Meaning
Financial institutions require a record to authenticate the identities of individuals authorized to transact on a corporate account. The signature card represents the master record of authorized signatories and contains the legal name, contact details, and handwritten or electronic signature of each authorized representative. Banks compare the signature on outgoing cheques or paper instructions against this document to prevent unauthorized withdrawals.
It applies to all transactions initiated on the account until a new mandate is officially filed and processed.
Financial Security
Corporate bank accounts often hold substantial working capital, making them primary targets for fraud. The bank uses the signature card as a key verification tool to confirm that instructions received by mail or fax are genuine. This manual or automated check must succeed before funds are released, protecting the company from unauthorized transactions.
Administrative Audit
Periodic reviews of bank mandates are necessary to ensure that former employees do not retain access to corporate funds. Auditors check the active signature card against current employment rosters to identify any outdated access permissions. Updating these documents requires board resolutions and formal submissions to the bank, which can take weeks to process.
Operational Mandate
Delays in updating bank mandates can freeze corporate payments during periods of management transition. Running a production site without access to the operating bank account causes immediate payment defaults to suppliers. This operational constraint highlights the necessity of keeping the document current.
