Procedure or Process of Closing a Bank Account

 

Process of Closing Saving and Current Accounts

On the Request of the Customer

The customers who want to close the current and saving account should visit the bank with the application. They should give the application along with the checkbook to close the account. The bank takes some minimum charges for the closing account, which is below 6 months. After receiving all the applications with all such documents the bank makes the decision to close the account, and the contractual relationship with the bank and customer comes to an end and account is closed itself and the bank does not ask for the reason to close the account.

On the Decision of the Bank

The customer's current and saving accounts can be closed on the bank's decision. But the bank cannot close the account without giving any notice to the customers. If the account is closed without giving any notice, later the customer may challenge or file a case against the bank before a court of law and the court may cancel the decision of closing the account, so it is necessary to give notice. The bank can a decision to close the customers' account on the following conditions:

• If the bank is cheated with forgery and counterfeit
• If an attempt is made to create unnecessary problems against the bank which is illegal to raise the issue against it.
• IF the court declared the customers to be incompetent to conclude a contract with the bank and if the customer commits an offense has been proved by court.
• There may be other reasons.

On Customer's Death

The bank should close the account immediately after it received the notice of the death of the customer who has an account in a bank. No cheque should be paid after the death of the customer. The cheque drawn after the customers' death may be illegal or it may have not legal validity. But the person who is willed (nominated) by the account holder when he opened the account should be paid all the amount and the bank should close the account. But all the legal processes lie submitting the certificate of death, checkbook, debit card, and other essential documents like proof of relationship should be completed.

If the person nominated is dead or not available for a very long time  (for more than 12 years) or the account holder has no nominee, under section 23 of the Commercial Bank Act 2031 (1974), all the amount in the name of the account holder should be given to the close relative of the dead man, of the following order;

1. Husband or wife; living in an undivided family
2. Son or daughter living in an undivided family
3. Father, mother, grandson, or granddaughter from the son side living in an undivided family.
4. Husband, wife, son, unmarried daughter, father, mother living separately.
5. Grandfather, grandmother of the father side, brother, unmarried sister, widowed daughter in law, in an undivided family or married daughter.
6. Nephew, niece, stepmother living in an undivided family or grandson or unmarried granddaughter from son side who is living separately.
7. Uncle, widowed, aunt, sister-in-law, or granddaughter-in-law living in an undivided family.
8. Brothers living separately
9. Married sisters, grandfather, grandmother, widowed daughter in law, granddaughter in the law of nephew who is living separately.

Customer's Insanity

A customer's insanity automatically renders him incapable to contract. Upon notice of insanity, the authority given to the banker to act as his customer's agent is also revoked. Notice of insanity of the customer also revokes the banker's authority to honor his customers' cheque. However, a banker should not go by rumors and should treat his customers as sane unless there is fairly conclusive proof in support of his customer's insanity.

 

Insolvency or Winding Up

Insolvency in the case of individual customers and winding up in the case of corporate customers terminate the authority of a banker to paycheque or to accept or honor bills or take any other action on behalf of such customers. A banker is bound to transfer to the official assignee or liquidator the credit balance, if any, in the account. A banker cannot deal with such a customer's property or honor his cheque if he has notice either of the petition or an act of insolvency on the part of his customer.

Procedure or Process for Closing Fixed Deposit Account

A fixed deposit account is not like a current and saving account which goes running continuously for a long time. In the fixed deposit account, the customer deposits his money in the bank for a fixed time. so, the bank does not give the checkbook ad bank statement to the customer of the fixed deposit account because the rate of interest on the fixed amount is fixed for a certain period. So, the bank gives a receipt of the fixed deposit account as proof of deposits at the time of opening the account. This is everything about the account. This field deposit is opened for the fixed time, so after the expiry of the fixed period, the relation between the bank and the customer comes to an end automatically or the fixed deposit account ends automatically. If the customer with the receipt of the fixed deposit visits the bank after the time is over, can get the total amount of the capital and the interest after that the account remains close forever. But if the customer wants to keep in continue, he may renew it. This depends on his will. The deposit transfers to the nominated person on the death of the account holder. If his nominated person is dead or he had not nominated anyone, the person can claim the deposited amount under Section 23 of the Commercial Ban act 2031 (1974). But without presenting the documents including the evidence of customers' death, relationship proof, and other relevant documents and without evaluating and analyzing them, the payment may not be given.