DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : G.Rajeswari
Designation : Senior Lecturer
Branch : Commercial and Computer Practice
Institute : Government Polytechnic, Srikakulam
Year/Semester : V semester
Subject : Banking
Subject code : CCP 504(B)
Topic : Customer Services in Banks
Duration : 50mts
Sub topic : Bankers duties in case of Accounts in
the name the of ‘Minors
Teaching Aids : PPT, Animation

CCP504(B).39 1
Banker’s duties in Case of Minors

Objectives:-

On completion of this Topic, you would be able

to:

 Know the Banker’s duties in case of a Minor.

CCP504(B).39 2
Recap

• The Various Types of Special Customers are :

• Minors
• Lunatics
• Drunkards
• Married women
• Illiterates .

CCP504(B).39 3
The Various Types of Special Customers are
• Joint Accounts.
• Partnerships.
• Joint Stock Companies.
• Executors and Administrators.
• Joint Hindu Family firms.
• Educational Institutions, Charitable Associations,
Clubs etc.,

CCP504(B).39 4
Banker’s duties in case of a Minor
Introduction
1. Who is a Minor ?
2. Can a Minor open a bank account in his
name?
 According to Indian Majority Act of 1875, a
person is minor till he has completed the age of
18 years
 But where guardian is attached to the minor, then
he attains majority after completing 21 years

CCP504(B).39 5
 Banker’s duties in case of a Minor

1.According to Indian contracts Act 1872, a minor can

not enter into an agreement.
2.All agreements entered into by him are absolutely
void, except for necessaries of life and for his
benefit.
3.Even on attaining majority, he cannot ratify a
contract which was initially void.

CCP504(B).39 6
 Banker’s duties in case of a Minor

1.But a minor can open a bank account in his name

or in the name of his guardian.
2.There is no risk at all in opening an account in the
name of a minor.
3.The Banker can allow a minor to operate his
account by himself so long as it shows a credit
balance and he has attained the age of 12 years.

CCP504(B).39 7
The Banker should take care of the
following points when an account is
opened in the name of a Minor:-

1. Money can not be lent to a minor.

2. Minor should not be allowed to overdraw his
account.
3. A minor can give valid discharge of money
paid to him.
4. Joint accounts can also be opened by two
minors.
CCP504(B).39 8
MINOR – BANKER RESPONSIBILITY

• A minor may draw, endorse or negotiate a cheque

or bill and pass on a good title to holder.
• The age of majority should be carefully recorded
and diarized by the banker.
• The banker has to ask the minor to open a fresh
account in his name immediately on attaining the
majority.

CCP504(B).39 9
Minor as agent

 A minor can act as agent of another person

competent to contract provided he is duty
authoritised.
 For instance ,minor son may make contracts besides
indorsing cheques and bills on behalf of his father.
 He can even borrow on behalf of his father if has a
distant authority to do so.

CCP504(B).39 10
Minor as Partner

 There is nothing to prevent a from becoming a

Partner in a firm and transacting business on his
behalf
 However, he cannot held liable for any debts of the
partnership incurred before he attains majority

CCP504(B).39 11
Summary
 A person is called a minor till he has completed
the age of 18 years.
 Banker can allow a minor to open an account in
his name.
 There is no risk for the bank to allow the minor to
operate his account as long as it shows a credit
balance.
 But the minor should complete 12 years of age.

 CCP504(B).39 12
Summary
 Loans should not be given to minors.
 No overdraft facility should be allowed.
 Minor can not be sued in respect of a cheque or bill
 On attaining majority, the banker should ask the
minor to open a fresh account in his name.

CCP504(B).39 13
Quiz

1. A person who is below 18 years is called

• Minor
• Major
• Worker
• None

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Quiz

• Can a Banker give loans to a minor ?

a. Yes
b. No

CCP504(B).39 15
Frequently Asked Questions

• Who is a Minor ?
• Can a Banker open a Bank account in the name
of a minor ?
• What precautions are to be taken by a banker in
case of opening an account in the name of a
minor ?

CCP504(B).39 16
Assignment:

1. Visit the your nearest bank and find out whether

any minor has an account in that bank.
2. Ask the procedure they adopt in case of minors
in opening an account

CCP504(B).39 17