More often than not, we see people abusing their partners’, parents’, or business’s bank accounts because there are no limitations on their access. A bank mandate specifies the extent to which an account holder would like a specific person to control their finances.

Bank mandate forms allow customers to share access to their financial services with others but stay in charge. This protects their interests and prevents common access mismanagement, such as partner/elder financial abuse, funds siphoning, etc.

Let’s examine how bank mandate forms work, their benefits, and a free template to get you started.

What is a Bank Mandate Form?

A bank mandate form is a legal document that allows bank account holders, including corporate or personal accounts, to authorize specific people to manage their accounts. The form also allows the account holder to control the level of access and permissions the signatory has to their account.

The person given access to the account is typically called a signatory or mandate holder. The signatory has different permission levels based on the account owner’s specifications. Some of these permissions include:

• Viewing transaction history and balance
• Bill payments and money transfers
• Setting up direct debits and standing orders
• Approving new financial products or services such as subscription services, insurance, and more

What Happens When A Customer Authorizes A Bank Mandate Form?

The legal implication of bank mandate forms is that the customer has given the signatory financial control and responsibility. This means that the signatory has the legal authority to carry out all the actions the account owner has authorized. 

So, before you accept bank mandate submissions, ensure the customer fully understands the consequences of signing over authority to their bank account and the steps to retract if necessary. Also, encourage the customer to give access and control to trustworthy people and ensure the signatory level of access matches their credibility.

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Components of a Bank Mandate Form

Bank mandate forms differ slightly from bank to bank, but they all have the same essential components. The following are the most important parts of a bank mandate form:

• Personal  Details: This collects the account holder’s name, address, and contact information.
• Account Details: This allows the account holder to specify the account number(s) they want to give their signatory access to and may also include the account type (savings, checking, etc.).
• Signatory Information: This identifies the authorized person(s), including their full names, contact details, and sometimes signatures for verification purposes.
• Authorization Clauses: This is the most important part of the form, it outlines the specific permissions the account holder grants the signatory. Authorization clauses allow customers to specify the kind of transaction the signatory can make, such as bill payment, withdrawals, or money transfers, it could also include the transaction limit the signatory can process. 

The authorization clauses also help to indicate the type of mandate the account owner is giving the signatory, such as single vs joint signatory.

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The Importance of Accuracy and Completeness of Bank Mandate Forms

You can’t avoid mistakes in bank mandate forms. Errors in the form can result in account holders misinterpreting the permission they give their signatory, which can have serious consequences for both the client and your bank. For example, if the questions on your bank mandate form are unclear, the account holder could grant the signatory a different type of access than they want.

So ensure you double-check all details of your bank mandate form before sharing it with customers, and encourage them to ask questions about the permission they give.

Types of Bank Mandates

There are different types of bank mandates for various use cases, but these are the three main types:

• Single Mandate: This is the most common type of bank mandate, it allows bank customers to grant access to a signatory to manage their account. Depending on the signatory access level, this mandate allows them to view account details, make transactions, and access financial products linked to the account.
• Joint Mandate: This mandate applies to shared accounts, typically between spouses or business partners. There are two main variations of this mandate:
  • Joint and Several Mandate: Each account holder can independently perform transactions without the other’s signature. This is common among spouses or business partners with equal access.
  • Joint and Previous Mandate: Both account holders must sign for any transaction, offering greater control and security. Spouses or business partners often use this for children’s accounts, life savings, or shared expenses such as business expansion.
• Corporate Mandate:  This mandate is designed for businesses and organizations. It specifies authorized personnel (directors, managers) who can manage the account. Different access levels (view only, transaction approval) can be assigned to different signatories for enhanced security and control.

Purpose and Benefits of Bank Mandates

There are several reasons why people and organizations set up bank mandates, but these are the most common:

• Account Control: bank mandates allow account owners to define who can access and manage the bank account, preventing unauthorized transactions.
• Security: Mandates only allow the people with authorized access to perform specific actions with the account
• Efficiency: Joint mandates streamline financial management for couples or businesses, allowing them to make financial decisions together.

Benefits:

• Seamless Transactions: Mandates allow the signatory to access financial services easily and transact freely
• Efficient Management: They enable efficient financial control for businesses and joint accounts by assigning specific roles and access levels.
• Peace of Mind: Mandates provide peace of mind by reducing the risk of unauthorized access and fraudulent activities.

Addressing Concerns

There are some misconceptions surrounding bank mandates, and these misconceptions are what prevent customers from enrolling for bank mandates. Here are some of the most common myths about bank mandates:

• Complexity: The process is straightforward, and banks typically provide clear instructions and support.
• Reduced Access: Account holders still have full access to their account information and can manage their signatory permissions.

How to Complete a Bank Mandate Form

As a customer, here’s a step-by-step guide to help you accurately fill a bank mandate form:

1. Request the Form: Get a bank mandate form from your bank branch or download it from their website.
2. Personal Details: Fill in your personal information accurately, including name, address, and contact details.
3. Account Information: Specify the account number and type (checking, savings).
4. Mandate Type: Select the appropriate mandate type (single, joint, or corporate).
5. Signatory Details: Signatory details (name, designation) are for joint or corporate mandates.
6. Signing Authority: Indicate the level of access for each signatory (view only, transaction approval).
7. Review and Submit: Carefully review the form for accuracy and completeness before signing and submitting it to your bank.

Tips for Accuracy:

Giving a mandate is a very serious permission, so you want to ensure you give the right level of access to the right person. Here are some tips to ensure your form’s accuracy:

• Double-check all information, especially account numbers and signatory details.
• Indicate the type of mandate and access levels for each signatory.
• If unsure about any section, consult your bank for clarification.

Legal Considerations and Safeguards

Signing a bank mandate form grants another person (the authorized party) specific permissions to access and manage your bank account.  The following are some safeguards to enforce to protect both the account holder and the signatory:

• Account Holder’s Obligations: As the account owner, you are legally responsible for all actions the authorized party takes under the mandate. So choose a trustworthy person and clearly define the scope of their access (e.g., deposits only, withdrawals up to a certain amount).
• Authorized Party’s Rights: The mandate outlines the specific rights of the authorized party. These can include making payments, transferring funds, or collecting checks. It’s essential to ensure these rights align with the intended purpose of the mandate and are documented.
• Seeking Professional Advice: For complex financial situations or when granting broad access, consult first with a legal professional. They can help ensure the mandate accurately reflects your intentions and protects your interests.

Conclusion

Bank mandate forms allow account owners to select people they trust to manage their finances seamlessly. This enables customers to share financial responsibility amongst their trusted ones and provides a guideline to protect their interests. Get started with this bank mandate form template to enable customers to plan their finances more efficiently.