In a world that is increasingly moving toward digital and financial inclusion, it’s essential to recognize that not everyone has the ability to read or write. For illiterate persons, banking can be a daunting task, and there are special provisions in place to ensure that they can access financial services while minimizing the risks of fraud and mismanagement. In this blog, we will explore the key rules and practices for managing accounts for illiterate persons in a secure and transparent manner.
1. The Importance of Clear Communication
Illiterate persons often struggle with written instructions. Therefore, it is crucial that bank officials explain the rules and regulations of the account in simple, understandable language. This communication should be in a language that the illiterate person speaks or understands. This ensures the individual fully comprehends their rights and responsibilities when opening and operating an account.
2. Withdrawal Procedures: Personal Presence Required
A significant rule for illiterate account holders is that they must personally visit the bank with their passbook to make withdrawals. This ensures that the account holder is physically present for each transaction, reducing the likelihood of fraud. It also prevents the account from being misused by others who might have unauthorized access.
3. Restrictions on Cheque Books
To prevent misuse, banks should not issue cheque books to illiterate persons under any circumstances, even in joint accounts. This is a critical security measure, as cheques can be easily misappropriated or manipulated by others, particularly when the account holder cannot read or write.
4. Thumb Impression as a Secure Identifier
Instead of a signature, illiterate persons provide a thumb impression on the account opening form. This thumbprint acts as a secure identifier and is obtained in the presence of an authorized bank officer and a trusted person who attests to the authenticity of the thumb impression. This process ensures that the account holder’s identity is verified without relying on literacy skills.
5. Photographs for Identification
As with any bank account, a passport-size photograph of the illiterate person is required. One photograph is attached to the account opening form, and another is placed in the passbook. This helps the bank verify the identity of the account holder and adds another layer of security to the account.
6. Oral Confirmation for Withdrawals
Every time an illiterate account holder makes a withdrawal, they must confirm the transaction orally to an authorized bank official. This confirmation adds an extra layer of security, ensuring that the person is aware of the transaction being made on their behalf.
7. Allowing a Literate Person to Operate the Account
If the illiterate person wishes to delegate account operations to a literate individual, they must submit an authorization cum indemnity letter. This letter specifies that the account will only be operated jointly by both the illiterate account holder and the authorized literate person. This ensures that the account remains secure and prevents unauthorized access.
Conclusion: Banking with Dignity and Security
By following these guidelines, banks can ensure that illiterate persons have access to financial services in a secure and dignified manner. These measures protect illiterate account holders from potential fraud and help them manage their finances responsibly. Financial institutions play a crucial role in promoting inclusion by ensuring that their services are accessible to everyone, regardless of their literacy level. If you know someone who is illiterate and unsure about how to open or manage a bank account, speak with them and decode contents of this blog with them. Let’s ensure that everyone, regardless of their literacy, has the tools to navigate their financial future safely.
