Change in Authorised Signatories and Closing a Bank Account

Why the List of Authorised Signatories Must Stay Current

The people a bank will accept instructions from are exactly the persons named in the company's Board Resolution and specimen signature card on file — nobody else, however senior, can operate the account until the bank's own records are updated. This list inevitably needs to change over time: a director who was an authorised signatory resigns or is removed, a new director or officer is appointed to operate the account, or the company simply decides to restructure who may sign on its behalf (for instance, moving from single-signatory to joint-signatory operation for larger amounts). Until the bank is formally informed and the change is recorded, a cheque signed by a removed signatory can be dishonoured, and a cheque signed by a newly appointed signatory whose specimen the bank does not yet hold can be refused just as easily — so this correspondence should never be delayed.

Formalities for a Change of Signatory

Exactly as with opening an account or seeking a facility, a change of signatory needs a fresh Board Resolution — naming the outgoing signatory (if any) whose authority is withdrawn, and naming the incoming signatory whose authority is granted, along with the manner of operating the account (singly or jointly). The letter to the bank encloses this certified Resolution together with the new signatory's specimen signature and photograph, and clearly requests the bank to update its records with effect from a stated date.

Specimen Letter — Change in Authorised Signatory

SAHYADRI ENGINEERING WORKS LIMITED

Registered Office: Shivaji Udyog Nagar, Kolhapur – 416008

CIN: U28900MH2012PLC145678

Date: 20th October

The Branch Manager

State Bank of India

Kolhapur Industrial Estate Branch

Kolhapur

Dear Sir/Madam,

Sub: Change in Authorised Signatory — Current Account No. 30456789012

We wish to inform you that Mr. Ravindra Patil, a Director of the Company and one of the persons hitherto authorised to operate the above account, resigned from the Board with effect from 10th October. Our Board of Directors, at its meeting held on 18th October, resolved to withdraw Mr. Patil's authority to operate the account and to authorise Ms. Sneha Rane, Director, to operate the account jointly with the Company Secretary in his place, with effect from that date.

We enclose a certified true copy of the Board Resolution dated 18th October, together with the specimen signature and photograph of Ms. Sneha Rane, and request you to kindly update your records accordingly and to confirm the same to us in writing.

Thanking you,

Yours faithfully,

For Sahyadri Engineering Works Limited

(Prasad Joshi)

Company Secretary

Encl: Certified Board Resolution; specimen signature and photograph

Closing a Bank Account

A company may need to close a bank account for several honest reasons — it is shifting its banking relationship to another bank, closing down a branch office the account was opened for, or simply consolidating several accounts into one. As always, this needs a Board Resolution authorising the closure and naming who will complete the formalities, and the letter to the bank must ask the bank to close the account only after settling every outstanding cheque already issued, so that no genuine payment is left dishonoured.

Specimen Letter — Closing a Bank Account

VIDARBHA TEXTILES LIMITED

Registered Office: Wardha Road, Nagpur – 440025

CIN: U17100MH2008PLC167890

Date: 15th January

The Manager

Central Bank of India

Sitabuldi Branch

Nagpur

Dear Sir/Madam,

Sub: Closure of Current Account No. 51223344556

Our Board of Directors, at its meeting held on 8th January, resolved to close our Current Account No. 51223344556 held with your branch, as the Company has consolidated its banking with another bank. We enclose a certified copy of the Board Resolution authorising this closure. …