Banking News

Who can open Savings Bank (SB) Account in Banks ?

Savings Bank (SB) accounts are opened in the bank mainly for saving purpose. Customers  cannot open an SB account for business purpose.   Let us find out who are eligible and who are not to open SB accounts.

The following entities are eligible to open SB accounts in a bank:-

 (i)   SB Accounts may be opened in the name of Individuals (Resident or Non-Non-Resident)

(ii) Associations, Societies, educational institutions and Hindu Undivided Family (HUF) and Trusts, so long as the account not used for trading purpose. [Government of India Notification dated November 12, 2009- Rule 2 sub-rule (1) clause (ca) defines Non-Profit Organization (NPO). NPO means any entity or organisation that is registered as a trust or a society under the Societies Registration Act, 1860 or any similar State legislation or a company registered under section 25 of the Companies Act, 1956.(RBI circular/2011- 12/72 DBOD. AML. BC. No. 2 /14 .01.001/2011-12 July 1, 2011)]

(iii)  Primary co-op society which is being financed by the bank.

(iv)   Khadi & Village industries Board.

(v)   Agriculture Produce Marketing Committee.

(vi)  Societies registered under Societies registration Act.

(vii) Companies registered under companies act which have been licensed by Central Government under  corresponding provision of  section 25 Companies Act 1913 and without  permission to add  the word “Limited” or “Pvt. Limited” to their names.

(viii) Government Departments/bodies/agencies in respect of grants/subsidies released for implementation of various programmes /schemes.

(ix)         Institution other than mentioned above and whose entire income is exempt from payment of Income Tax under IT Act.1961

(x)          Development of women and children in rural area (DWCRA).

(xi)         Self Help Group. (SHG) registered or unregistered

(xii) Farmers Club- Vikas Volunteer Vahini (VVV)

(xiii)      Any other institution permitted by RBI from time to time

 The following entities are not eligible to open a SB account in a bank:-

  1. Any trading or business concern.
  2.  Government department/bodies depending upon budgetary allocation for performance of their functions.
  3. Panchayat Samitis/ Municipal Corporation/Committees
  4. State Housing Boards
  5. Industrial Development Authorities
  6. State Electricity Boards
  7. Water/Sewerage/Drainage Boards
  8. State Text Book publishing corporations/Societies
  9. Metropolitan Development Authorities
  10. State/District level co-operative Societies
  11. Other banks including Regional Rural Banks, Co-operative Banks and Land Development Banks
  12. Political Parties


(8) Comments

    1. Surendra NaikSurendra Naik - Post author

      Bank will not accept your request for SB account as Coaching Center/class is a commercial activity. You have to open SB account in your individual name or open a Current account in the name of coaching class.

  1. Vinod Bhat

    Sir, Can BSNL open an SB account for daily remittance of their collection, as the money is sweeper kutto a CA everyday evening, and

    1. Surendra NaikSurendra Naik - Post author

      BSNL, though a Government undertaking, is a commercial entity, SB account cannot be opened in their name.If they want earn interest on short term balance in their account, you may suggest them to open a current account and give standing instruction to the bank to transfer accumulated balance to shortest term deposits, alwaysleaving minimum balance of say Rs.10 lakhs in the account. They may also give an instruction to the branch to close the short term deposit before maturity if any cheque for large amount to be cleared.

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