There are two possibilities in a bank account maintained by a customer viz. (i) a deposit account is opened in a bank with a valid nomination or with the survivorship clause like ‘either or survivor’, or ‘anyone or survivor’, or ‘former or survivor’ or ‘latter or survivor’ etc. (ii) A deposit account is opened in a bank without a valid nomination or without the survivorship clause like ‘either or survivor’, or ‘anyone or survivor’, or ‘former or survivor’ or ‘latter or survivor’ etc.
Banks in India are guided by RBI to set a framework for the settlement of claim amount where accounts are maintained by the bank without the survivor/nominee clauses. This is to avoid superfluous, undue hardship and inconvenience to the claimants. Accordingly, every bank in India has fixed a minimum threshold limit for the balance in the account of deceased depositors up to which claims of legal heirs can be settled without demanding any documents other than a letter of indemnity. As per RBI guidelines premature closure of the term deposit(s) is allowed in the event of the death of the depositor. Such premature closure of deposit would not attract any penal charges.
The deposit account proceeds may be settled to the claimants through a negotiable instrument (DD/Banker’s cheque) or transfer the claim proceds in the name of appropriate beneficiary on scrutiny of the following.
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