Do you want to open a bank account online without visiting a bank? It is possible though there may be certain limitations due to security reasons. In every country, the legal system expects every bank to carry out due diligence before opening a bank account online or offline. This helps to curtail the activities of fraudsters and imposters.
The level of caution to be taken when opening or closing an account depends on the type of customer, type of account, and account position at the given period.
In-depth enquiries are usually carried out on current account or domiciliary accounts, also for a savings account as well as a time deposit account, enquiries might not be like the current account.
The fact remains that
the bank must maintain the general rule which every bank must adhere to and also to act in good faith when opening and closing an account.
The English cheques act of the year 1957 states that every bank must act “in good faith and without negligence” this is to avoid being liable for the cheques collected for its customers.
In bank practice, banks are held liable when they collect a cheque that is either stolen or forged. The bank also is liable to repay the true owner of the cheque. This bank practice was established between the year 1914 and 1915.
It is important to note that even when a bank obtains a reference. It still does not exonerate the bank from liability. If the person acting is unknown to the bank. The individual has or needs to be verified. If the verification of the individual is not made and the reference later proves to be a forgery. The said bank will then be considered to have been negligent.
Meanwhile, in a situation where the referee was deceived by the customer. The bank is exempted from liability. Money deposited in the bank becomes the bank’s liability, that is the reason why for a bank to avoid liability arising from the opening of an account, the banks often do all they can to analyze the customer as if he or she is coming for a loan.
So, the process of opening a bank account online may not be completed online. You may have to visit the bank at some point and also provide all the necessary information that will enable the bank to carry out its due diligence. However, the online process is straightforward and less stressful.
How To Open A Bank Account Online With A Commercial Bank
The steps to be taken (By the Customer and the Bank) when opening a bank account online, are listed below;
Steps 1 – Obtain an online application form from the bank where you want to open the account, meanwhile on the part of the bank. The bank will especially in a situation where the account is to be operated for more than one person. Provide an application can still be in a bank standard application form.
Step 2 – Provide the necessary or required documents needed for the account while the bank obtains documents authorizing the opening of the account if it is a society or business account. Documents include (i) Certificate of incorporation or registration of the business name (ii) Minutes extract or resolution passed by the executive committee council, or Board of Directors, (iii) Memorandum and articles of association, or constitution, (iv) Trading certificate as the case may be, etc
Step 3 – The Bank will then make preliminary enquiries and get two references (this will be applicable when the account is a current account).
Step 4 – The bank will then take a mandate from the customer. The mandates provide all the required information about the customer as well as stating how the account will be operated. The fact remains that banks still provide a standard mandate form that will be completed by the customer.
The mandate form will have the following information; (i) Name, (ii) Type of account to open, (iii) Address of the customer, (iv) Employer, (v) Name of spouse, (vi) Age, (vii) Spouse’s employer, (viii) Spouse’s employer, (ix) Specimen signature of those to serve as the signatories to the account, (x) How many to sign
Step 5 – Take specific instructions on the number of signatories required to sign cheques and other instruments. That’s is in a situation where more than one person is to operate the account.
Step 6 – Issue a deposit or pay in slip to the customer with which he makes a deposit into the new account.
Step 7 – Open a ledge account for the customer, assign him an account number and enter the number in the bank’s open and close register.