Did you know...

...about the various rules that govern banking transactions? Here are some that can make your dealings smoother, more convenient and less time-consuming. 

A bank cannot refuse to open an account if a customer does not make a nomination.
The Allahabad High Court recently observed, “It will be appropriate that the Reserve Bank of India issue guidelines to the effect that no savings account or fixed deposit in a single name be accepted unless the name of the nominee is given by the depositors.” The idea is to save the dependants the trouble of long-drawn court proceedings to claim money that lawfully belongs to them. Following this judgement, RBI has asked all banks to create space for filling in the nominee’s name in passbooks, statement of accounts and fixed deposit receipts. However, the bank can’t reject you as a customer if you are unable to make a nomination.

If the person opening the account does not want to name a beneficiary, he has to submit a letter, addressed to the branch manager, stating the same. However, according to the apex bank, “If the customer declines to give such a letter, the bank should record the fact on the account opening form and proceed with the opening of the account.”

Banks can charge an interest rate without reference to their benchmark prime lending rate (BPLR).
Banks can determine their rates of interest regardless of the loan size in the following cases:

1. Loans for consumer durables.
2. Loans to individuals against shares and debentures/bonds.
3. Advances and overdrafts against domestic, NRI or foreign currency deposits, provided these are in the name of the borrower, or the borrower with another person.
4. Non-priority sector personal loans, including credit card dues.
5. Loans, advances or overdrafts against commodities, subject to the Selective Credit Control policy guidelines.
6. Loans covered by refinance schemes of term lending bodies.

All figures in banking transactions have to be rounded off.
All transactions, including the payment of interest on deposits or charging of interest on advances, have to be rounded off to the nearest rupee—fractions above 50 paise should be rounded off to the next higher rupee and fractions of less than 50 paise should be ignored. However, banks can’t refuse cheques or drafts that are drawn in fractions.

Banks are allowed to demand fixed deposits as security for lockers.
Though RBI has prohibited banks from linking the locker facility with placement of fixed or any other deposit, this restrictive practice is still allowed as a risk management tool. Banks often face situations, where the locker owner neither operates the locker nor pays rent regularly. Hence, they can demand a fixed deposit covering three years’ rent and other charges at the time of allotment.