Death claim procedure in case of National Savings Certificates

The following post elucidates the claim procedure of NSCs where Nomination is registered or in the event of death of nominee of the deceased certificate holder, or when there is no nomination, interest payment clauses, and continuation of the certificate holder.

There are 3 types of saving certificates issued by the Postal Department. (1) A single holder type of certificate is issued to an adult for himself or on behalf of a minor or to a minor. (2) A Joint ‘A’ type Certificate is issued jointly to two adults payable to both the holders jointly or to the survivor. (3) A Joint ‘B’ type Certificate is issued jointly to two adults payable to either of the holders or to the survivor.   The claim process of NSCs on the death of NSC holders varies according to the type of the certificate and whether the nomination is registered or not.    A claim to the value of an NSC certificate standing in the name of a deceased holder may be made on the basis of (i) Nomination (ii) Legal evidence (iii) Without the production of legal evidence at the discretion of sanctioning authority up to the limit fixed by Min. of Finance. In this case, Claims relating to Savings Bank Accounts and Savings Certificates of deceased depositors shall be treated separately and the prescribed limit shall be applied separately for each account or purchase application.

NSC claim supported by Nomination Registered and in case of Joint account cases:

The post office is required to give precedence to the nominee over all other persons staking claims on the amount while settling deceased claims cases and such payment to the nominee absolves the post office from all future liability in respect of the deposit.

Note: If any legal heir preferred claim on the basis of a Succession Certificate, Probate of Will or Letter of Administration of the deceased estates issued by any court of law before sanctioning of claim in favour of nominee, claim shall be settled in favour of Succession Certificate/Probate of Will or Letter of Administration holder.

The nominee/s of the deceased holder of NSCs may take immediate payment of the value of the certificate or allow the certificate to continue in the name of the deceased holder; or if there is only one nominee, have a fresh certificate issued in his own name or if more than one nominee, sub-divide the certificate into a fresh certificate in appropriate denominations in favour of individual nominees or two adult nominees jointly. If there are more nominees than one, all the nominees shall give a joint discharge of the certificate at the time of receiving the payment or sub-division. If a minor is nominated as a beneficiary, an adult name has to be mentioned as they will be paid the benefits on behalf of the minor, wherein such appointed guardian/s shall give an undertaking stating “I/We shall receive the payment as trustee(s) of the minor nominee”.

The surviving nominee or nominees shall make an application (application form available at the post office) to the Postmaster of the office of registration, supported by death certificate/proof of death of the holder and of deceased nominee or nominees.  Related NSCs in respect of the claim and Identity proof of the claimant/s (Any of the following: PAN card/Voter card/Driving License/Passport/ Aadhar card/Nregra Job card, to be submitted. The same procedure is to be followed by the survived joint account holder where the certificate is issued in the joint names with survivor clause.

Claim procedure in the event of death of both nominee and certificate holder:

Where the sum due on a Savings Certificate is payable to two or more nominees and either or any of them dies, the sum shall be paid to the surviving nominees. Note that on the death of the last surviving nominee or the sole nominee, the claim in respect of the certificate will be settled in favour of the legal heir of the deceased nominee and not in favour of the heir of the deceased certificate holder.

NSC Claim without the support of Nomination:

If an NSC holder dies and there is no nomination in force at the time of his death, the claim from the legal heir/s settled on the basis of probate of his will or letters of administration of his estate or a succession certificate granted under the Indian Succession Act, 1925. However, in certain cases, at the discretion of the postal authority, if the claim does not exceed Rs.500000/-may be paid without a succession certificate/letter of probate.

NSC Claims not supported by legal evidence:

A claim application from a legal heir who prefers a claim without the production of legal evidence may be accepted at the discretion of sanctioning authority of the postal department up to the limit fixed by Min. As per SB order 36/2020 dated 06.11.2020, the revised sanction limits for without production of legal evidence applicable for various authorities are as under.

Sub –Postmasters of Lower selection grade post office limit up to Rs.50000/,

Sub-Post Masters of Higher selection grade (all non-gazetted ) SOs HPOs- limit up to Rs.100000/-, and

Higher authorities like Senior Post Master, Chief Post Master etc for the amount up to Rs. 5,00,000/-).

The order also said that the order will be applicable to all core banking services (CBS) and non-CBS post offices. The claimant/s for the amount above Rs. 5,00,000/- requires to obtain a succession certificate from a competent court of law or produce the probate of a will or Letters of Administration of Estate of the deceased.

In case of claim settlements without legal evidence relating to Savings Bank Accounts and Savings Certificates of deceased depositor shall be treated as separate and the prescribed limit shall be applied separately for each account or purchase application.  The claim application form in case of without production of evidence is the same form used for nomination is registered to be submitted along with (i) a Letter of indemnity signed by Claimant, sureties, Witnesses executed before     Notary Public, (ii) an Affidavit signed by all legal heirs including claimant and executed before Notary Public/ Oath Commissioner, (iii) a Letter of disclaimer on Affidavit signed by All legal heirs excluding claimant and executed before Notary Public/ Oath Commissioner.

Settlement of claim without nomination and the claim amount is above Rs.500000/-:

 If the claim exceeds the prescribed limit which is now Rs. 5,00,000/-, the claimant/s requires to obtain a succession certificate from a competent court of law or produce the probate of a will or Letters of Administration of Estate of the deceased. An application (application form available at the post office) to the Postmaster of the office of registration, supported by succession certificate from a competent court of law or produce the probate of a will or Letters of Administration of Estate of the deceased along with death certificate/proof of death of the holder and along with succession certificate/of deceased nominee or nominees along with original certificates of NSC and Identity proof of the claimant/s (Any of the following: PAN card/Voter card/Driving License/Passport/ Aadhar card/Nregra Job card).

Interest Payment on NSC death claim:

If a certificate is encashed under sub-rule (1) after the expiry of one year but before the expiry of three years from the date of the certificate, the encashment shall be at a discount. On encashment of the certificate, an amount equivalent to the face value of the certificate together with simple interest shall be payable. Such simple interest shall be calculated on the face value at the rate applicable from time to time to single accounts under the Post Office Savings Account Rules, 1981, for the complete months for which the certificate has been held. The difference between the aforesaid simple interest and the interest accruing under rule 15 shall be deemed to be a discount.

Interest Payment on encashment of certificate after the maturity date of the certificate:

Where the repayment of the amount, inclusive of interest has become due but has not been made, interest shall be allowed on the amount due from the date of maturity to the date of repayment of the amount at the rate applicable from time to time to savings accounts of the type of single or joint account. For the purpose of payment of interest, any part of the period which is less than one month shall be ignored.