Surety amount and required documents to claim fd's without nomination
susanta
(Querist) 05 October 2013
This query is : Resolved
Hi Experts,
Here is my story so far,
We are 2 sisters, myself and my mother.My father passed away last year. He had Fixed deposits of around 10 lacs in S.B.I, (Visakhapatnam) for which he has not provided any nominee. So on inquiring with the Manager, he asked to obtain the legal heir certificate. After 6 long months, I got certificate. Now the manager has asked to get an Indemnity bond of around 20-30 lacs and also asked for a disclaimer affidavit and also an affidavit from 2 independent person stating that they know our family from long and as per their knowledge we are the only heirs.
1) Myself and both my sisters has signed the disclaimer and given rights to our Mother to collect the amount.
2) Since we are lower middle class people and most of the persons known to our family are not that knowledgeable, getting surety was a big problem(they were all afraid), but we managed to get 2 surety. One of them own a registered apartment worth 11 lacs in 2010 and another surety who owns a house and living in it for past 15 years but it is not registered and only has a sale deed with them
So Experts can you please clarify on the following doubts,
1) Since we are already providing an affidavit from 2 independent persons stating that we are the only heirs, do we need a legal heir certificate again.
2) As we have both the legal heir certificate and disclaimer certificate, what is the need of surety?
3) and for 10 lac amount, what is the surety amount required?
Please advise me on this, as this process dragging since past 1 year and causing a lot of stress and pain to our family
Thanks in advance,
Susanta
ajay sethi
(Expert) 06 October 2013
bank ahas to safeguard its interest . if bank makes payment of Rs 10 lakhs to you without taking adequate precautions it would be in a soup if other claimants demand FD money . hence demand for surety . the problem was your father did not make any nominations nor left any will . as public sector banks they have to be cautious . the stand of bank is in conformity with its guidelines for handing over fixed deposits amount in event depositor dies without nay nomination
Kumar Doab
(Expert) 06 October 2013
The Bank and its BMs are duty bound to supply the written version of its policy, procedures to nominee’s/survivor’s and keep it on its website too………….. Banks and its BM’s can not and should ask for anything beyond the policy. If court has granted heir ship certificate than that is final for the bank and it’s BM.
You could adopt transactions by written mode too.
{You may go thru 21.5 : Customer guidance and publicity given below.}
Take the help of elders, well known and influential person of your locality e.g; Municipal Councilor, lawyer etc…………………………..and approach Regional Head/AGM/Circle head/Nodal Officer/Chairman if you feel that BM of the bank is complicating.
You seem to have complied to all the legitimate requirements.
>> RBI / 2009-10 / 57
DBOD.No.Leg. BC.9 /09.07.006/2009-10 July 1, 2009
Master Circular on Customer Service in banks
20. Settlement of claims in respect of deceased depositors –
20.2 Accounts without the survivor / nominee clause
In case where the deceased depositor had not made any nomination or for the accounts other than those styled as "either or survivor" (such as single or jointly operated accounts), banks are required to adopt a simplified procedure for repayment to legal heir(s) of the depositor keeping in view the imperative need to avoid inconvenience and undue hardship to the common person.
{ It is felt that the minimum threshold limit, for the balance in the account of the deceased depositors, up to which claims in respect of the deceased depositors could be settled without insisting on production of any documentation other than a letter of indemnity, in case of SBI is Rs.10000/ only.}
20.6 Time limit for settlement of claims
21.4 Simplified operational systems / procedures
As per the direction of Reserve Bank, the Indian Banks' Association (IBA) has formulated a Model Operational Procedure (MOP) for settlement of claims of the deceased constituents, under various circumstances, consistent with the instructions contained in this circular, for adoption by the banks. The banks should, therefore, undertake a comprehensive review of their extant systems and procedures relating to settlement of claims of their deceased constituents (i.e., depositors / locker-hirers / depositors of safe-custody articles) with a view to evolving a simplified policy / procedures for the purpose, with the approval of their Board, taking into account the applicable statutory provisions, foregoing instructions as also the MOP formulated by the IBA.
21.5 Customer guidance and publicity
Banks should place on their websites the instructions along with the policies / procedures put in place for giving access of the locker / safe custody articles to the nominee(s) / survivor(s) / Legal Heir(s) of the deceased locker hirer / depositor of the safe custody articles. Further, a printed copy of the same should also be given to the nominee(s) / survivor(s) / Legal Heir(s) whenever a claim is received from them. Banks should view these instructions as very critical element for bringing about significant improvement in the quality of customer service provided to survivor(s) / nominee(s) of deceased depositors / locker hirer / depositor of safe custody articles.
>> Model Operational Procedure for
Settlement of Claims of Deceased Depositors & Return of Articles in Safe Deposit Lockers/ Safe Custody
http://www.iba.org.in/MOPSettlementClaims.pdf
A- 4 Application for Deceased claim (to be used for cases other than nomination/joint account with survivor clause)
A- 5 Affidavit Cum Indemnity Letter
A- 6 Receipt
A- 9 Legal heirs under various personal laws
susanta
(Querist) 06 October 2013
@Kumar Doab. Thank you very much for the detailed information. I will go through the documents and will then approach the Bank with information in hand.
@ajay sethi...I agree with you that bank has to safeguard its interests. But if the legal heir and disclaimer certificate are genuine, then shouldn't it be sufficient. The legal heir certificate was given after going through the lengthy process of verification and the disclaimer was also verified by the bank. If it still demands for surety then there was no need for a legal heir..anyway the major concern for me is the term "Surety good for the amount". It is very vague. How is good for the amount identified. The service manager said it was 40 lacs but the manager was okay with 20 lacs. So can you please clarify this point?
Thanks to one and all again.
Susanta
Rajendra K Goyal
(Expert) 06 October 2013
Bank is fully justified in demanding the adequate and satisfactory indemnity for releasing the money. This is in confirmation of the RBI and IBA guidelines.
The heirship certificate is proof of heirs of the deceased, it is not succession certificate.
If succession certificate is to be got issued it is very costly process as compared to submission of indemnity to the Bank.
Till the claim is genuine, any known person to the family should not refuse to sign the indemnity.
Kumar Doab
(Expert) 06 October 2013
You have posted in your posts that:
“So on inquiring with the Manager, he asked to obtain the legal heir certificate. After 6 long months, I got certificate.”
“and also asked for a disclaimer affidavit “
“1) Myself and both my sisters has signed the disclaimer and given rights to our Mother to collect the amount.’”
“and the disclaimer was also verified by the bank.”
“but we managed to get 2 surety’
This should imply that as demanded by the bank: the court has issued legal heir ship certificate and the disclaimer has been verified by the bank.
You may carefully go thru the Disclaimer.
Probably it has the provision for introduction or surety by one or two persons………………………and from your post it is construed that you have complied with it.
BM of the bank must have provided the letter of Indemnity and you must have supplied it.It is also recommended by IBA.
Rest of the formalities if include more number and amounts of sureties then it should be properly advocated by regulator RBI, and then IBA in its MOP and should have been properly advertised by the bank on its website and a print out should be handed over to the nominees/survivors.
The day to day practices of the bank does not and should not matter.
Has the BM supplied the T&C or policy in writing and does it include clause on more number of sureties?
If you have duly complied with all requirements as stipulated by RBI, IBA, bank then BM should not hesitate to release the funds.
susanta
(Querist) 06 October 2013
@Kumar Doab...yes there is a provision for surety in the document provided by SBI. But the major problem is the surety amount required for my claim of 10lacs and the acceptable documents of the surety amount. I feel they are trying to use delay tactics based on this. The Service manager asked for surety worth 40lacs but the BM agreed for 20lacs but asked me to get passport size photos of the witness along with their identity proofs. ID proof is requred, but why the photos? It looks like they just want to delay the process.
So if have any experience on the generally acceptable amount as surety for a claim will be helpful if they try to raise any issue in the future.
Rajendra K Goyal
(Expert) 06 October 2013
Bank has to get the KYC (Know your customer) of all the parties signing any document in the claim papers so that at any later stage he can not be held liable for not observing due diligence in identifying the signatory, while dealing with the claim. Identity proofs, address proof, photo are necessary part of the KYC exercise.
What a Banker can get by using delaying tactics. The claimant would come to him time and again and would interfere his work again and again in heavy burdened situation. Claim once settled, his one file would be over. But he has to observe full care in such claim and each claim settled by the banker is audited minutely. Any discrepancy may attract disciplinary action on the him.
ajay sethi
(Expert) 06 October 2013
surety amount would be as per guidelines adopted by the bank for settlement of claims . obtain a copy of said guiddelines . it would mention amount of surety required for settlement of claim . if amount of fixed deposit is Rs 10 lakhs maximum amount of Rs 20 lakhs should suffice to protect bank interets .
Kumar Doab
(Expert) 06 October 2013
The BM of the bank and everyone else in bank is duty bound to supply the printed version of the policy………………...........and you are within your rights to get certified copy of the printed version.
The disclaimer is the document prepared by bank.
Id you go thru the documents cited by IBA in its MOP does not ask for surety.
The BM can demand that he shall not accept anything less than stated in the policy (approved by RBI) and you can claim nothing more than stated in the RBI approved policy shall be tendered.
The day to day practices of the bank does not and should not matter.
The matter ends without any heartburn to anyone.
After the disclaimer (duly verified by the bank and its BM) the lady is the lawful successor of the wealth of the deceased and the wealth now belongs to her.
If the bank and BM is rigid, adamant, recalcitrant, bossy, matter can be viewed accordingly.
The funds held in the FD are debt on the bank. Like the bank decided ROI for its debtor the lady being owner of the funds shall decide ROI for its debtor here the bank and in particular BM. (This bank SBI charges to the tune of 3.75% per month in one of its products SBI cards..........)
One option is: Complete the KYC norms and obtain the proceeds. However build some favorable written record and agitate later and keep evidence and witnesses.
Other option is: Take a crowd of well wishers and drill the sense into the heads..........seek legal opinion and proceed under expert advise. Banks are quick to understand that if it has to operate in a locality it has to behave...............
Choose your options wisely.
Hope you can read between the lines.
If your community and your locality is united there is a lot you can do with banks, Insurance companies, Internet companies, Mobile companies, Mutual Fund wallas..................and others............
There should be no need for guess, speculation by BM, service manager…………………
The amount to be disbursed is 10Lac and surety worth 10Lacs 1 Rupee should be sufficient. If BM or the service manager wants more let them state so in writing under the original seal of the bank and signature by hand and quote from the certified copy of the policy issued by RBI.
Or let their superiors justify.
The RBI is central bank and guidelines issued by RBI are not discretionary on banks…………………
Guidelines issued by RBI to banks are rather mandatory having statutory force.
Rajendra K Goyal
(Expert) 06 October 2013
Following are few lines about surety acceptable by the Bank:
One surety good for the amount. If one surety is not considered good for the amount another surety may be obtained to ensure that both are jointly good for the amount involved.
Kumar Doab
(Expert) 06 October 2013
Mr. Goyal is absolutely right on surety acceptable by the Bank.
Guest
(Expert) 07 October 2013
Condition for surety of 20-30 lakhs for the FD amount of 10 lakhs is quite absurd. When the bank has been provided with the succession certificate, that can ask for indemnity bond duly witnessed by two witnesses for the amount plus the interest, if someone else claims later. Even if you have provided surety of two persons that is more than the requirement and should be enough to make payment to the legal heir. If they still insist for surety of 20-30 lakhs, ask the bank to give in writing with due justification for 20-30 lakhs surety.
At the most, the bank should be more than satisfied, if the amount is kept in FD account with the same bank.
Better start formal correspondence with the bank to get everything in writing for what they require and why. If still they refuse to pay, make a complaint to the banking ombudsman for the harassment the bank is causing to your mother.
Raj Kumar Makkad
(Expert) 07 October 2013
Very well advised by experts leaving no scope to add.
susanta
(Querist) 19 October 2013
Thank you all for your replies. It was very helpful. Sorry for replying late. I hope you understand.
