What changed
RBI superseded its earlier circular of November 19, 2007, with new consolidated instructions. The new circular clarifies the legal basis for guardianship certificates under two specific Acts: the Mental Health Act, 1987 (for mentally ill persons, excluding mental retardation) and the National Trust Act, 1999 (for persons with autism, cerebral palsy, mental retardation, and multiple disabilities). Banks are now explicitly advised to rely on orders/certificates from competent authorities under these Acts for account opening and operation.
What it means for you
Banks must now accept guardianship certificates from district courts or collectors under the Mental Health Act, 1987, and from Local Level Committees under the National Trust Act, 1999, as valid proof for account operations. This reduces ambiguity and ensures smoother banking access for disabled persons and their guardians. Banks should train branch staff to recognize these certificates and seek legal advice in doubtful cases.
What you must do
- Update internal KYC and account opening procedures to accept guardianship certificates from district courts (Mental Health Act) and Local Level Committees (National Trust Act).
- Train branch staff to identify and process these certificates without unnecessary hurdles.
- Instruct branches to provide clear guidance to guardians/managers to prevent difficulties in account operations.
- Establish a process to seek legal advice when the validity of a certificate is in doubt.
Who it affects
All scheduled commercial banks (excluding RRBs), Branch managers and customer service staff, Disabled persons with autism, cerebral palsy, mental retardation, or multiple disabilities and their guardians/managers
Which authorities can issue guardianship certificates that banks must accept?
District courts or collectors under the Mental Health Act, 1987, and Local Level Committees under the National Trust Act, 1999.
Does this circular apply to all types of disabilities?
It specifically covers persons with mental illness (excluding mental retardation) under the Mental Health Act, and persons with autism, cerebral palsy, mental retardation, or multiple disabilities under the National Trust Act.
What should a bank do if it doubts the authenticity of a guardianship certificate?
The bank should obtain proper legal advice before proceeding with account opening or operation.