Where a depositor has made use of nomination facility and made a valid nomination or where the account was opened with the survivorship clause (either or survivor, or anyone or survivor or former or survivor or latter or survivor) payment of the balance in the deposit account to the survivor(s)/ nominee of a deceased deposit account holder represents a valid discharge only if :
- The bank has exercised due care and concern in establishing identity of survivor/ nominee and death of account holder (through documentary evidence)
- There is no court order preventive the bank from making the payment
- It is made clear to the survivor(s) that he would be receiving payment as a trustee of the legal heirs of the deceased depositor
- The RBI has stated that in these cases insistence on production of legal representation is superfluous and unwarranted. Banks should not ask for succession certificates, letter of administration or probate. Banks should not seek to obtain any bond or indemnity
- Where the deceased depositor has not made any nomination or the account does not have a survivor clause banks are expected to follow a simplified procedure for repayment to the legal heirs without making inconvenience to them.
- Deceased depositors might receive money in their name. To avoid hardships banks must either open an account styled “Estate of Shri............ (The Deceased)” where all amounts received are deposited or the survivor/ nominee can permit the bank to return the money received with the remark “Account holder deceased”. The survivor/ nominee can then approach the remitter to effect payment to them.
- Banks must settle claims and release payment within 15 days from receiving claim along with documents such as proof of death of depositor.