Bank fixed deposit in joint names
ARUN BANERJEE
(Querist) 12 October 2012
This query is : Resolved
My father deposited some money in a Bank in Fixed Deposit Scheme with me as second holder and payable to either or survivor. No nomination was made. Now my father has expired and when I claimed the money from the Bank on maturity, my sister claimed share of the money posing as one of the legal heirs of my father and blocked the payment by the Bank. Is her claim legally tenable?
Ms.Nirmala P.Rao
(Expert) 12 October 2012
Dear Client,
In case of either or survivor clause in fixed deposit policy, Bank's liability gets duly discharged after payment of FD money to the survivor provided he submits the following documentary evidence in support of his claim such as deaths certificate, Indemnity Bond or indemnity letter saying that he would indemnify the Bank to the extent of fixed deposit amount in case of claims by other legal heirs and if a competent court restrains the bank from paying the amount to the survivor. IF YOUR FATHER HAS NOT LEFT A WILL, YOUR SISTER HAS AN EQUAL SHARE IN THE PROPERTY.
Ms.Nirmala P.;Rao
Legal expert and Blogger on Law and Politics through www.wizard-legal25blog.com
malipeddi jaggarao
(Expert) 13 October 2012
The Bank's action is right. It will pay to the surviving joint account holder only on maturity and only in the absence of any claim from the purported legal heirs of the deceased. In this case, your sister filed her claim. Hence unless the dispute is settled the Bank will with-hold the deposit. At the same your sister is also right. Succession opens on the demise of your father.
Guest
(Expert) 13 October 2012
Dear Arun
You have not stated whether your sister produced any stay order of the court or merely submitted an application to the bank claiming the amount of her share?
Guest
(Expert) 13 October 2012
Dear Jaggarao,
Your views may probably need review, as the querist has nowhere mentioned that her sister produced any stay order of the court. In the absence of a stay order, the bank does not enjoy any right to deny payment to the surviving operator in EOS type case merely on objection by someone. In the absence of any order from the court of law, her sister can claim her share only from her brother not through bank.
malipeddi jaggarao
(Expert) 14 October 2012
Dear Shri Dhingra saheb
In E or S joint accounts, if one of the joint account holder demises, the banks
i) will not make payment to the survivor before maturity;
ii) will not make payment if the legal heirs put a claim in writing either before or on maturity.
iii) if the claim comes from other quarters (who are not legal heirs and who could not produce Legal Heirs Certificate), banks ignore such claims and expresses its inability to the claimant and the claimant has to rush to court to get a stay order. This is the normal practice in the banks as per my knowledge.
Guest
(Expert) 14 October 2012
Dear Shri Jaggarao,
Would you please like to clarify further with reference to the following points of your statement:
POINT (i) will not make payment to the survivor before maturity:
My Query: Does your bank not allow an account holder to close his account prematurely in a single account case?
POINT (ii) will not make payment if the legal heirs put a claim in writing either before or on maturity.
My Query: Have your bank got the power to decide the legal heirship under the provisions of the Indian Succession Act to anyone when he prefers his/her claim to the bank? If so what criteria and procedure is adopted by the bank to decide the legal heirship?
POINT (iii) if the claim comes from other quarters (who are not legal heirs and who could not produce Legal Heirs Certificate), banks ignore such claims and expresses its inability to the claimant and the claimant has to rush to court to get a stay order.
Query: If your bank can decide the legal heirship, as against item (ii), what is the criteria by which it is decided by the bank that the claimant is not the legal heir?
POINT (iv) This is the normal practice in the banks as per my knowledge.
My Query: Would you please like to provide me for my examination the extracts of the rules/ orders/ instructions of your bank under which a practice is made to debar a joint holder of accout to operate the account as per normal rules of the bank when the account is treated as a single account on the death of the other joint holder of account? You may kindly provide the extracts through email at: dcgroup@gmail.com
malipeddi jaggarao
(Expert) 15 October 2012
(i) Yes. But in case of E or S cases where payment ha to be made to Survivor, unless the LHRs join in the request for premature closure, we do not accept premature closure request from the survivor. I am sure about this prevalent practice and guidelines in the Banks. However, give some time to sendthe guidelines to you (Mr.Dhingra).
(ii) As regards my answer to this I am sure.
(iii) This is applicable even before or on maturity. This is the main facility in joint accounts.
(iv) Sure Mr.Dhingra - for our clarify, I will try and come back to you.
Guest
(Expert) 15 October 2012
Dear Jaggarao,
I shall wait for the requisite documents from you for examination purpose before I place my opinion on your clarifications.
malipeddi jaggarao
(Expert) 16 October 2012
Dear Mr.Dhingra.
After verification I realized my mistake. The comments made by me in the above post are applicable only in the joint accounts with "Former or Survivor" operational instructions. They are not applicable to if the instructions are "Either or Survivor". Thanks for your initiative in correcting my opinion. I also advise Mr.Arun to go by the comments of Mr.Dhingra.
Guest
(Expert) 16 October 2012
Dear Jaggarao,
A graceful act, indeed on your part, to update your knowledge, rather than depending upon presumptions or practice any more! Practice always depends upon self made easy routes tried to be adopted by individuals for their own conveniences or presumptions which, though inadvertantly or through an oversight, can sometimes cause deviations to such an extent that the same become the cause of open violation of prescribed law/rules.
malipeddi jaggarao
(Expert) 16 October 2012
Thanks u Mr.Dhingra. This is the way to keep us updated.
Guest
(Expert) 16 October 2012
You are welcome please.
