What changed
RBI superseded earlier 2000 circulars on deceased depositor claims, adopting CPPAPS recommendations. Banks are now explicitly barred from insisting on probate, succession certificate, or indemnity bond for survivor/nominee accounts. For non-nomination accounts, banks may set a threshold for simplified claims with only a letter of indemnity.
What it means for you
Banks must streamline death claim processes to avoid customer distress. For survivor/nominee accounts, payment is a full discharge of liability, so no legal representation or indemnity is needed. For other accounts, banks can use risk-based thresholds to reduce documentation. Non-compliance invites supervisory action.
What you must do
- Update internal policies to prohibit demanding succession certificates, probate, or indemnity bonds for survivor/nominee accounts.
- Consider setting a threshold limit for simplified claims on non-nomination accounts, requiring only a letter of indemnity, based on risk management.
- Train branch staff on the new simplified procedures to ensure consistent, hassle-free claim settlements.
- Review and withdraw any existing internal circulars that contradict this 2005 circular.
Who it affects
All scheduled commercial banks (excluding RRBs), Branch operations and customer service teams, Legal and compliance departments, Deposit account holders and their families
Can we still ask for a succession certificate for survivor/nominee accounts?
No. For accounts with a valid survivor or nominee clause, banks must not insist on succession certificates, letter of administration, probate, or any indemnity bond, regardless of the account balance. Payment to the survivor/nominee is a full discharge of the bank's liability.
What documentation is needed for accounts without a survivor/nominee clause?
Banks may set a minimum threshold limit for the account balance based on their risk management. For claims up to that limit, only a letter of indemnity from the legal heir is required. For amounts above the threshold, banks can follow their normal procedures but should keep the process simple.