Transfer of Amount
amit
(Querist) 07 January 2010
This query is : Resolved
X died 10 years ago, leaving behing his wife Z, & 2 son 1 daughter(all married). Z is drawing Family Pension from PNB, Where an amount of Rs.70,000/- is still lying in account of X. There is no nominee in X account.
Now, Can the amount of her husband X be tranfered to her(Z) pension account, without calling her 3 chldrens from other states who do not have any objection in transfer of their father's bank amount into their motherr's Pension account ?
Can the paper work / formalities of bank be reduced,just by giving an application by Z. since this amount is of her deceased husband?
Is there is any ruling, relating to this, which shows just by giving appplication the amount can be transfered ?
A V Vishal
(Expert) 07 January 2010
No Amit, in case X died intestate then a succession certificate along with a NOC from all the children and an indemnity bond should be given to get the amount transferred into Z A/c.
The bank can make the payment to the legal heirs on the strength of Indemnity Bond and affidavit. There is no compulsion for obtaining the succession certificate from the court, unless there is dispute among the legal heirs. But Bank sometimes insists for obtaining succession certificate, in order to fully safeguard them. As per information available with me, there are no RBI guidelines in this regards, but you would be still advised to check the same.
B K Raghavendra Rao
(Expert) 07 January 2010
RBI guidelines given discretionary power to Banks regarding succession certificate if the amount involved is not small. In the Bank for which I am an advisor, we do not insist for succession certificate for a sum not exceeding Rs. 50,000/-. However, banks are not prohibited from payments beyond that amount if they are satisfied about the successors to the claimed amount. Obtaining a succession certificate is not easy. The case drags on and compulsorily a newspaper advertisement has to be released involving expenditure. Court fee has to be paid at the rate of about 4 to 5 per cent of the amount claimed. Therefore, it is better to talk to the Bank authorities and ascertain the minimum documents they need for release of the amount
B K Raghavendra Rao
(Expert) 07 January 2010
Small correction read second line 'if the amount involved is small'.
aman kumar
(Expert) 07 January 2010
completely agree with B K Rao.
Manish Singh
(Expert) 07 January 2010
Here it must be noted that only no objection affidavits form other legal heirs can do the needful. since requirement of succession certificate is not mandatory under law.
N RAMESH.
(Expert) 07 January 2010
Mr Vishal and Mr.Rao have clarified in detail.
Manish Singh
(Expert) 07 January 2010
Mr. BK Rao's opinion has substance and must be relied upon.
Please go through the following guidelines of the RBI in this regard :
6. Settlement of claims in respect of deceased depositors
To facilitate expeditious and hassle-free settlement of claims on the death of a depositor, the following guidelines may be followed:
ACCESS TO BALANCE IN DEPOSIT ACCOUNTS
6.1 Accounts with survivor/ nominee clause
In the case of deposit accounts where the depositor had utilized the nomination facility and made a valid nomination or where the account was opened with the survivorship clause ("either or survivor", or "anyone or survivor", or "former or survivor" or "latter or survivor"), the payment of the balance in the deposit account to the survivor(s)/nominee of a deceased deposit account holder represents a valid discharge of the bank's liability provided :
(a) the bank has exercised due care and caution in establishing the identity of the survivor(s) / nominee and the fact of death of the account holder, through appropriate documentary evidence;
(b) there is no order from the competent court restraining the bank from making the payment from the account of the deceased; and
(c) it has been made clear to the survivor(s) / nominee that he would be receiving the payment from the bank as a trustee of the legal heirs of the deceased depositor, i.e., such payment to him shall not affect the right or claim which any person may have against the survivor(s) / nominee to whom the payment is made.
6.2 It may be noted that since payment made to the survivor(s) / nominee, subject to the foregoing conditions, would constitute a full discharge of the bank's liability, insistence on production of legal representation is superfluous and unwarranted and only serves to cause entirely avoidable inconvenience to the survivor(s) / nominee and would, therefore, invite serious supervisory disapproval. In such case, therefore, while making payment to the survivor(s) / nominee of the deceased depositor, the banks are advised to 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.
6.3 Accounts without the survivor/ nominee clause
In case where the deceased depositor had not made any nomination or for the accounts other than those styled as "either or survivor" (such as single or jointly operated accounts), banks are advised to adopt a simplified procedure for repayment to legal heir(s) of the depositor keeping in view the imperative need to avoid inconvenience and undue hardship to the common person. In this context, banks may, keeping in view their risk management systems, 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.
6.4 Premature Termination of term deposit accounts
In the case of term deposits, banks are advised to incorporate a clause in the account opening form itself to the effect that in the event of the death of the depositor, premature termination of term deposits would be allowed. The conditions subject to which such premature withdrawal would be permitted may also be specified in the account opening form. Such premature withdrawal would not attract any penal charge.
6.5. Treatment of flows in the name of the deceased depositor
In order to avoid hardship to the survivor(s) / nominee of a deposit account, banks are advised to obtain appropriate agreement / authorization from the survivor(s) / nominee with regard to the treatment of pipeline flows in the name of the deceased account holder. In this regard, banks could consider adopting either of the following two approaches:
• The bank could be authorized by the survivor(s) / nominee of a deceased account holder to open an account styled as 'Estate of Shri ________________, the Deceased' where all the pipeline flows in the name of the deceased account holder could be allowed to be credited, provided no withdrawals are made.
OR
• The bank could be authorized by the survivor(s) / nominee to return the pipeline flows to the remitter with the remark "Account holder deceased" and to intimate the survivor(s) / nominee accordingly. The survivor(s) / nominee / legal heir(s) could then approach the remitter to effect payment through a negotiable instrument or through ECS transfer in the name of the appropriate beneficiary.
6.6 Access to the safe deposit lockers / safe custody articles
For dealing with the requests from the nominee(s) of the deceased locker-hirer / depositors of the safe-custody articles (where such a nomination had been made) or by the survivor(s) of the deceased (where the locker / safe custody article was accessible under the survivorship clause), for access to the contents of the locker / safe custody article on the death of a locker hirer / depositor of the article, the banks are advised to adopt generally the foregoing approach, mutatis mutandis, as indicated for the deposit accounts. Detailed guidelines in this regard are, however, being issued separately.
6.7 Time limit for settlement of claims
Banks are advised to settle the claims in respect of deceased depositors and release payments to survivor(s) / nominee(s) within a period not exceeding 15 days from the date of receipt of the claim subject to the production of proof of death of the depositor and suitable identification of the claim(s), to the bank's satisfaction. Banks should report to the Customer Service Committee of the Board, at appropriate intervals, on an ongoing basis, the details of the number of claims received pertaining to deceased depositors / locker-hirers / depositors of safe custody article accounts and those pending beyond the stipulated period, giving reasons therefor.
6.8 Provisions of the Banking Regulation Act, 1949
In this connection, attention is also invited to the provisions of Sections 45 ZA to 45 ZF read with Section 56 of the Banking Regulation Act, 1949 and the Co-operative Banks (Nomination) Rules, 1985.
