Financial experts say banks are wary of liability arising out of ‘lack of commitment’ – but how does marriage solve this issue, ask couples.

Can unmarried heterosexual and same-sex couples open a joint bank account in India
Money Personal finance Friday, January 25, 2019 - 12:28

A few years ago, when Moulee and his partner decided to open a joint bank account together, it should have been a simple process. The couple had been living together for two years and decided that maintaining an account for monthly expenses, including rent and other costs, would be easier with a shared pool of money that they could both access.

“It was about practicality and ease of access,” Moulee told TNM. But what should have been easy turned into a challenging and anxiety-filled back-and-forth with the bank. Though RBI guidelines do not explicitly state that two individuals need to be married or blood relatives in order to open an account together, there are live-in unmarried heterosexual and same-sex couples in south India who have faced resistance from banks.

“[The bank] said, as per policies, you can’t open,” said Moulee, who had detailed his experience in a Twitter thread.

Moulee, a diversity and inclusion consultant, and his partner, who works in advertising, had contemplated the idea of a joint account for a month before approaching the bank. They were spurred to move forward with the process because some MNCs in India offer benefits to same-sex  couples but require proof of cohabitation, such as a joint account.

The couple, who did not wish to tell the bank they were in a relationship, had even prepared for potential reticence from the bank, taking printouts of the RBI guidelines that showed the law was on their side. Still, the two were shunted to multiple bank employees and managers who initially refused to heed their request. Two bank employees even tried to dissuade them from opening the account, asking what would happen if they argued over Rs 50, or why two men in their 30s weren’t married already. This happened in an open space and created an embarrassing situation for them. “They need to think beyond traditional relationships,” Moulee said. “This kind of cultural policing or mindset needs to change.”

They were finally granted the account by a branch manager, but Moulee knows other queer couples who have been flatly refused and did not argue with the bank. The process also caused them stress and anxiety.

“It was mental trauma for us,” he said, “Even a simple bank account.. people started questioning the relationship. They don’t see us as a unit.”

Liability or morality?

When two people open a joint bank account, there should be an agreement that both individuals will bear the responsibility for each other’s actions. The basic understanding is that “these two people are mature enough to understand what their liabilities are,” said Vinitha Jain, a finance expert and co-founder of Pay it Forward, a group that teaches basic finance to women and millenials.  

Banks are weary of unmarried couples in case the relationship fails and one half of the couple does not assume that liability. “You need to keep in mind the possibility of something going wrong,” said Preetha Wali, who also runs Pay it Forward with Vinitha.

While joint accounts make as much sense for live-in unmarried couples, as they do for married ones, there are still legal complications that can occur if the couple splits, one member of the couple dies or if the two have a child, experts say.

In 2015, the Supreme Court ruled that an unmarried couple living together as husband and wife would be presumed to be legally married, and the woman would be eligible to property after the death of the partner. Still, banks remain wary. “They feel there is a lack of commitment. It may not be true, but that is what they feel,” said Shilpi Johri, financial planner and author of ‘Money, Life & You.’

However, the same concerns apply for married, heterosexual couples too – so why aren’t banks wary in that case, asked Amba, a lawyer who lives in Chennai.

Amba tried to open an account with her partner a few years ago to manage their household expenses. They filled an online application, and Amba told the bank that they weren’t married, but were living together. The bank asked them to provide an affidavit explaining their relationship. They also asked them to submit an undertaking, with no formal format, saying that if anything untoward were to happen, they would not hold the bank liable.

The bank told Amba that they were taking these steps because in some couples, the man may take the money in the account and flee. “I was like, how does being married solve this situation?” she said. At this point, Amba refused to go ahead any further with the process.

Banks’ response

TNM reached out to multiple banks asking if they had a policy on joint bank accounts for unmarried couples.

"There is no restriction of opening joint account by unrelated parties,” said Sanjay Silas, president and head branch banking of Axis Bank.

Other banks did not respond to a request for comment, though ICICI bank states on its website that “you can open a joint account with your spouse or blood relative by providing us an acceptance letter from your company stating that they have no objection for the same.”

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