Nomination
sachindeshpande
(Querist) 17 August 2012
This query is : Resolved
I am working in bank, our account holder has made the valid nomination before he dies , our legal adviser is insisting on succession certificate for payment of death claim to deceased nominee, our legal advisor claims that nomination can be challenged in court .In such case bank would be in trouble. Please guide me.
Guest
(Expert) 18 August 2012
If your bank has not already prescribed the condition of production of succession certificate after some limit of the deposit amount, your bank has to abide by the provisions of Banking Companies Nomination Rules 1985. You may like to see the website of Indian Banks Association at:
http://www.iba.org.in/nomination.asp
The site of the Indian Banks Associationm itself, provides the following guidelines
Banking Companies (Nomination) Rules 1985 permits banks to pay dues to nominees in the event of death of depositor(s) without asking for succession certificate or verifying claims of legal heirs. This simplifies settlement. Of course, as Trustee the nominee is accountable to legal heirs.
Nomination facility available for bank deposits, safe deposit lockers, safe custody articles.
There can be only one Nominee for a deposit account whether held singly or jointly.
There can be two nominees for a jointly held locker.
A person legally empowered to operate a minor's account can file a nomination on behalf of the minor.
However, in case of heavy balance, the bank can inist on some indemnity bond from the nominee to safeguard its interest, but cannot compel for production of succession certificate. If a nominee has to produce succession certificate what is the utility of the nomination rules of the banking companies?
malipeddi jaggarao
(Expert) 20 August 2012
Well explained by Mr.Dhingra. Nothing to add. Please send the Banking Companies (Nomination) Rules 1985 and ask your legal adviser to reconsider the opinion. Nomination facility is provided in the act for hassle free withdrawal of the money by the person on whom the depositor reposes his trust. Ofcourse as rightly told by Mr.Dhingra the nominee is the owner of the funds thus placed in his hands. He is only a trustee in whom the depositor reposed his confidence. The nominee is accountable to the legal heirs and any foul play is subject to legal scrutiny and remedy by the legal heirs against the nominee. Bank is free once it adheres to the instructions of the deceased depositor by placing the funds in the hands of the nominee. Of course the nomination should be valid.
Sudhir Kumar, Advocate
(Expert) 20 August 2012
