Module: | KYC, NPAs, Advances & Investment Valuations
Q215: Consider the following statements regarding borrower guidance, deceased customer assets, and minor accounts:
1. Minors above the age of 10 years are legally permitted to open and operate savings or term deposit accounts independently.
2. Accounts of minors, when operated independently, are permitted to utilize overdraft facilities up to a maximum limit of ₹5,000.
3. A bank must invariably furnish a copy of the loan agreement and all its enclosures to the borrower at the time of sanction or disbursement.
4. Banks are strictly prohibited from insisting upon legal representation for the release of other assets of deceased borrowers, provided there are no underlying disputes.
Which of the statements given above is/are correct?
2. Accounts of minors, when operated independently, are permitted to utilize overdraft facilities up to a maximum limit of ₹5,000.
3. A bank must invariably furnish a copy of the loan agreement and all its enclosures to the borrower at the time of sanction or disbursement.
4. Banks are strictly prohibited from insisting upon legal representation for the release of other assets of deceased borrowers, provided there are no underlying disputes.
Which of the statements given above is/are correct?
✅ Correct Answer: A
The correct answer is A. Statement 1 is correct: The regulations officially lower the independent banking age, explicitly allowing minors above 10 years of age to open and operate deposit accounts independently to promote financial inclusion.
Statement 2 is incorrect: The guidelines establish an absolute risk barrier, mandating that minor accounts can NEVER utilize overdraft facilities under any circumstances and must strictly maintain a credit balance at all times.
Statement 3 is correct: Transparency mandates require banks to provide a full copy of the loan agreement and all enclosures to the borrower completely free of charge at the time of sanction or disbursement.
Statement 4 is correct: The framework forbids banks from creating unnecessary legal hurdles, strictly prohibiting the demand for legal representation to release a deceased borrower's assets unless there is an active dispute.
Statement 2 is incorrect: The guidelines establish an absolute risk barrier, mandating that minor accounts can NEVER utilize overdraft facilities under any circumstances and must strictly maintain a credit balance at all times.
Statement 3 is correct: Transparency mandates require banks to provide a full copy of the loan agreement and all enclosures to the borrower completely free of charge at the time of sanction or disbursement.
Statement 4 is correct: The framework forbids banks from creating unnecessary legal hurdles, strictly prohibiting the demand for legal representation to release a deceased borrower's assets unless there is an active dispute.