Authorization Letter to Debit a Bank Account for Payments

Sometimes an account-holder of a bank may need to give a specific or general authorization to the bank through a written communication authorizing the bank to carry out certain transactions without having to wait for approval from the account-holder.

It is important that you clearly mention the following things in the authorization letter:—

(1) The nature of payment for which the account will be debited, (2) The amount up to which the authorization is being given, (3) The periodicity of payment when the amount will be debited i.e. monthly, yearly, etc.

The authorization letter must be signed by the account-holder himself or by the authorized signatories, if it is a corporate account.

Here are a couple of formats of authorization letters to banks to debit the accounts.

TEMPLATE #1

(Letter from an individual account-holder)

Date: ................

To

The Branch Manager

(Name of the Bank)

(Name of the Branch)

(Address)

Subj.: Authorization for debit of the account

Dear Sir/Madam,

I am hereby authorizing and directing your bank to debit my account bearing number ................. for an amount up to ................ for the payment of (here mention nature of payment) as and when necessary (or write - monthly/ quarterly/ yearly when it is due).

This authorization will be valid until withdrawn specifically in writing by me.

I believe this authorization will be sufficient authority to carry out the above-mentioned transaction. If there is any more information or documents required from my side in this regard, please let me know.

I understand the terms and conditions of the bank for this purpose and I accept the same.

Thanking you,

Yours faithfully,

    (Signature)

(Name of the Account-holder)

Mob. ...................

TEMPLATE #2

(Letter from a corporate account-holder)

Ref: ..................

Date: ................

To

The Branch Manager

(Name of the Bank)

(Name of the Branch)

(Address)

Subj.: Authorization to debit the account for payments

Dear Sir/Madam,

We, the undersigned, are the authorized signatories of the Current Account bearing number .....................

We hereby authorize your bank to debit the above-mentioned account for (write the nature of payment viz. cheque payment, bills drawn under letters of credit, etc.) as and when due for payment for the actual amount without any limitation. We further authorize you to debit the account for any ancillary charges and interest along with it as well, if applicable.

This authorization shall remain in force until withdrawn by us in writing to you.

We acknowledge that there are rules and regulations of the bank governing the said services. We fully understand and accept all such rules and regulations. We also agree to abide by any other terms and conditions as may be applicable in future in this regard.

Kindly acknowledge the receipt.

Thanking you,

Yours sincerely,

    (Signature)

(Name of the Authorized Signatory)

(Designation)