By Joel Rebello
Copyright indiatimes
Reserve Bank of India (RBI) has standardised guidelines for banks to settle claims of deceased customers to stop divergent practices among banks in this regard. The central bank said that while making payment to the nominee or survivor of the deceased depositor, the bank shall not insist on production of legal documents such Succession Certificate, Letter of Administration, Probate of Will, etc., or seek any bond of indemnity/ surety from the nominee/ survivor/ third-party, irrespective of the amount standing to the credit of the deceased account holder. In a case of accounts that do not have a nominee or a will or a contesting claim, banks can settle total amount of Rs 5 lakh for co-operative banks and Rs 15 lakh for other lenders by taking a simple RBI mandated form, death certificate of the deceased depositor, claimant’s verfified identity. The bank must also take an indemnity bond from the claimant and no objection from non-claimant legal heirs, if applicable.Legal heir certificate issued by a competent authority or declaration given in specified RBI format by an independent person who is well known to the family of the deceased, is not a party to the claim and can be accepted by the bank.In case the depositors claims are above the RBI set limit a succession certificate along with other documents like death certificate, claimant’s verified identity, bond of indenmity, no objection certificate from non claimants and legal heir certificate will need to be submitted.Live EventsAn affidavit given in the RBI format, sworn before a notary or judge regarding the legal heir(s) of the deceased depositor, by an independent person who is well known to the family of the deceased, may also be submitted in case there is no sucession certificate. Banks have to implement these new procedures by March 31, 2026. In case the depositor only has a will and no survivor and in cases where a person other than a legal heir is named as a beneficiary, all applicable documents have to be obtained from the beneficiary.In cases involving dispute amongst the legal heir(s) and/ or the beneficiaries named in the Will of the deceased depositor, the bank shall settle claims on the basis of probate of Will or Letter of Administration or Succession Certificate or Court order/ decree, as applicable.If there is an order from a court restraining the bank from making the payment, the claim shall not be entertained during the period the order is in force. The settlement of claim shall be considered based on subsequent court order to that effect, RBI said.Banks have also been allowed premature termination of term deposits without any penal charge, even if the deposit is within the lock-inperiod.Add as a Reliable and Trusted News Source Add Now!
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Read More News onReserve Bank of India guidelinessettling claims of deceased customersbank procedures for deceased accountsRBI standardised guidelines for banksrbi
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(You can now subscribe to our Economic Times WhatsApp channel)Read More News onReserve Bank of India guidelinessettling claims of deceased customersbank procedures for deceased accountsRBI standardised guidelines for banksrbi(Catch all the Business News, Breaking News, Budget 2025 Events and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online….moreless
