A new cosmopolitan club is started in your service area.
As a BM of the branch, I was invited for the clubs
meeting. I will take this opportunity to meet office bearers of the club and request them to open clubs
account.
Essential Information for Opening a Bank Account for Your Club
Documents Required for Opening an SB Account for Clubs Registered under Section 8 of the Companies Act 2013:
1. Bye-Laws
2. List of Office Bearers/Authorized Signatories
3. Certificate of IT Exemption
4. Registration Certificate
5. Memorandum of Association (MOA) and Articles of Association (AOA)
6. Board Resolution
7. Permanent Account Number (PAN) Card:
8. Identity and Address Proof
List of Important documents required For Clubs Registered as Charitable Trusts:
Bye-Laws
Certificate of IT Exemption
Trust Deed
Registration Certificate
PAN Card
Board Resolution
Identity and Address Proof
Proof of Address of the Trust
List of Trustees
Rate of Interest (ROI) on SB Deposit and Term Deposits
The ROI on savings and term deposits can vary based on the bank and the specific terms of the deposit.
Generally:
Savings Bank Deposit: Interest rates typically range from 2.5% to 4% per annum.
Term Deposits: Interest rates usually range from 5% to 7% per annum, depending on the tenure of the deposit and
the bank.
To maximize returns, the Club might consider:
Comparing Rates: Check rates offered by different banks.
Long-Term Deposits: Often offer higher interest rates.
Tax-Saving Deposits: Some term deposits might offer tax benefits.
Election of Office Bearers and Bank Account Operations
Election of Office Bearers:
Procedure: The election of office bearers should follow the guidelines specified in the organization's governing
documents, such as the Memorandum of Association or Trust Deed. Typically, this involves holding elections during
the Annual General Meeting (AGM) or at special meetings as outlined in the organization's bye-laws.
Documentation: Ensure that the results and appointments are documented in official minutes and updated in the
governing records.
Opening and Operating the Bank Account:
Submission of Required Documents: Provide all necessary documentation, including bye-laws, a list of office
bearers, proof of address, PAN cards, and a resolution from the governing body authorizing account operations.
KYC (Know Your Customer) Compliance: Complete the bank's KYC requirements, which include verifying the
identity and address of the authorized signatories and the organization itself.
A/C Operation-
Board Resolution: A formal resolution passed by the governing body, authorizing specific individuals to manage and
operate the bank account.
Office Bearers: Specific individuals such as the President, Secretary, Treasurer, or other key office bearers may be
designated as authorized signatories based on the organization's bye-laws or governing documents.
Eligibility for Loan Facilities for Charitable Trusts
Charitable Trusts can be eligible for loan facilities, but eligibility typically depends on several factors and varies
between financial institutions.
Purpose of the Loan:
Alignment with Charitable Objectives: Loans must be used for purposes that align with the trust’s charitable
objectives. This includes funding for specific projects, infrastructure development, or operational needs that support
the trust's mission.
Creditworthiness:
1. Financial Stability: Charitable Trusts must demonstrate financial stability and the ability to repay the loan.
Banks assess this through the trust’s financial statements, cash flow, and overall financial health.
2. History and Reputation: A strong track record of financial management and a good reputation can positively
influence loan eligibility.
Bank Policies:
1. Varying Criteria: Different banks have specific policies and criteria for lending to charitable organizations.
Some may offer tailored loan products with favourable terms for trusts.
2. Documentation Required: Typically includes financial statements, project proposals, and a resolution from
the governing body authorizing the loan application.
Tax and Regulatory Considerations:
Tax Exemption Status: Trusts with tax-exempt status under Sections 11/12 of the Income Tax Act (in India) may find
that banks are more willing to offer loans, as this status demonstrates compliance with regulatory requirements.