In the following cases, the banks have been asked to simplify the procedure for payment of the balance in the deposit account to the survivor / nominee of the deceased deposit holder :

Where the deposit account was opened with a nomination facility; or

Subsequently, a valid nomination was made by the account holder; or

Where the account was opened with survivorship clause ("either or survivor", or "anyone or survivor", or "former or survivor", or "latter or survivor").

The RBI has advised all the banks not to insist on the production of a succession certificate, letter of administration or probate, etc. Similarly, the banks should not ask for any bond of indemnity or surety from the survivor(s) / nominee and this is irrespective of the amount standing to the credit of the deceased account holder.

Accounts without the survivor / nominee clause.

It is not uncommon to find cases where the deceased depositor had not made any nomination or the account is without the `either or survivor' provision. In such cases, the survivors invariably face problems with banks while trying to retrieve the funds from the deposit accounts. As per the new circular, banks have been advised to adopt a simplified procedure for repayment to the legal heirs. The RBI has stressed the need for Banks to keep in view the imperative need to avoid inconvenience and hardships to the common person. In such cases, individual banks are required to fix their own limits upto, which they would release the amount without insisting for any documentation, except the letter of indemnity.

Premature termination of term deposit accounts

In case of term deposits, the RBI has asked the banks to incorporate a suitable clause in the account opening form itself. Such a clause would provide that in the event of death of the depositor, premature termination of term deposits would be allowed. No penal charge has to be levied by the bank on such premature withdrawal. Besides, it is obligatory for the bank to mention all the conditions in this regard on the account opening form itself.

Access to the safe deposit lockers / safe custody articles

The banks have been asked to follow a similar procedure as is applicable in the case of deposit accounts when requests are received from a survivor or a nominee. However, the RBI is in the process of issuing a separate set of guidelines in this regard, so we will have to wait until then.

Time limit for settlement of claims

From time to time we come across cases where harried survivors / nominees are made to run around the bank for getting their claim settled by the bank. Now the RBI wants all the banks to settle the claims in respect of deceased depositors and release payments to survivors/nominee within a period of 15 days from the date of receipt of the claim. However, this is subject to two conditions, namely, production of proof of death of the depositor and suitable identification of the claim to the bank's satisfaction.

Accountability

It is incumbent for the banks to report the details of the number of claims received pertaining to deceased depositors and those pending beyond the stipulated period. These reports have to be sent by the banks to the Customer Service Committee, at appropriate intervals and on an ongoing basis.

Duty of deposit holders

Better late than never is what one can say about the instructions issued by the RBI asking the banks to make the life of deposit holders and their survivors a little easy. Each bank depositor should remember that rules by itself will not solve his problems, it is incumbent for the depositor to ensure that he familiarizes himself with the applicable terms and conditions Be it a term deposit or a locker, ensure that there is atleast one joint holder with an `either or survivor' clause. In addition, a nominee should also be provided so that in case of the unfortunate event, legal heirs don't have to run in circles. It is only an alert depositor who can keep the banker on his toes. It is to be hoped that each and every bank would respond to the RBI instructions and ensure that a bank customer gets his due.

Source http://www.indiancaonline.com/