Accounts with survivor/nominee clause :
In case there exists a valid nomination and the deposit account is opened with the survivorship clause (“either or survivor” or “anyone or survivor” or “former or survivor” or “latter or survivor”), bank can make payment of the balance in the deposit account to the survivor(s)/nominee of a deceased deposit account holder which is considered as a valid discharge of the bank’s liability provided:-
(a) The bank has exercised due care and caution in establishing the identity of the survivor(s)/ nominee and fact of death of the account holder through appropriate documentary evidence; there is no order from the competent court restraining the bank from making the payment from the account of the deceased; and (b) Survivor(s)/nominee has been advised in clear terms that he would be receiving the payment from the bank as a trustee of the legal heirs of the deceased depositor.
Banks may desist from insisting production of succession certificate, letter of administration or probate, etc., or obtain any bond of indemnity or surety from the survivor(s)/nominee, irrespective of the amount standing to the credit of the deceased account holder.
Accounts without the survivor/nominee clause
– In deceased deposit accounts without the survivor/nominee clause, banks may fix some minimum threshold limit for settlement of claim without insisting on production of any documents other than indemnity.
– Premature termination of Term deposit accounts would not attract any penalty and such clause may be incorporated in the opening form itself.
– Any claim on the balances lying in deceased depositors received from survivor(s) / nominee(s) should be settled within a period not exceeding 15 days from the date of receipt of the claim subject to the production of proof of death of the depositor and suitable identification of the claim(s), to the bank’s satisfaction.
Access to Safe Deposit Locker/Safe Custody articles (with survivor/nominee clause)
– In the event of death of sole locker hirer, banks may give access to the locker with liberty to remove the contents of the locker to the nominee and in case of the locker hired jointly with operational instruction to operate under joint signatures and nomination exists, bank may give access to the locker with liberty to remove the articles jointly to the survivor(s)/nominee.
– In the case of the locker was hired jointly with survivorship clause and the hirers instructed that the access of the locker should be given over to “either or survivor”, “anyone or survivor” or “former or survivor” or according to any other survivorship clause, banks may follow the mandate in the event of the death of one or more of the locker-hirers.
Access to Safe Deposit Locker/Safe Custody articles (without survivor/nominee clause)
– Banks are required to evolve a customer-friendly procedure drawn up in consultation with their legal advisers for giving access to legal heir(s) / legal representative of the deceased locker hirer. Similar procedure should be followed for the articles under safe custody of the bank.
– Banks are also required to prepare an inventory before returning articles left in safe custody/before permitting removal of the contents of the safe deposit locker. Banks are not required to open sealed/ closed packets left with them in Safe Custody or found in locker while releasing them to the nominee and surviving locker heirs/depositor of safe custody article. Banks are required to put in their website the entire procedure for improvement in customer service.
Settlement of claims in respect of missing persons
Banks are required to formulate a policy which would enable them to settle the claims of a missing person after considering the legal opinion and taking into account the facts and circumstances of each case (claims are to be settled as per provisions u/s 107/108 of Indian Evidence Act 1872).
In order to avoid inconvenience and undue hardship to the common person, banks may, keeping in view their risk management systems, fix a threshold limit, up to which claims in respect of missing persons could be settled without insisting on production of any documentation other than (i) FIR and the non-traceable report issued by police authorities and (ii) letter of indemnity.
Unclaimed deposits/Inoperative Accounts in banks
– A savings as well as current account should be treated as inoperative / dormant if there are no transactions in the account for over a period of two years.
– If credits by way of interest on Fixed Deposit account is being received in the Savings Bank accounts as per the mandate of the customer, the same can be treated as a customer induced transaction and the account can be treated as an operative account. It will become inoperative only after 2 years from the date of the last credit entry of the interest on Fixed Deposit account.
– Banks need to ascertain the whereabouts of the account holder(s) by letters, telephone calls, or contacting legal heirs, or contacting the introducers or employers as available record or any other means suited to them in case of no operations (credits other than periodic interest or debiting service charges) for more than one year.
– Periodical interest should continue to be credited in the inoperative accounts and proceeds of FDR unpaid, the amount left unclaimed should attract Savings Bank rate of interest. Inoperative accounts should get audited periodically. There should not be any charge on activation of an inoperative account.