Some branches of banks were not following the simplified procedure for settlement of claims in respect of deceased depositors
The Reserve Bank of India (RBI) on Monday directed urban co-operative banks not to insist upon succession certificates from the nominees while settling claims in cases of deceased depositors to make the procedure fast.
“In case of access to balance in deposits accounts with survivor / nominee clause, 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., 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,” the RBI said in a circular.
Access to balance in deposits accounts without survivor / nominee clause, banks should 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, the circular added.
According to RBI, some branches of urban co-operative banks were not following the simplified procedure for settlement of claims in respect of deceased depositors. "We, therefore, advise all Urban Co-operative Banks to instruct all their branches to adhere the extant instructions on the subject to facilitate expeditious and hassle free settlement of claims on the death of a depositor," it added.
Banks were also advised to give wide publicity to the above and provide guidance to deposit account holders in this regard.