What changed
RBI supersedes earlier circulars (2000 and 2001) to simplify procedures for settling claims of deceased depositors. Banks are now explicitly barred from insisting on legal documents like succession certificates or indemnity bonds for accounts with a survivor/nominee clause. For accounts without nomination, banks may set a threshold for simplified settlement requiring only a letter of indemnity.
What it means for you
Banks must streamline their claim settlement processes to reduce distress for families of deceased depositors. Non-compliance with these simplified norms will invite serious supervisory action. This shift places greater responsibility on banks to verify identity and death through documentary evidence while avoiding unnecessary legal hurdles.
What you must do
- Update internal policies to ensure no insistence on succession certificates, probate, or indemnity bonds for accounts with survivor/nominee clauses.
- Train branch staff on the simplified procedure and the need for only identity and death proof for such accounts.
- Define a minimum threshold limit for accounts without nomination where claims can be settled with just a letter of indemnity.
- Review and withdraw any existing bond or surety requirements that contradict this circular.
Who it affects
All State and District Central Co-operative Banks, Branch managers handling deposit account claims, Legal heirs and nominees of deceased depositors
Can banks still ask for a succession certificate if the account has a nominee?
No, for accounts with a valid nomination or survivorship clause, banks must not demand succession certificates, letters of administration, probate, or any indemnity bond, regardless of the account balance.
What documentation is needed for accounts without a nominee?
Banks can set a minimum threshold limit for such accounts. Up to that limit, claims can be settled with only a letter of indemnity from the legal heir, without other legal documents.
Does payment to a nominee fully discharge the bank's liability?
Yes, provided the bank has verified the nominee's identity and the depositor's death through proper documents, and there is no court order restraining payment. The nominee receives the amount as trustee for legal heirs.