Ask Mint | You may have to give a security to obtain a bank guarantee

Ask Mint | You may have to give a security to obtain a bank guarantee

My son opened a savings account in State Bank of India in 2003. He left for Canada on a permanent resident visa in 2008. His bank account is still in operation and he has given a power of attorney (PoA) to me to operate it. Can the account continue or should it be closed?

—Ashok Mehta

Whenever an individual’s status becomes “non-resident" from “resident", then he must re-designate his resident account as an non-resident ordinary (NRO) account. Along with the NRO account, you can also open a non-resident external (NRE) account. And an individual can either use a letter of authority or a PoA. The letter of authority must be duly completed with the signature of the person who is authorized to operate the account. The same must be attested and handed over at the branch concerned. Since you are operating the account on behalf of your son with the help of PoA, it is completely permissible and you need not close the account. Please note that PoA holders are not allowed to credit proceeds of foreign currency notes, bank notes and travellers cheques to the NRE accounts.

I am going to the US for higher studies and the institute I am going to needs a bank guarantee of 12 lakh. I do not know what exactly this guarantee is. What kind of bank guarantee do usually institutes require and which bank can give it to me?

—Yogesh Rathi

Bank guarantee primarily means a guarantee from the lending institution ensuring that the liabilities of the debtor will be met. So if you are not able to pay the dues of the institution where you are going for studies, then the bank guaranteeing you will have to clear all the dues. Therefore, to obtain the same, you should speak to the banks and find out on what condition they would give the bank guarantee of 12 lakh. They may require some security against that. You can try public sector banks as well as private sector banks.

I took a loan from a private bank seven years ago to buy a car. I repaid the entire amount in February this year. I did default on some of the instalments but have paid late fee and settled the dues. However, the bank is not issuing me any letter stating that I have repaid the amount. What should I do?

—Keshav Gupta

If you have completely repaid your car loan along with the interest amount and late payment fee, then the bank must give you the letter stating you have repaid the entire loan amount. If it does not happen, you should approach the banking ombudsman. You will find the details of the ombudsman on the Reserve Bank of India website. The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks.

Satkam Divya is business head,, a NetAmbit venture.

Queries and views at