Settlement of account in case of death of holder
chitra
(Querist) 20 May 2016
This query is : Resolved
Sir my father expired recently.he has two rd in his name one of rs above 5lakh and other of 2.5 lakh.these rd has been auto debited from the joint account of my father and me.but the rd are on his name and has no nominee. What is the procedure of claim for these rd.these rd's has been matured yesterday.please reply soon
Kumar Doab
(Expert) 20 May 2016
The joint and RD a/c is in bank or PO?
chitra
(Querist) 20 May 2016
It is in sbi
chitra
(Querist) 20 May 2016
It is state bank of India sir...
r.sathyanarayanan
(Expert) 20 May 2016
All the legal heirs are entitled to this amount.give a legal heir certificate to the bank and get the amount.
chitra
(Querist) 21 May 2016
Sir is this not possible with some affidavit or indemnity bond as to get legal heir certificate is quiet time taking process
Kumar Doab
(Expert) 21 May 2016
All legal heirs can agree to tender affidavit, indemnity,sureties to the satisfaction of bank.
What is the response of the bank?
chitra
(Querist) 21 May 2016
Sir they are not giving satisfactory answer.they are delaying everything by saying will tell u ,will tell u....
chitra
(Querist) 21 May 2016
As these rd's were auto debited from joint account ,will they can not be auto credited in to the same account?
P. Venu
(Expert) 21 May 2016
The RBI has issued comprehensive instructions vide the Circular dated which is reproduced below:
RBI/2004-05/490
DBOD.No.Leg. BC.95 /09.07.005/2004-05
June 09, 2005
To
The Chairman/CEOs of All the Scheduled Commercial Banks
(Excluding RRBs)
Dear Sir,
Settlement of claims in respect of deceased depositors – Simplification of Procedure
Pursuant to the announcement in the Mid-Term Review of the Annual Policy of the RBI on November 3, 2003, the Committee on Procedure and Performance Audit on Public Services (CPPAPS) was constituted by the RBI with a view to improving the quality of public services to the common person. The Committee in its Report No.3 on 'Banking Operations : Deposit Accounts and Other Facilities Relating to Individuals (Non-Business)', observed that the tortuous procedures, particularly those applicable to the family of a deceased depositor, caused considerable distress to such family members. While the instruction regarding settlement of claims of the deceased depositors had been issued to the banks vide our circular No.DBOD.BC.148/09.07.007/99-2000 dated March 14, 2000 and BC.56/09.07.007/2000-01 dated December 6, 2000, the present dispensation has been reviewed in the light of the recommendations of the CPPAPS and the following instructions are being issued, in supersession of all the earlier instructions on the subject, to facilitate expeditious and hassle-free settlement of claims on the death of a depositor.
2. ACCESS TO BALANCE IN DEPOSIT ACCOUNTS
(A) Accounts with survivor/nominee clause
2.1 As you are aware, in the case of deposit accounts where the depositor had utilized the nomination facility and made a valid nomination or where the account was opened with the survivorship clause ('either or survivor', or 'anyone or survivor', or 'former or survivor' or 'latter or survivor'), the payment of the balance in the deposit account to the survivor(s)/nominee of a deceased deposit account holder represents 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 the fact of death of the account holder, through appropriate documentary evidence;
b. there is no order from the competent court restraining the bank from making the payment from the account of the deceased; and
c. it has been made clear to the survivor(s) / nominee that he would be receiving the payment from the bank as a trustee of the legal heirs of the deceased depositor, i.e., such payment to him shall not affect the right or claim which any person may have against the survivor(s) / nominee to whom the payment is made.
2.2 It may be noted that since payment made to the survivor(s) / nominee, subject to the foregoing conditions, would constitute a full discharge of the bank's liability, insistence on production of legal representation is superfluous and unwarranted and only serves to cause entirely avoidable inconvenience to the survivor(s) / nominee and would, therefore, invite serious supervisory disapproval. In such case, therefore, while making payment to the survivor(s) / nominee of the deceased depositor, the banks are advised to desist from insisting on 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.
(B) Accounts without the survivor/nominee clause
2.3 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 advised 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. In this context, banks may, keeping in view their risk management systems, fix a 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.
3. Premature Termination of term deposit accounts
In the case of term deposits, banks are advised to incorporate a clause in the account opening form itself to the effect that in the event of the death of the depositor, premature termination of term deposits would be allowed. The conditions subject to which such premature withdrawal would be permitted may also be specified in the account opening form. Such premature withdrawal would not attract any penal charge.
4. Treatment of flows in the name of the deceased depositor
In order to avoid hardship to the survivor(s) / nominee of a deposit account, banks are advised to obtain appropriate agreement / authorization from the survivor(s) / nominee with regard to the treatment of pipeline flows in the name of the deceased account holder. In this regard, banks could consider adopting either of the following two approaches:
•The bank could be authorized by the survivor(s) / nominee of a deceased account holder to open an account styled as 'Estate of Shri ________________, the Deceased' where all the pipeline flows in the name of the deceased account holder could be allowed to be credited, provided no withdrawals are made.
OR
•The bank could be authorized by the survivor(s) / nominee to return the pipeline flows to the remitter with the remark 'Account holder deceased' and to intimate the survivor(s) / nominee accordingly. The survivor(s) / nominee / legal heir(s) could then approach the remitter to effect payment through a negotiable instrument or through ECS transfer in the name of the appropriate beneficiary.
5. Access to the safe deposit lockers / safe custody articles
For dealing with the requests from the nominee(s) of the deceased locker-hirer / depositors of the safe-custody articles (where such a nomination had been made) or by the survivor(s) of the deceased (where the locker / safe custody article was accessible under the survivorship clause), for access to the contents of the locker / safe custody article on the death of a locker hirer / depositor of the article, the banks are advised to adopt generally the foregoing approach, mutatis mutandis, as indicated for the deposit accounts. Detailed guidelines in this regard are, however, being issued separately.
6. Time limit for settlement of claims
Banks are advised to settle the claims in respect of deceased depositors and release payments to survivor(s) / nominee(s) 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.
Banks should report to the Customer Service Committee of the Board, at appropriate intervals, on an ongoing basis, the details of the number of claims received pertaining to deceased depositors / locker-hirers / depositors of safe custody article accounts and those pending beyond the stipulated period, giving reasons therefor.
7. Provisions of the Banking Regulation Act, 1949
In this connection, attention is also invited to the provisions of Sections 45 ZA to 45 ZF of the Banking Regulation Act, 1949 and the Banking Companies (Nomination) Rules, 1985.
8. Simplified operational systems / procedures
The Indian Banks' Association (IBA) has been advised to formulate 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 are, therefore, advised to 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 to be formulated by the IBA.
9. Customer Guidance and Publicity
Banks are advised to give wide publicity and provide guidance to deposit account holders on the benefits of the nomination facility and the survivorship clause. Illustratively, it should be highlighted in the publicity material that in the event of the death of one of the joint account holders, the right to the deposit proceeds does not automatically devolve on the surviving joint deposit account holder, unless there is a survivorship clause.
10. These instructions should be viewed as very critical element for bringing about significant improvement in the quality of customer service provided to survivor(s) / nominee(s) of deceased depositors.
11. Please acknowledge receipt.
Kumar Doab
(Expert) 21 May 2016
RBI issues 'Master Circular on Customer Services' every year, and it ha statutory force.This is available on RBI website.
The banks have to keep it on their websites and frame their own rules in line with Master Circular, and keep Master Circular and their rules on their websites.
The latest RBI circular is:Master Circular on Customer Services;
RBI/2015-16/59
DBR No.Leg.BC. 21/09.07.006/2015-16, Dated: July 1, 2015
20. Settlement of claims in respect of deceased depositors– Simplification of procedure: 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. In this context, banks may, keeping in view their risk management systems, fix a 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.
20.6 Time limit for settlement of claims
Banks should settle the claims in respect of deceased depositors and release payments to survivor(s) / nominee(s) 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.
20.7 Claim Forms to be made available
With a view to facilitate timely settlement of claims on the death of a depositor, banks are advised to provide claim forms for settlement of claims of the deceased accounts, to any person/s who is/are approaching the bank / branches for forms. Claim forms may also be put on the bank’s website prominently so that claimants of the deceased depositor can access and download the forms without having to visit the concerned bank/branch for obtaining such forms for filing claim with the bank."
So if the claim amount is within threshold limit set by SBI it can be paid against indemnity.
Meet the local AGM alongwith some seasoned/elders and submit claim forms under proper acknowledgment, and your issue may get resolved.
Kumar Doab
(Expert) 21 May 2016
20.1.2 It may be noted that since payment made to the survivor(s) / nominee, subject to the foregoing conditions, would constitute a full discharge of the bank's liability, insistence on production of legal representation is superfluous and unwarranted and only serves to cause entirely avoidable inconvenience to the survivor(s) / nominee and would, therefore, invite serious supervisory disapproval. In such case, therefore, while making payment to the survivor(s) / nominee of the deceased depositor, the banks should desist from insisting on production of succession certificate, letter of administration or probate, etc.,
https://www.rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?id=9862#202
chitra
(Querist) 21 May 2016
Thanks everyone for the cooperation...I will proceed now with this information.really thanks a lot sir
Rajendra K Goyal
(Expert) 21 May 2016
1. You can submit affidavit from independent person known to Bank, worth the amount involved.
2. Submit indemnity jointly from legal heirs and one independent person other than who gave affidavit and is worth the amount involved.
3. Submit prescribed application for payment.
4. submit stamped renunciation letter / disclaimer letter from other legal heirs.
5. Submit Id. proofs of all person who has signed any document in the process.
Since the amount involved with interest may be more than the Branch powers, the sanction may have to be obtained from proper authority which may take time.
You can obtain succession certificate from court, which would be cost and time consuming.
In case Branch does not cooperate, send complaint to Region office , local head office, central office.
T. Kalaiselvan, Advocate
(Expert) 24 May 2016
You have been given with plenty of advises and steps to be initiated in this regard, you may follow the same.
