Settlement of Claim in Bank
What is a settlement of claim?
Settlement of
claim refers to payment/release of a deceased/dissolved customer’s money’s
assets etc., remaining with the bank or allowing access to the lockers standing
in his/her name to the rightful claimants (nominees, legal heirs, successors)
of the deceased in accordance with law in such a manner that Bank’s interests
remain protected in the event of any future adverse action.
The fundamental
objective of settling the claim is to ensure that only the rightful claimants
get the moneys etc., or access to lockers belonging to the deceased individual
in accordance with the law. A person may succeed to the deposits/assets of a
deceased account holder/depositor/borrower/locker holder either on the basis of
testamentary succession (i.e., on the basis of Will) or intestate succession
(i.e., dying without executing any Will).
In either case, the claim application is required to be submitted by all
the claimants.
Procedure for settlement of claim
When a person
approaches the bank for preferring a claim on testamentary/intestate basis, the
Bank will call for the records pertaining to the accounts/assets/articles/securities
of the deceased lying with the Bank and verify as to whether:
a)
Deposit account/safe custody receipt/safe
deposit locker stands in joint names of deceased and claimant/s with
survivorship clause in favour of the claimant/s.
b)
Nomination has been made and registered in
respect of the deposit account/safe custody receipt/safe deposit locker in
favour of the claimant
In
case the deposit account/safe custody receipt/safe deposit locker is in a
single name of the deceased only, or in joint names of the deceased and others
without survivorship clause, or without nomination registered in respect
thereof, then the documents mentioned below are required to be submitted by the
claimant/s:
a. Claim
application in the bank’s format
b. Death certificate
issued by a competent authority
c. Declaration
in the Bank’s format as to the legal heirs and the religion of the deceased
given by a customer/person well known to
the Bank and who is good for the value of the claim.
Succession
certificate, if any, obtained from a competent court/authority authorizing the
claimant/s to receive the debts.
d. Affidavit
in the Bank’s format from any one of the attesting witnesses to the Will in
case the deceased has left behind a Will.
e.
Will, where the claim is based on the will of the deceased which is not
probated
or
Will with its Probate issued by a
competent court, where the Will is probated.
f. Letters of administration, where an
administrator is appointed by a competent court
g.
Letter of authority (preferably attested by a Notary Public) in Bank’s format
from the duly identified legal heirs
authorizing any one or several of them to receive the amount/securities under
the claim form the bank.
h. Indemnity
agreement
i. Stamped receipt/discharge/acknowledgement
Steps involved in settlement of claim
Accounts with nomination clause:
* Application for
deceased claim from nominee/guardian of nominee
* Copy of death
certificate (verified with the original)
* Identity proof.
Joint Account with either or survivor Clause:
* Application for deceased claim from survivor
* Copy of death certificate (verified with the original)
For
cases other than nomination/joint accounts with survivorship clause (upto
Threshold limit:
* Application for
deceased claim
* Copy of death
certificate (verified with the original)
* Letter of
Indemnity signed by claimant
* Receipt from
legal heirs
Time norms for settlement of claims
In the case of accounts with survivor/nominee clause, claims have to be settled within a period not exceeding 15 days from the date of receipt of claim papers.
In all other cases (without survivor/nominee clause), the claim should be settled within One month from the date of receipt of claim application along with requisite documents.
Payment of interest in case of term deposits of deceased depositors
On the maturity of deposit, interest shall be paid at the contracted rate.
In the case of premature withdrawal, the bank will pay interest at the applicable rate for the period for which the deposit has remained with the Bank without charging penalty.
In case of deposit being claimed after the date of maturity, interest should be paid at the Rate of 2% above the Savings Bank rate from the date of maturity till the date of payment in such cases.
Credits to deceased customer’s account
As per the instructions in force, an account styled
“Deceased Estate of Shri………………the deceased” where pipeline flows would be
credited provided no withdrawals are made. The balance lying in such accounts
may be paid by following the procedure for Settlement of Claims referred above.
Policy on Settlement of Claims in respect of deposits of missing persons:
Based on the provisions relating to settlement of
claims in respect of deposits of deceased persons put in place by the Bank,
policy on settlement of claims in respect of the deposits of missing persons
has been approved by the Board. The guidelines of the policy on settlement of
Claims in respect of Missing Persons are given below:
a) If the depositor has registered nomination with the Bank, the balance
outstanding in the
account of the missing depositor will be transferred to the account of /
paid to the nominee after the bank is satisfied about the identity of the
nominee.
b) The above procedure will be followed even in respect of a joint
account where nomination is registered with the bank.
d) In a joint deposit account, when one of the joint account holders
dies, the bank is required to make payment jointly to the legal heirs of the
missing depositor and the surviving depositor(s), in the absence of a mandate.
However, if the joint account holders had given mandate for disposal of the
balance in the account in the forms such as either or survivor, former / later
or survivor, anyone of survivors or survivor, the payment will be made as per
the mandate.
e) In the absence of nomination and when there are no disputes among the
claimants, the bank will pay the amount outstanding in the account of missing
depositor to the claimants following the prescribed procedure. To ensure that
the depositors are not put to hardship on account of delays in settlement of
claims, certain powers have been delegated to different authorities in the
Bank.
Interest Payable on term deposit of Missing Depositors:
a) On maturity of the deposit, interest shall be paid at the contracted
rate.
b) In the case of premature withdrawal, the Bank will pay interest at the
applicable rate for the period for which the deposit has remained with the Bank
without charging penalty.
c) In case of deposit being claimed after the date of maturity, interest
should be paid at the rate 2 per centage points above the Savings Bank rate
from the date of maturity till the date of payment in such cases.
Threshold Limit:
The Reserve Bank of India has advised the Banks to
fix a threshold limit up to which claims in respect of missing persons could be
settled without insisting on production of any documentation other than [i] FIR
and non-traceable report issued by police authorities and [ii] Letter of
Indemnity keeping in view the imperative need to avoid inconvenience and undue
hardship to the common person. Accordingly, Bank has fixed a threshold limit of
Rs.0.50 lakhs for settlement of claims in respect of missing persons under the
simplified procedure for settlement of claims.
Simplified procedure for settlement of claims in
respect of missing persons – documents
to be obtained [up to threshold limit]:
Under the simplified procedure recommended by the
RBI for settlement of claims in respect
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