Some weeks ago, we dwelled extensively on the issue of banker-customer relationship.
This topic, which we discussed in three separate editions, appeared to be inexhaustible apparently since it forms the centre of this whole column.
With persistent messages from readers, we shall always go back to pick some details missed out in the previous discussions and which were highlighted through readers’ questions and comments.
Today, we shall be revisiting the issue of death of a bank customer. Recall that the last discussion we had on this had to do with joint or partnership bank account; that is when one of the partners or co-account owner dies.
Here now, we shall be focusing on individual customer, when he dies, what happens to his bank account.
First, we must bear in mind that once a customer, an account holder dies, the banking relationship will be determined (considered ended) immediately the bank receives a notice or information of the customer’s death. In other words, the customer’s account opening mandate, which is a kind of contractual agreement between the bank and the customer, stands invalidated. This is backed up by section 75 of Bills of Exchanged Act 1990.
Immediately the bank is aware of the customer’s death, transactions, especially withdrawals on the account, must stop even if cheques presented have been signed by the customer before his death, as in cases where people sign-dawn cheques for their aides or assistants when they are not going to be around to do the signing. Such cheques would be returned unpaid with remark ‘’dd’’(drawer deceased).
Usually, the notice of death is brought to the bank by the deceased relation; but the bank will want to see the death certificate. However, this presupposes that transactions may continue in the account even when the customer is dead just because the bank is not well informed of the death.
But once the appropriate notification is received by the bank, even cheques already paid will not be debited against the customer’s account, in which case the payment is deemed to have been made in error.
Bank customers’ forum
My account was debited with N50,000 early this year without my authorisation. When I found out after about one month, my bank claimed that I issued a cheque in favour of one Mr. Kingsley Odion. I have never met or known any such person. Therefore, I insisted that the bank should refund my money but they only apologised and insisted they did no wrong. What are the options I have to get my money back?
Advice
A few facts need to be established here. First, you need to go through your cheque book to be sure you did not forget that time you issued such cheque. But if you confirm you do not know the payee, then obviously, a cheque leaf was torn out from your cheque book by someone close to you who used another person not known to you to effect a withdrawal to avoid detection. Obviously, your bank would show you the cheque paid and if it is your cheque, then it must have been stolen with your signature correctly forged; you have little or no redress since it is your responsibility to secure your cheque book.
You can demand for your account opening mandate to be sure the transaction complied with your mandate, especially with regards to cheque confirmation before payment.
Terminologies
Closing entry
This is an accounting entry that is passed to carry forward the balance of an unbalanced account to the next accounting period. This is done in order to give a complete picture of the true position of the account and of course present a balanced account.
Credit appraisal
This is an evaluation process that every loan application goes through to determine its success.
If a bank customer or any person applies for a loan, the bank runs a complete check on his/her credit profile to collect information on residence, age, occupation, service experience and the years of service as applicable to the present job. Among these, the institution will also check if the person has taken any other loan. The same goes for a business or company that seeks a loan with a bank. Here the information gathering will focus on the business profile and history of the company. This entire process is referred to as credit appraisal.
Credit card
This is the type of payment card that can be used repeatedly by the cardholders to borrow money or make purchases on credit.
The card is usually issued by banks, credit unions, retail stores and businesses and they generally charge specific interest rate or fees upon usage.
In Nigeria, this card is not popular but the reverse of it is debit card, which basically ATM Card in Nigeria qualifies for.