MOP Full Form and Meaning
MOP stands for Mode of Operation, which in simple terms means a set of rules agreed upon by the account holder pertaining to the manner in which the account would be operated. MOP clarifies who has the authority to conduct financial activities such as funds withdrawals, transactions and other related activities. Account opening forms allow selecting who can operate the account, defining rules for access and management, from various options such as sole ownership to joint ownership options.
Types of MOP
- Single Operation: In single operation only one person has the authority to manage the account. Any consent is not required to carry out the desired financial activity.
- Joint operation: As the name states, multiple individuals can collaboratively operate and manage one account. Various types of joint operations are:
- Jointly: Consent of all the account holders is required to perform any activity in the account.
- Either or survivor: A single person can independently operate the account. In case of death of a partner, the survivor gains entire operational control.
- Anyone or survivor: Anyone amongst the multiple individuals can independently operate the account, no consent is required.
- Former or survivor: If the person who initially opened the account dies, only then the survivor can operate the account.
Importance of MOP
- Security: Only the authorized individuals get the access to operate the account and carry out any activity.
- Convenience: A flexibility to choose who gets the authority of a bank account is provided through MOP.
- Operational efficiency: The chances of errors are very minimal due to streamlined process of transactions, account management etc.
- Risk management: By defining clear roles and responsibilities, any operational risk pertaining to unauthorized access or consent vanishes.
In conclusion, Mode of operation in the banking term defines the protocol to manage an account, authorization and the customer control preferences. MOP is also beneficial in ensuring security from unauthorized access and any fraudulent activity. Before filing in ‘Mode of Operation’ under the account opening forms, make sure you are clear with all the terms on the document.
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