Changing Your Bank Signatory? Here are the Y Documents Required by Most Banks in India

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India is a middle-income economy. People in India find their money and assets dear to their lives. Thus, they always want to safeguard and grow their money in a secure way. That is why banks are important for a country like India. They provide credit, loans, and investments to facilitate infrastructure and businesses. There are a total of 122 bank companies in India that compromise private regional, public, and foreign banks. Out of these, 22 banks from the private sector have assets that are worth around $800 billion, and 12 banks from the public sector are worth a staggering $1.5 trillion.

In this blog, we will learn about authorised signatory meaning and the process through which one can change signature in their respective banks along with the documents required by most banks in India.

Who is a Bank Signatory?

A Bank Signatory or an authorized signatory is an individual authorized by a bank to sign important binding documents on their behalf. A dedicated bank signatory can serve a more specific or even a general purpose involving the organization. Irrespective of what they have expertise in, a bank signatory must always keep the interests of the organization in mind before making any decision. Maintaining the workflow of documents is one of the important jobs of an authorised signatory meaning they should try their best to ensure no delays in a decision on their behalf.

A Power of Attorney is a very common type of bank signatory. Its power is to provide power to another individual for the sake of making decisions for another human being in his/her best interests. A few other examples of bank signatories are trustees and CEOs. In the next section, we learn about the various types of bank signatories.

Below is a representation of the revenue generated by all banks in India in FY23:
 

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However, India is populated by a massive 1.4 billion people. Considering this number, the quantity of banks in India is still less. Banks pass important payments related to various causes such as investments, purchases, loans, etc. These payments and binding agreements are held under the supervision of a Bank Signatory. A bank signatory provides an authorised signature. This signature is accountable for various consequences. Many times when the consequences are not favorable to the account holder, he/she may change the bank signatory. 

Types of Bank Signatories

There are many roles in which a bank signatory can operate. Here are a few described below:

1. Company Directors

A Company director can be a CEO who is positioned to authorize matters within the organization. They are given the power to carry out contracts on the company’s behalf. The opening and maintaining of bank accounts depends upon them. Moreover, they are also responsible for other financial matters like issuing loans, managing stocks, and so on.

2. Bank Account Signatory

Here the signatory takes the decision on behalf of the account holder. A Bank Account signatory can be chosen by the account holder or the bank itself. All the issues related to accounts such as transactions and management are done under the supervision of a bank account signatory. An example would be appointing bank account signatories who are empowered with withdrawal and payroll deposits. 

3. Company Employee Signatory

Along with high profiles like directors, even normal employees can be assigned as signatories. Such signatories are granted the power of signing documents that include contracts and finances in the interest of the employer. This saves time and effort for the organization as all the agreements are bonded legally with no need for everyone’s signatures. It also reduces the chances of something going wrong as very few people are involved in it.

Why is having a Bank Signatory important?

With time, complexities in financial operations are growing. Especially, in the case of businesses, maintaining a smooth financial workflow is very important. To achieve this, appointing a bank signatory has become necessary. Here are a few reasons why bank signatories are important-

1. Convenient: Finance involves a lot of paperwork. Most of the time, these paper works get clogged in the workflow due to pending work or permissions. In such a situation, a number of competent and eligible employees can be provided with the authorized signature power rather than a single signatory. This can reduce the workload and avoid any administrative or financial delay.
2. Account Protection: Having a bank signatory also means having someone accountable and entrusted to protect your bank accounts at all times. Authorized signatories work their best for the interest of the company’s goals.
3. Trust: Bank signatories are highly qualified individuals that makes them trustworthy of any finance related decisions. This allows banks to strengthen their authority and increase their trust within customers.

Can a signature be changed?

A signature is an identification parameter for an individual. However due to various reasons, account holders need to change their signatures. “Can I change my signature ?”The answer is yes, a signature can be changed. An application is required to be filled in with all other related documents. Many times, banks may require you to write an email instead.

You can change signature by sending a signature change letter to bank. It is a formal letter conveyed to the branch manager of the bank. It is the most effective way of getting your signature changed. Below is an example of a signature change letter to bank.

AT Road, Amolapatty,

Nagaon

29 March, 2024

The Branch Manager

HDFC Bank

Haibargaon Branch,

Nagaon

Sub: Signature Change Request

Sir, 

I, Manish Das, holder of a current account in the Haibargaon Branch of the HDFC bank (account number must be mentioned), would humbly bring to your attention my inability to continue my current signature as it has gone invalid. I would thus request you to kindly update the new signature. I will remain grateful if done so at the earliest.

Signature (Old) ______

Signature (new) ______

Yours faithfully,

(Signature)

Manish Das

Phone No. __________

What are the documents required to change the signatory of a bank?

The process of changing a bank signatory is not as complex as it seems. One must contact the relationship manager who will be a guide throughout the process. The documents required to change the signatory may be different in different banks. However, some documents fall in the common set of many public and private banks. 
 

A sample of board resolution for authorized signatory

Below is an example of a board resolution for authorised signatory : 

“RESOLVED THAT a meeting takes place among the Board of Directors to address the Current Bank account number 1381XXXXXXX that is handled by the UCO Bank, Nagaon Branch, Assam under the account name “Manoj Electricals” and that its resolutions are all suppressed. UCO Bank hereby states that the authorization of honoring drawn cheques, that are either accepted or made on behalf of us as per the given limits:

1. Cheques under the amount of Rs. 50000 are to be signed by

• Mr. Ishaan Mishra, Authorized signatory 
• Mrs. Devika Patil, Authorized signatory 
• Mrs. Alankrita Das, Authorized signatory who are duly a vital part of the company doing justice to the power handed to them.

     2. Cheques presented without upper or lower limits will be signed by Mr. Samudra Banarjee, Director and Mr. Abinash Das, Managing Director.

RESOLVED FURTHER THAT the resolutions mentioned above must be conveyed to the concerned banker and stay in action until the given is edited or rejected by the Board of Directors as a result of a different resolution provided that it is forwarded by the Chairman or any director of the organization in writing”

Certified and Genuine copy

For Manoj Electricals

Samudra Banarjee                              Abinash Das

Director                                               Managing Director

Bottomline

Bank signatories are one of its most significant components. One must always go for a suitable bank signatory. With the power vested in their bank signatories must utilize it to smoothen the financial workflow. Another issue arises when one wants to change signature mostly because of their older signature getting invalid. This can be solved by simply sending a signature change letter to bank. Most of all, bank signatories may also required to be changed due to various reasons. In this article, we have explored how to change your bank signatory in 8 steps along with samples of the board resolution for authorised signatory. Thus, the importance of bank signatories must be understood and suitable changes must be made if required for the benefit of the account holders and the company.

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