Authorized Signatory Letter for the Bank

Authorized Signatory Letter for the Bank

Letters Kate

A signatory is a person or party who signs the agreement with the company and becomes an active member of that company. In some cases, the signatory is given access to the company’s bank account when he has invested a significant amount in the company.

However, the bank cannot authorize anyone other than the account holder to carry out transactions from an account. Banks have different policies for business accounts. For instance, they allow the account holder to authorize someone to carry out transactions from their account.

What is an authorized signatory letter to the bank?

It is a formal letter written to the concerned person in the bank to let him know that you are allowing someone to make monetary transactions from your account that you initially monitored and controlled by you.

In this letter, you inform the bank that you have added a person in your company who you can allow to be the signatory. There is no need to provide the reason for adding the signatory. However, make a clear statement about the authorization you are issuing.

Importance of this permission letter:

Banks have many restrictions on a person’s account because it is the bank’s responsibility to ensure that the person’s funds are safe and secure by not allowing anyone else to make money from that account.

When a bank receives the authorization letter from one of the account holders, it allows that person to carry out the transaction. Without the permission letter, the signatory can never take any action on the account.

The authorization letter also records what authority you have given to the signatory. For instance, if the signatory can withdraw money from the account up to a specific limit, mention that limit so that when the signatory tries to exceed that limit, the bank can stop him from doing this.

How to write the authorized signatory letter to the bank:

When you are writing to the bank, you should make sure you read the following points before drafting your letter:

  • Be clear:

You should know that you are giving your consent to someone to withdraw money from your account on your behalf, which is very critical. Therefore, make sure you use a clear statement to designate the authority to someone.

  • Be concise:

The bank is not interested in knowing why you are writing and what has compelled you to make this decision. Therefore, you don’t need to provide details that are not relevant. So, ensure your letter conveys your consent and other pertinent information without going off track and confusing the bank.

  • Use professional language:

Your consent letter addresses an institute, so your tone should be appropriate and professional. Learn to use professional language and draft a formal letter.

Sample authorized signatory letter to the bank:

Subject: Authorisation of signatory addition

Dear Sir/Madam,

I want to state that I am an account holder in your bank with (mention the account number) of type (mention the type of account, whether saving or current) in the branch (mention the branch number and its location).

As per the company’s decision, Mr. ABC has been added as an authorized person or signatory. Mr. ABC is a new addition to our company, and I would like to authorize him to carry out transactions regarding money as per the board’s decision.

I am enclosing all the necessary documents along with this letter and a copy of the board’s decision regarding authorization. I would like to request that you add Mr. ABC as a signatory. I will be highly thankful to you for this act of kindness.

If you have any queries, please get in touch with me at (mention your phone number).

Regards,

Name of the sender
Designation of the sender in the company
Name of the company

Signatures of the sender

_________________

Authorized Signatory Letter for the Bank

File: Word (.docx) and iPad
Size 28 KB

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