biometric NID verification via EC database; updated guidelines effective Sep 2026 |
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