Question

1. A joint account involves an account owned and operated by two or more individuals other than a partnership or trust. As a banker, how will you handle the following exercises relating to joint accounts?
(a) Explain in detail the two incidents of Joint Accounts – Right of survivorship and Joint Liability – to Mr. & Mrs. Dacosta Aboagye who have requested to open a joint account with your bank.
(b) List and explain 6 clauses that can be found in a joint account mandate form.

Answer 1

a) Two incidents of joint accounts explained to Mr.&Mrs. Dacosta Aboagye are:-

(i) Right of survivorship:- This right is given to those person who purchase something with another person i.e two or more. In this case two person have requested to open joint account. This right impact when one person dies and other survives and survivor become the sole owner of the that property or account. Example:- In this case if Mr. Dacosta Aboagye dies then Mrs. Dacosta Aboagye become the sole owner of the Account. This is the Right of Survivorship if one dies then other become the whole owner of said account.

(ii) Joint liability:- In joint liabilty both have liability towards the bank in case one defaults with bank where both are libale to payback to bank but some times first person held more resposible in saving account but other accounts like current account or loan account both are equilly liable to bank in case of default.In joint account all joint holder are liable for all the dealings in an account as a single or joint entity.

b) Clause that can be found in joint account mandate form:-

i) Either or survivor :- In this case both can operate the account and if one dies then survivor can operate the account. In case of nommine when both dies then he will get the fund

ii) Anyone or survivor :- it is given when more then 2 joint account holders  are there .If anyone of then dies then the reammaning holder can operate the account.

iii) Former or survivor:- in this the former(first applicant) i.e first account holder, has the authority to operate the account .If he dies only then the survivor get the right to operate the account.

iv) Latter or survivor :- in this the latter(second applicant) has the authority to operate the account .If he dies only then the survivor get the right to operate the account.

v) Power of Attorney :- if the joint holder want give the power to operate the account to another person then the power of attorney should be signed by all the joint holders.

vi) Authoeised signatories :- who has the authority to sign on Cheque, Neft or Rtgs they can be both or single .