Shares held in depository a/c with a private bank
Sneha
(Querist) 17 February 2016
This query is : Resolved
My family has a HUF with My Husband as Karta, myself(Wife) and Two Major Unmarried Daughters as its Members.We has a Depository Account with a private bank and shares of about 10-12 lac is lying the account.My Husband died two months ago without any will or so.As advised by CA we reconstituted the HUF Deed and Myself became karta and my two daughters as members.We decided to continue the HUF in its current form and do not wish to dissolve it as we have our flat also in its name.The normal Bank account has been allowed to continue with new arrangement and with my signature.But the Depository account has been kept suspended and the Bank says that they shall not allow(as per guidelines of NSDL) to operate the existing Depository account by myself with my two daughters as members.Instead they would transmit these shares to my and my daughter"s Depository accounts only and for that also they would need one of these three:
01..Registered Partion Deed if myself and my two daughters desire to distribute all shares equally among ourselves as Hindu Succession Act & Hindu Women Equalk Right to Property Act., 02. Succession Certificate entitling any of us to become benificiary of these shares and 03. Copy of Registered Family Settlement/Arrangementfor transfering the sahres to all/any members in a manner we desire."
Please tell why we are not allowed to continue the existing HUF Depository account as operative with change of constituion as in the case of normal banking acccoiunt?
If this is not permitted then what should we do.The Bank informally suggests to go for option No.03 as it will require lesser formalities.
Please thro light on the subject, so we can act accordingly. Local legal/CA advises vary and Bank is adamant on its own requirement.
thanks in advance.
rajagopal.s
(Expert) 17 February 2016
Hi
As per NSDL rules, once the karta dies, the shares are allocated to the legal heirs only .
as mentioned by NSDL, all of the 3 documents as required by NDSL will need to be drafted and stamped at SRO.
Please note that NSDL has nothing against women in particular, but some how have this weird rule.
However if you have formed a HUF in writing and followed procedures, court can ask NSDL to transfer directly the shares to NSDL as share transfer and partition will result in unwarranted financial expenses and waste of time if the intention of remaining members of HUF is to continue the HUF.
H.M.Patnaik
(Expert) 17 February 2016
NSDL rules are same for all beneficiary account holders without any discrimination.
While opening any account with a bank, nomination facility is provided in the account opening form itself. So, pl. check up with your banker whether any such nomination is available in this case .
Rajendra K Goyal
(Expert) 18 February 2016
Agree with the advice from expert H.M.Patnaik.
Guest
(Expert) 18 February 2016
Bank account and depository account are two different entities, maintained by two different organisations. Bank has nothing to do with the depository account, except acting as an agent and facilitator between the share holder and the depository.
So, if third option is workable, that can be easy and time saving activity to get the things done.
