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 Partnership
firms
Teaching Aids : PPT, Animation
CCP504(B).40 1
Banker’s duties in Case of Partnership
firms
Objectives:-
On completion of this Topic, you would be able to:
 Understand the banker’s duty while opening
accounts in the name of partnership firms.

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Questions for Students

1. What is Partnership ?
2. How may Members are required to form a
Partnership firm ?
3. What is the maximum number of members in a
partnership firm ?
4. Can firms open an account with the banker.

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Definition of Partnership firm
Sec 4 of Indian Companies Act, 1932 defines :
“Partnership is the relation between persons who
have agreed to share the profits of a business carried
on by all or any of them acting for all”.
 The partnership is a profit making organization.
 The essence of a partnership is profit.
 A non-profit making association can not be a
partnership.

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The precautions to be followed by a
banker in case of partnership firms

• The account should be opened in the name of the

firm and not in the name of individual partner or
names of partners.
• All the partners must sign in the account opening
form to open an account.
• The Banker has to verify the existence of the firm.
• It is always preferable to obtain a mandate giving
details about the operation of the account.

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Partnership Firm -Precautions

1. A Banker should carefully see the partnership

deed to know if there are any special regulations
for raising of funds
2. If a minor is a partner, as soon as he attains
majority, the banker should complete all the
formalities to make him personally liable as any
other partner

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Partnership Firm -Precautions

1. Mandate in writing signal by all the partners in

respect of
a) The name (s) or the Partners who is / are
authorised to draw cheque
b) Entitled to borrow money on behalf of the extent
of their authority
c) Having power to mortgage or sell the property
of the firm

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Precautions

 Notice in respect of retrieving of a partner must be

given to the banker
 Notice in respect of death of a Partner must be
given to the banker with a fresh mandate
 In case of solvency of a firm ,the banker has to
close the “Firm’s Account” after receiving the
notice of insolvency of a firm

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 Precautions
1. In case of a admission of a new Partner into the
firm ,a change in the construction of the firm is
required and must be signed by all the partners
2. Distinguish between the firm's cheque and
Partner’s individual cheque

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Summary

The Banker should take certain precautions

while opening accounts in the name of
partnership firms. They are:
1. The account should be opened in the name
of the firm.
2. The account has to verify the existence of the
firm.
3. He has to obtain a mandate regarding
operation of the account.
. CCP504(B).40 10
Summary

3. He should verify the partnership deed carefully

before giving loans
4. When there is a minor partner , the banker should
complete all the formalities as soon as he attains
majority to make him liable personally as any other
partner

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Quiz

• Bank account should be opened in the

name of
• Firm
• All the Partners
• Individual Partners
• All the above

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Quiz

• Can a Minor become a Partner ?

a) Yes
b) No

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Frequently asked Question

• What precautions are necessary when a

partnership firm opens an account with a banker?

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Assignment:

 Visit the nearest bank of your town or village and

enquire how may partnership firms have accounts
in that bank?
 Find out the procedure they adopt in opening
accounts in the name of Partnership firms.

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