What changed
RBI clarified that settlement of claims for missing persons must follow Sections 107/108 of Indian Evidence Act, requiring court presumption of death after seven years. RRBs are now advised to set a threshold limit for small claims that can be settled without court order, using only police documents and indemnity.
What it means for you
RRBs can now streamline small-value missing person claims, reducing legal hurdles for common people. Banks must balance risk management with customer convenience by defining their own threshold and seeking legal opinion for each case. This reduces litigation burden and speeds up claim settlement for genuine heirs.
What you must do
- Formulate a board-approved policy for settling missing person claims, including a threshold limit for simplified documentation.
- For claims above threshold, insist on court presumption of death under Indian Evidence Act before settlement.
- For claims within threshold, accept FIR, non-traceable report from police, and letter of indemnity as sufficient documentation.
- Seek legal opinion on each case to ensure compliance with facts and circumstances.
- Acknowledge receipt of this circular to your respective RBI Regional Office.
Who it affects
Regional Rural Banks (RRBs), Nominees and legal heirs of missing persons, RRB customers with missing account holders
What is the minimum period before a missing person can be presumed dead?
Under Section 108 of the Indian Evidence Act, 1872, presumption of death can be raised only after seven years from the date the person was reported missing.
Can RRBs settle missing person claims without a court order?
Yes, for claims up to a threshold fixed by the bank's policy, RRBs can settle using only FIR, non-traceable report, and indemnity, without insisting on court presumption.
What documents are needed for simplified settlement of small claims?
The bank may accept (i) FIR and non-traceable report from police, and (ii) a letter of indemnity from the claimant.