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JAIIB Paper 2 • General Banking Operations
Opening Accounts of Various Types of Customers
A bank teller opening an account for a school-going minor follows very different rules from one opening a current account for a five-partner trading firm. Covers account-opening norms for individuals, minors, illiterate persons, HUFs, partnership firms, companies, trusts, societies, current account norms, photograph requirements, and the Legal Entity Identifier (LEI), with 50 exam-style MCQs with hidden answers.
📅 Updated: September 2026 • 30 min read
📊 At a Glance
Customer Type
Key Requirement
Minor
Account via natural/legal guardian, or self-operated (10+ years, per bank policy)
Illiterate person
Thumb impression + photograph; passbook system encouraged
HUF
Declaration signed by Karta and all major coparceners
Company
Board resolution + Certificate of Incorporation + MOA/AOA
1 Personal Accounts
👤
Individual (Resident)
Standard KYC — Officially Valid Document (OVD) for identity and address, PAN/Form 60, recent photograph.
👥
Joint Account
Two or more individuals; mode of operation (Either or Survivor, Jointly, Former or Survivor) specified at opening.
🧒
Minor's Account
Opened/operated by a natural guardian (parent) or court-appointed legal guardian; banks may allow minors above a threshold age (commonly 10 years) to operate accounts independently under a simplified product, per internal policy.
✍️
Illiterate Person
Account opened with thumb/toe impression in the presence of a bank official plus a witness; photograph mandatory; passbook facility encouraged over chequebook.
🦯
Blind / Visually Impaired Person
Cannot be denied banking facilities; account opened after satisfying the bank official that the customer understands the account terms, generally with an identification mark and a witness.
🧑🦳
Senior Citizens / Differently-abled
Banks must provide basic banking facilities such as cheque collection and enhanced service at counters; doorstep banking encouraged per RBI guidance.
JAIIB tip: A minor's account can never be allowed to run into a debit balance (overdraft) since a minor's contract is void ab initio — this is a favourite examiner trap.
2 Accounts of Other Customers
🏠
Hindu Undivided Family (HUF)
Karta operates the account; a declaration/HUF letter signed by the Karta and all major coparceners lists the family members and authorises the Karta to operate on the family's behalf.
🤝
Partnership Firm
Account opened in the firm's name based on a Partnership Deed; a Partnership Letter signed by all partners specifies operating authority; partners are jointly and severally liable.
🏢
Company (Ltd./Pvt. Ltd.)
Certified copy of Board Resolution authorising the account and specifying signatories, Certificate of Incorporation, Memorandum & Articles of Association (MOA/AOA), list of directors.
⚖️
Trust
Certified copy of the Trust Deed, list of trustees, and a resolution authorising the account to be opened and operated.
🏛️
Society / Association / Club
Certified copy of bye-laws, Certificate of Registration, and a resolution of the managing committee authorising the account.
🏗️
Sole Proprietorship
Any two of: registration certificate, GST registration, licence/certificate from municipal authorities, IT returns, utility bills, in the proprietor's name, in addition to the proprietor's own KYC.
3 Norms for Opening Current Accounts
Current accounts carry heightened due diligence given higher transaction volumes and business use. RBI has tightened multiple banking arrangement (MBA) discipline for current accounts:
Banks must check with other lenders/verify credit exposure before opening a current account for a borrower who already enjoys credit facilities (cash credit/overdraft) from the banking system, to prevent diversion of funds and evasion of the lending bank's control.
For borrowers with exposure below prescribed thresholds, banks may open current accounts subject to obtaining an undertaking that they will inform the concerned bank.
For borrowers with exposure at or above prescribed thresholds, current accounts can only be opened by banks that are part of the consortium/MBA, or with specific No-Objection from the lending banks.
Non-observance attracts monitoring as a significant deficiency, impacting the account's regulatory classification.
💡
Memory Trick: "Current Accounts Need Checking"
The current-account discipline exists because unchecked account-opening lets a borrower siphon cash-credit funds through a current account at another bank, defeating the lending bank's monitoring — hence the cross-checking mandate.
4 Photographs of Account Holders
Recent photographs are mandatory for all account holders (and joint holders, guardians of minors, trustees, and mandate holders) as part of KYC. Two clear, recent photographs are typically obtained at account opening — one retained by the branch, and increasingly digitised and stored within the CBS/CKYCR record rather than physically.
5 Legal Entity Identifier (LEI)
🔟
A 20-Character Global ID for Legal Entities
The Legal Entity Identifier (LEI) is a unique 20-character alpha-numeric code, based on the ISO 17442 standard, that identifies parties to financial transactions worldwide. In India, LEI is mandated by RBI for large corporate borrowers (above prescribed exposure thresholds, e.g. ₹5 crore and above) and for participants in large-value transactions in centralised payment systems (RTGS/NEFT above a threshold) and the OTC derivatives/non-derivative forex markets.
Why it matters: LEI enables regulators to accurately identify and aggregate a single corporate group's exposures across multiple banks — a key lesson from the Global Financial Crisis, where fragmented counterparty identification obscured systemic risk.
✓ Key Takeaways
Personal accounts span individuals, joint holders, minors (via guardian, or self-operated above a threshold age), illiterate persons (thumb impression + witness), and the visually impaired (cannot be denied banking facilities).
A minor's account can never run a debit balance — a minor's contract is void ab initio.
Non-individual accounts (HUF, partnership, company, trust, society, sole proprietorship) each need entity-specific constitutive documents — Karta declaration, Partnership Letter, Board Resolution + MOA/AOA, Trust Deed, bye-laws, or business-proof documents respectively.
Current account opening for existing borrowers requires cross-checking with the lending bank to prevent diversion of cash-credit funds — an RBI discipline measure.
LEI is a 20-character global identifier mandated for large corporate borrowers and large-value payment/forex/derivatives transactions in India.
📝 Top 50 JAIIB-Style MCQs on Opening Accounts of Various Customers
Test your understanding with these 50 practice MCQs, closely modelled on the JAIIB (PPB) exam pattern. Each question has 5 options — the correct answer is hidden by default; tap "Show Answer" to reveal it along with a short explanation.
👤 Personal Accounts
1 An account for a minor is typically opened and operated by:
A. A natural or court-appointed legal guardian
B. Any random relative without documentation
C. The bank manager personally
D. RBI directly
E. No one; minors cannot have accounts
Answer: A. A minor's account is opened/operated by a natural or legal guardian.
2 A minor's savings account:
A. Can never be allowed to run into a debit balance
B. Can always be overdrawn freely
C. Must always carry a cheque book
D. Cannot earn any interest
E. Must be jointly held with a stranger
Answer: A. A minor's contract is void ab initio, so no overdraft/debit balance is allowed.
3 For an illiterate person's account, the bank typically obtains:
A. Thumb/toe impression and a photograph, in the presence of a witness
B. A signature only, with no other verification
C. No identification at all
D. A notarised passport only
E. Nothing; illiterate persons cannot open accounts
Answer: A. Thumb impression, photograph and a witness are required for illiterate customers.
4 A visually impaired person seeking to open a bank account:
A. Cannot be denied banking facilities
B. Is automatically barred from opening any account
C. Can only open a joint account with a sighted person
D. Requires a court order
E. Can only deposit cash, never withdraw
Answer: A. Visually impaired persons cannot be denied banking facilities.
5 Which mode of operation in a joint account allows any one holder to operate the account alone, with the account continuing on the death of one holder?
A. Either or Survivor
B. Jointly only
C. Jointly and severally, requiring all signatures always
D. None of these allow survivorship
E. Former or Survivor only when both are alive
Answer: A. "Either or Survivor" allows any holder to operate; it continues with the survivor.
🏢 Accounts of Other Customers
6 In an HUF account, who typically operates the account on the family's behalf?
A. The Karta
B. Any coparcener at random
C. A court-appointed outsider
D. The bank manager
E. No one; HUFs cannot open bank accounts
Answer: A. The Karta operates an HUF account.
7 A key document required to open a partnership firm's account is the:
A. Partnership Deed / Partnership Letter signed by all partners
B. Memorandum of Association only
C. Trust Deed
D. Society bye-laws
E. No documentation is required
Answer: A. A Partnership Deed/Letter is central to opening a firm's account.
8 Partners in a partnership firm are, for firm liabilities:
A. Jointly and severally liable
B. Never liable individually
C. Liable only if named as Karta
D. Immune from all firm debts
E. Liable only for their own personal debts
Answer: A. Partners are jointly and severally liable for firm debts.
9 Opening a company's current account requires, among other documents:
A. A certified Board Resolution and Certificate of Incorporation
B. A Trust Deed
C. A Partnership Letter
D. A ration card of the CEO
E. No documentation at all
Answer: A. A Board Resolution and Certificate of Incorporation are required for a company account.
10 To open a Trust's bank account, the bank requires:
A. A certified copy of the Trust Deed and list of trustees
B. A Partnership Deed
C. Only the trustee's personal PAN, nothing else
D. No documentation
E. A society bye-law
Answer: A. A Trust Deed and list of trustees are required.
11 A registered Society opening a bank account must submit:
A. Certified bye-laws and Certificate of Registration
B. A Board Resolution of a company
C. A minor's guardianship certificate
D. Nothing beyond a verbal request
E. A Partnership Deed
Answer: A. Bye-laws and a Registration Certificate are required for a society.
12 For a sole proprietorship's account, banks typically require any two of GST registration, licence, IT returns, or utility bills in the name of:
A. The proprietor / the proprietary concern
B. Any unrelated third party
C. The bank itself
D. A trust unrelated to the business
E. No documents are ever required
Answer: A. Business-proof documents in the proprietor's/concern's name are required.
💼 Current Account Norms
13 Before opening a current account for a borrower already enjoying credit facilities elsewhere, a bank must:
A. Check with other lenders/verify existing credit exposure to prevent diversion of funds
B. Open the account immediately with no checks
C. Refuse the account permanently
D. Report the customer to the police automatically
E. Take no action of any kind
Answer: A. Verifying existing exposure prevents diversion of cash-credit funds.
14 The RBI's current-account discipline for existing borrowers primarily aims to prevent:
A. Diversion of cash-credit/working-capital funds away from the lending bank's monitoring
B. Customers from ever opening any account
C. Banks from earning any fee income
D. RBI from collecting any data
E. NEFT transactions of any kind
Answer: A. The rule prevents diversion of monitored cash-credit funds.
15 For borrowers with exposure at or above prescribed thresholds, current accounts can generally be opened only by:
A. Banks that are part of the consortium/MBA, or with NOC from lending banks
B. Any bank, with no restriction whatsoever
C. Only foreign banks
D. Only cooperative banks
E. No bank; such accounts are banned entirely
Answer: A. Consortium/MBA membership or an NOC is required above the threshold.
16 Non-observance of current account opening discipline for existing borrowers is treated by regulators as:
A. A significant deficiency, impacting the account's regulatory classification
B. A trivial matter with no consequence
C. Grounds for automatic bank licence cancellation only
D. Irrelevant to asset classification
E. A matter only for the account holder, never the bank
Answer: A. Non-observance is flagged as a significant deficiency.
📸 Photographs
17 Recent photographs are mandatory for:
A. All account holders, including joint holders, guardians and trustees
B. Only the primary account holder, never joint holders
C. No one; photographs were abolished entirely
D. Only NRI customers
E. Only corporate customers
Answer: A. Photographs are mandatory for all account holders, guardians and trustees.
🔟 Legal Entity Identifier (LEI)
18 LEI stands for:
A. Legal Entity Identifier
B. Local Enterprise Index
C. Licensed Entity Information
D. Loan Eligibility Indicator
E. Liquid Exposure Instrument
Answer: A. LEI = Legal Entity Identifier.
19 An LEI code consists of:
A. 20 alpha-numeric characters
B. 10 numeric digits only
C. 4 alphabets only
D. 16 digits, same as a card number
E. A single QR code with no characters
Answer: A. LEI is a 20-character alpha-numeric code.
20 In India, RBI mandates LEI for:
A. Large corporate borrowers above prescribed exposure thresholds and large-value payment/forex/derivative transactions
B. Every savings account holder, without exception
C. Minors only
D. No one; LEI is not used in India
E. Illiterate customers only
Answer: A. LEI is mandated for large corporate borrowers and large-value transactions.
21 The LEI standard is based on:
A. ISO 17442
B. ISO 9001
C. ISO 27001
D. ISO 14001
E. No international standard
Answer: A. LEI follows the ISO 17442 standard.
22 A key regulatory benefit of LEI is that it:
A. Lets regulators aggregate a single corporate group's exposure across multiple banks
B. Eliminates the need for any KYC
C. Replaces PAN for individuals
D. Has no regulatory benefit
E. Applies only to retail savings accounts
Answer: A. LEI aggregates exposure across the banking system for a group.
🧩 Mixed / Comprehensive
23 A bank official opening an account for a senior citizen should, per RBI guidance:
A. Provide enhanced service at counters and consider doorstep banking
B. Deny the account outright
C. Impose additional unrelated documentation with no basis
D. Require a court order for every transaction
E. Refuse cheque collection
Answer: A. Senior citizens get enhanced counter service and doorstep banking options.
24 Which of the following customer types has NO independent legal personality distinct from its members/partners, unlike a company?
A. A partnership firm
B. A registered company
C. A registered trust with a separate legal identity
D. None; all have separate legal personality
E. Only HUFs have separate legal personality
Answer: A. A partnership firm has no separate legal personality from its partners.
25 Which document is most specific to HUF account opening, not required for a partnership?
A. A declaration signed by the Karta and coparceners
B. A Board Resolution
C. A Certificate of Registration
D. A society's bye-laws
E. A Trust Deed
Answer: A. The Karta/coparcener declaration is HUF-specific.
26 Which of the following would most plausibly trigger the current-account cross-verification requirement?
A. A borrower with an existing cash-credit facility at Bank X wants to open a current account at Bank Y
B. A first-time customer with no borrowings anywhere opens a savings account
C. A minor opens a recurring deposit
D. A pensioner opens a fixed deposit
E. None of the above trigger any verification
Answer: A. Existing credit exposure elsewhere triggers cross-verification for current accounts.
27 Which entity type requires MOA and AOA at account opening?
A. A registered company
B. A partnership firm
C. An HUF
D. An individual
E. A minor's account
Answer: A. MOA/AOA are company-specific constitutive documents.
28 Which of the following best describes why banks require a resolution to open a trust's account, rather than relying solely on individual trustee identity?
A. The resolution confirms the trust body's collective authorisation and specifies who may operate the account on the trust's behalf
B. Resolutions have no purpose in trust accounts
C. A single trustee's ID is always sufficient and no resolution is ever needed
D. Trusts cannot legally open bank accounts
E. Resolutions are required only for partnerships
Answer: A. The resolution establishes collective trustee authorisation for account operation.
29 A bank official notices a prospective current-account customer already has a large cash-credit account with another bank, above the prescribed threshold, and that bank is not part of any consortium. The correct action is to:
A. Obtain a specific No-Objection Certificate (NOC) from the lending bank before opening the account
B. Open the account immediately, no checks needed
C. Refuse to open any account permanently, with no recourse
D. Report the customer to the police
E. Ignore the exposure entirely since it's a current account, not a loan account
Answer: A. An NOC from the lending bank is required above the exposure threshold.
30 Which of the following best explains why LEI became important globally after the 2008 Global Financial Crisis?
A. Fragmented, inconsistent counterparty identification across institutions obscured the true scale of systemic risk
B. LEI has no connection to the Global Financial Crisis
C. LEI was created decades before any financial crisis and is unrelated
D. LEI replaced all KYC documentation globally
E. LEI is used only for retail account opening
Answer: A. Poor counterparty identification masked systemic risk pre-crisis, motivating LEI adoption.
31 A club wishing to open a bank account must typically provide, in addition to KYC of office-bearers:
A. Bye-laws and a resolution of the managing committee
B. A Board Resolution meant for companies
C. A minor's guardianship order
D. Nothing; clubs cannot open accounts
E. A Partnership Deed
Answer: A. Clubs/associations need bye-laws and a managing committee resolution.
32 Which of the following statements about minors self-operating an account is TRUE?
A. Some banks permit minors above a threshold age (e.g. 10 years) to self-operate a simplified account, per internal policy
B. No bank in India permits any minor to self-operate an account under any circumstances
C. All minors, regardless of age, must always have a guardian operate the account
D. Minors can self-operate only current accounts, never savings accounts
E. Minors can never have any bank account
Answer: A. Banks may allow self-operation above a threshold age under their own policy.
33 Which document would NOT typically be required for a sole proprietorship's account opening?
A. A Memorandum of Association
B. GST registration certificate
C. IT returns in the proprietor's name
D. A municipal licence
E. A utility bill in the business name
Answer: A. MOA is a company document, not required for sole proprietorships.
34 Which of the following is the most accurate statement about KYC applicability to non-individual account types?
A. KYC of the entity's authorised signatories/beneficial owners is required in addition to entity-level constitutive documents
B. Non-individual entities are exempt from all KYC
C. Only the entity's registration certificate is needed, with no individual KYC
D. KYC applies only to individual accounts, never to entities
E. Beneficial ownership identification is irrelevant for entity accounts
Answer: A. Both entity documents and individual KYC of signatories/beneficial owners are required.
35 Which of the following best explains why the "Either or Survivor" mandate is popular among elderly joint account holders?
A. It lets either holder operate independently and ensures continuity for the survivor without immediate legal formalities on the other's death
B. It requires both signatures for every transaction, slowing things down
C. It has no advantage over any other mandate
D. It automatically closes the account on either holder's death
E. It applies only to corporate accounts
Answer: A. Either-or-Survivor gives operational ease and continuity for elderly joint holders.
36 Which of the following would be the most appropriate KYC document category for verifying a company's registered address?
A. Certificate of Incorporation showing the registered office
B. The CEO's personal passport only
C. A minor's school ID
D. A thumb impression form
E. No document is needed for address proof
Answer: A. The Certificate of Incorporation typically evidences the registered office address.
37 Which of the following statements about LEI renewal is generally TRUE?
A. LEI codes require periodic renewal/re-validation to remain active
B. LEI, once issued, never requires any renewal
C. LEI is issued only once per country, not per entity
D. LEI has no expiry or renewal concept at all
E. LEI is renewed only if the entity changes its name
Answer: A. LEI codes need periodic renewal to stay active/valid.
38 Which of the following best captures the overall theme connecting this topic to KYC/AML (covered elsewhere in JAIIB PPB)?
A. Correct account-opening documentation for each customer type is the first practical layer of a bank's KYC/AML control framework
B. Account opening has no connection to KYC/AML at all
C. KYC applies only after an account has been open for five years
D. Account-opening documentation is unrelated to money laundering risk
E. AML obligations apply only to foreign banks
Answer: A. Correct account-opening documentation underpins the KYC/AML framework.
39 Which of the following is TRUE regarding a partnership firm's account where one partner retires?
A. The bank should obtain a fresh mandate/letter reflecting the change in constitution
B. No action is needed; the account continues unchanged automatically forever
C. The account must be closed permanently with no option to continue
D. Only RBI can authorise such a change
E. The retiring partner remains authorised to operate indefinitely
Answer: A. A change in partnership constitution requires a fresh mandate/documentation.
40 Which of the following best describes the bank's obligation when opening an account for an illiterate customer regarding future transactions?
A. Explain the terms and conduct of the account in a language the customer understands, ideally at every transaction
B. No explanation is ever required
C. The customer must learn to read before any transaction is processed
D. Illiterate customers are barred from cash withdrawals
E. Illiterate customers can only operate via a chequebook
Answer: A. Banks must explain terms clearly to illiterate customers, ideally at each transaction.
41 Which of the following entities would use a "Certificate of Registration" as a primary constitutive document at account opening?
A. A registered society
B. An individual resident
C. A minor
D. An HUF
E. A joint account of two individuals
Answer: A. A society's Certificate of Registration is a key constitutive document.
42 Which best explains why banks insist on "Jointly" as a mandate for certain high-value accounts, despite the inconvenience?
A. It ensures no single holder can unilaterally operate the account, adding a control against misuse
B. It has no risk-control purpose
C. It is used only for minors' accounts
D. It speeds up transactions compared to Either-or-Survivor
E. It is mandatory for every single account type without exception
Answer: A. "Jointly" mandates add a control requiring multiple signatories.
43 Which statement about beneficial ownership in a trust account is most accurate?
A. Banks must identify beneficial owners/beneficiaries of the trust as part of enhanced due diligence
B. Trust accounts are exempt from beneficial-ownership identification
C. Only the trustee's identity matters; beneficiaries are irrelevant
D. Beneficial ownership applies only to companies, never trusts
E. Trusts cannot have beneficiaries under Indian law
Answer: A. Beneficial owner identification applies to trust accounts too.
44 A foreign national visiting India seeking to open an account would, in addition to standard KYC, most likely need to submit:
A. Passport with valid visa details
B. An Indian ration card
C. A domicile certificate
D. No identification at all
E. Only a driving licence
Answer: A. Passport with visa is the standard document for foreign nationals.
45 Which of the following would most likely require re-KYC or updated documentation mid-tenure of an account?
A. A change in the constitution of a partnership firm or the trustees of a trust
B. No event ever requires re-KYC
C. Only a change of the account's IFSC code
D. A change in the bank's logo
E. A public holiday
Answer: A. Constitutional changes in an entity trigger re-documentation/KYC updates.
46 Which of the following is the most accurate reason banks discourage issuing cheque books to illiterate customers?
A. To reduce the risk of the customer being misled or defrauded through an instrument they cannot independently verify
B. Illiterate customers are legally barred from ever receiving a cheque book
C. It has no risk rationale at all
D. Cheque books are more expensive to issue to illiterate customers
E. RBI bans cheque books for all savings accounts
Answer: A. Passbooks reduce fraud risk for customers who cannot verify written instruments.
47 Which of the following best describes an "Officially Valid Document" (OVD) in the context of individual account opening?
A. A government-prescribed document (e.g. Aadhaar, passport, voter ID) accepted for identity/address verification
B. Any handwritten note from the customer
C. A document issued only by the bank itself
D. A document with no legal recognition
E. A document required only for corporate accounts
Answer: A. OVDs are the government-prescribed KYC identity/address documents.
48 Which of the following would be the LEAST appropriate identity document for opening a proprietorship account, standing alone?
A. A personal greeting card from a friend
B. GST registration certificate
C. A municipal trade licence
D. IT returns in the proprietor's name
E. A utility bill in the business name
Answer: A. A greeting card has no evidentiary/KYC value.
49 Which best summarises why banks classify account-opening customer types into distinct categories rather than a single uniform process?
A. Each customer type carries a different legal capacity, documentation need, and risk profile, requiring tailored due diligence
B. It has no purpose and exists only to add paperwork
C. All customer types are legally identical, so categorisation is meaningless
D. Categorisation exists solely to slow down account opening
E. It is required only for foreign banks
Answer: A. Different legal capacities and risk profiles necessitate category-specific due diligence.
50 Overall, which statement best summarises the account-opening framework covered in this guide?
A. Each customer category — individual, minor, illiterate, HUF, partnership, company, trust, society, proprietorship — has distinct constitutive/KYC documentation requirements, with additional discipline for current accounts and mandatory LEI for large corporate exposures
B. All customers follow one identical process with no distinctions
C. Only companies can open bank accounts in India
D. LEI applies to every single retail account
E. Current account norms are identical to savings account norms
Answer: A. This correctly captures the customer-type-specific account-opening framework.
Disclaimer: This article is prepared for educational and exam-preparation purposes only, summarising account-opening norms as of September 2026. Candidates should cross-check the latest official IIBF syllabus and RBI Master Directions before the exam.