Andhra bank

(A Government of India Undertaking) Head Office, Hyderabad BPC No: 14 1. 1.1 Closure of Current and Savings Group of Accounts

Closure of Accounts Accounts can be closed in the following circumstances: i) When the account holder desires to close the account. ii) When the account holder desires to transfer the account to another branch of the bank. iii) At the discretion of the bank when "the account is not conducted properly and becoming an undesirable account".

2. 2.1

Closure of accounts at the request of the account holder The procedure of closure of an account at the request of the account holder is explained in the following paragraphs. When a customer desires to close the account, a letter in form No. RF - 35 or with contents near thereto should be given by him together with the unused cheque forms, requisition slip(s) and the Pass Book wherever originally issued to him. This letter should be signed by the account holder / authorised person and the signature should, tally with the relative specimen signature on record. The letter of request to close an account so received by the branch should be put up to the manager for his instructions to be given thereon under his initials. The Manager should enquire into the reasons for the request to close the account. In case the constituent decided to close the account due to dissatisfaction with the quality of service rendered at the branch, the manager should immediately enquire into the matter in order not only to satisfy the customer and pursue him not to close the account but also to ensure that such instances do not recur. It may be noted that a dissatisfied customer might lead to further loss of patronage to the bank which cannot certainly be afforded in the face of stiff competition in banking business. All the steps should be taken to see that no business is lost on account of poor service at the branch. No account should be closed without express approval of the manager on the letter of request for closure of the account. The departmental officer should verify the cheque leaves / books returned unused with the account to ensure that all the unused cheque forms are returned together with requisition slip(s). If any gaps are found in the series of cheques already presented, cheques cancelled

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by the Account Holder and those returned unused, the Cheques Returned Register and the Stopped Cheques Register should be verified to see whether such cheques were once presented and returned or stopped for payment. 2.6 If any cheque is already issued but not presented for payment, the account should not normally be closed, until the cheque is presented. It may be noted that if any cheque is returned with the reason "Account Closed" the prestige of the bank gets affected. Therefore, the constituent should be informed of the same and the account should not be closed until the cheques are presented or the account holder stops payment of such cheques. Similarly, it should be verified from the registers / books of the branch to see whether any cheque / Bill etc., are outstanding under collection / purchase / discounting for that account. If any cheque, Bill etc., is outstanding, the account should be continued till such a cheque / Bills etc., is paid or returned unpaid. Any charges and interest due from the customer should be debited and any interest due to the customer should be credited to the account. If there is any debit balance on the account at the time of closure of the account, the same should be recovered from the account holder together with up to date interest and other charges, if any. The account holder should then be advised to draw a cheque out of the cheques returned unused for the amount of final credit balance available on the account to make the balance NIL. On receipt of instructions from the Branch Manger permitting closure of account after completing the verification process as explained above, the operator should invoke "Closing Entry" option and post the cheque in the relative account. System displays the status of account, pending credits/ debits, interest payable/ due, lien particulars, if any, etc. The concerned officer should verify the particulars. If he finds the particulars as correct, he should authorise closure of account in the system. However, in the case of accounts where ATM facility is extended, the officer should ensure that all cash withdrawals from the account at off-line branches, if any, are adjusted to the debit of the account before its closure. The officer should also ensure that the ATM card is also surrendered by the customer before closure of the account. If the card is lost, a letter to that effect should be obtained from the customer.

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The cheque posted in the account should be put through the usual procedure of payments. The Pass Book should be made up to date in the usual manner after the account is closed. If Pass Book is not originally issued to the account holder, a final statement of account with up to date entries should be prepared /printed from the system in the usual manner for the account. The words "Account closed on ___ " should be written on the last folio in the Pass Book/ Statement. The officer should sign in full below the noting in the Pass Book / Statement and it should be handed over to the account holder against his acknowledgement.

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The account opening form, specimen signature card(s) and other related document(s) of the closed account should be taken out from the respective files / places and kept attached to the letter of request for closure of the account. The words "Account Closed on _____ " should be written in bold letters on all such papers under the signature of the concerned officer and these should be filed in a separate file in the order of dates of closure of the accounts. The file should be properly preserved along with other records. The cheques returned unused should be destroyed immediately together with the relative cheque requisition slip(s) after the account is closed. Such cheques should not be used for reissue by way of loose cheques or in any other manner. Closure on an account on transfer at the request of the account holder is explained in BPC on Transfer of Deposit Accounts Closure of an undesirable account Accounts with petty balances frequently running below the prescribed minimum balance are not remunerative to the bank. Such accounts may therefore be closed after issuing a notice in form No. RF - 18 to the account holder. According to the Notice, the bank is at liberty to close the account in case funds are not forthcoming into the account to bring the balance to the minimum prescribed level within a fortnight from the date of the Notice. Therefore closing of the account should be resorted to if necessary after the expiry of the Notice period. There are other types of undesirable and often dangerous accounts. These accounts are those where the account holders issue cheques without keeping enough funds in their accounts to meet them. The existence of these accounts in the books of the bank would lower the prestige of the bank. Branches should therefore, discourage the account holders from issuing cheques without maintaining adequate provision in their accounts. Fresh cheque book should not be issued to such account holders.

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3. 3.1

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On the first occasion when a cheque is returned for want of funds in the account, attention of the account holder should be drawn and he should be politely requested not to issue cheques without maintaining adequate funds in his account. Form No. RF - 18B may be used for this purpose. If the account holder issues a cheque again without maintaining adequate funds in his account a second letter in form RF-18C should be addressed to him giving the reference to the earlier letter. The second letter clearly indicates that should a third occasion arise involving return of a cheque for financial reason, the bank should be constrained to close the account without any reference to the account holder. Finally, should there be a third instance of returning a cheque for want of balance in the account, the branch may close the account and remit the balance to the account holder by means of a pay order under cover of a letter in form RF-18D. 3.4 3.5 All the letters in form RF - 18 should be sent to the account holder under Registered Post. The letter in form RF - 18D contains a clause to the effect that the account holder should arrange to return the unused cheques before encashing the enclosed Pay Order. Similar clause should be incorporated in the letter enclosing a Pay Order in respect of accounts closed vide Para No 3.1 above. In either case, it should be marked on the Pay Order that it can be encashed only after the unused cheque leaves are returned along with the Pay Order before its presentment. The cheques returned unused should be destroyed immediately together with the relative cheque requisition slip(s) after the account is closed. Such cheques should not be used for reissue by way of loose cheques or in any other manner. 3.6 Almost equally risky is the practice of some of the account holders who issue cheques in anticipation of effects sent by them or who pay in funds almost always at the last moment to meet the cheques already presented. Efforts should be made to discourage this practice among the account holders. Branches should also discourage the practice of issuing stop payment instructions by the account holders often. The staff members who are entrusted with the duties of maintenance of the accounts of the customers, concerned officers as well as the Sub Manager, Manager, Manager Credit, Manager Operations and Branch Head should keep a vigil on the accounts of the customers. If any undesirable account is noticed the staff maintaining the accounts of the customers and the concerned officers should report such instances to the higher officers at the branch to enable them to give instructions for dealing with the accounts.

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