guidelines/procedure to be followed upon the death of ...... obtaining of claim papers: of-9 is the...

ANDHRA PRAGATHI GRAMEENA BANK HEAD OFFICE: KADAPA

Circular No. 273-2008-BC-PDD Date: 29.12.2008

Guidelines/Procedure to be followed upon the death of depositor and on the settlement of claims in respect of deceased depositors

Consequent upon the amalgamation of erstwhile 3 RRBs namely Rayalaseema Grameena Bank, Sri Anantha Grameena Bank and Pinakini Grameena Bank and formation of Andhra Pragathi Grameena Bank, a necessity is felt to issue comprehensive guidelines/procedure to be followed upon the death of depositor and on the settlement of claims in respect of deceased depositors. The Reserve Bank of India has also issued instructions to the Regional Rural Banks to facilitate expeditious and hassle free settlement of claims on the death of a depositor. Based on the above, comprehensive guidelines have been prepared and placed before the Board and the Board has considered the same. The comprehensive guidelines/procedures are enclosed to the Circular and the branches/ECs/Offices are advised to follow the same scrupulously and ensure expeditious and hassle free settlement of claims of deceased depositor. Clarifications, if any, on this circular may be sought from Planning and Development Department, Head Office, Kadapa. (M. JAI PRAKASH) CHAIRMAN

Circular No.273-2008-BC-PDD, dated 29.12.2008

ANDHRA PRAGATHI GRAMEENA BANK HEAD OFFICE: KADAPA

PLANNING AND DEVELOPMENT DEPARTMENT COMPREHENSIVE GUIDELINES/PROCEDURE TO BE FOLLOWED UPON THE DEATH OF DEPOSITOR & ON THE SETTLEMENT OF CLAIMS IN RESPECT OF DECEASED DEPOSITORS CLAIMS FROM LEGAL REPRESENTATIVES TO THE ASSETS OF THE DECEASED

1) Consequences of Death regarding operations in the Account: When the confirmed

information regarding the death of a customer reaches the branch, the operations in

the individual account of the deceased customer must be stopped at once. No further

transactions shall be allowed in such accounts. If the account is in the name of a firm

and if one of the partners of the firm dies, operations in the account of that firm should

be stopped forthwith.. In case of joint account, the survivor/s may be allowed to operate

upon the account in conformity with the operation clause or repayment clause as

recorded in the account opening form. Term Deposits held jointly with the deceased

may be paid to survivor/s as per repayment clause on or after maturity only. If refund or

loans against such deposits before maturity is sought by surviving depositor/s, then the

consent of all legal heirs of the deceased depositor is necessary irrespective of the

repayment clause.

2) Nomination:

If there is a valid nomination, the branch need not follow the procedure for settlement of

claim detailed hereunder but pay the amount of deposit/s to the nominee after proper

identification, unless prevented by an order of competent court of law. For any payment

made as per valid nomination, Bank gets a good discharge and no suit or claim can be

filed or made against the Bank merely on the ground of payment of the claim amount to

the nominee. Since a claim of a nominee can be settled without any legal

complications, the Branch Manager should ensure that, as far as possible, nomination

is validly obtained and registered in respect of all deposit accounts.

3) When a customer dies, the Branch should, on its own, trace out the legal heirs and

send them a formal letter calling upon them to come to the branch for the early

settlement of the deposits/other assets held in the name of the deceased.

Contd…2


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4) In the case of a firm in which the deceased customer was a partner, after stopping

operation in the account, if the depositors approach with a representation for permitting

them to continue the operation in the account, operation can be permitted after

obtaining fresh Account opening form signed by all the surviving partners and all the

heirs of the deceased partner conferring fresh authority on any one or more of the

existing partners. If the firm has been reconstituted by the surviving partners and if the

reconstituted firm should solicit or seek assets of the old firm, a genuine consent letter

from all the heirs of the deceased partner must be obtained confirming such

reconstitution of the firm. The consent letter obtained shall be kept in the concerned

file. If, however, any legal heir, of the deceased partner is reluctant or is not prepared

to give such consent letter, the assets of .the firm after closing its liability in full shall be

paid to the surviving partners and all the legal heirs of the deceased partner

notwithstanding the reconstitution of the firm.

5) Disposal of assets:

a) Obtaining of claim papers: OF-9 is the form to be got filled up fully and

properly by the heirs of the deceased. The facts solicited must be obtained from the

parties without fail. The name of the parents of the deceased must invariably be

obtained regardless of whether they are living or not, but their ages shall be

ascertained and recorded in the form in case they are living. Similarly, names of

brothers and sisters etc. shall be solicited and furnished in the form. In the case of

grand children, names and ages of grand children by any predeceased child/children,

of the deceased need only be furnished. Further, the names and ages of the living

parents of such minor grand children may also be collected and furnished.

b) Appropriation of assets towards liabilities

i) Direct liabilities: After obtaining OF-9, the state of affairs of assets and liabilities of

the deceased customer must be ascertained at the branch/other branches with the help

of the heirs and Branch Books of Accounts. If there are any direct liabilities of the

deceased, such liabilities shall be closed in full by appropriating the balance available

in running accounts like Savings Bank Account of Current Account of the deceased.

So far as term deposits are concerned, it should be noted, that, such appropriation

Contd…3


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towards the dues shall be done only upon the maturity of the term deposit, in exercise

of the Bank‟s general lien unless such term deposits were offered as securities by the

deceased depositor or when the legal heirs give their consent in writing for premature

adjustment in which case appropriation can be made even before maturity following

strictly the rules regarding rate of interest for the refund of such deposits before

maturity. With genuine consent of the heirs of the deceased customer appropriation

before maturity can be made as aforesaid, even though the deposit is not a specific

security for the dues.

ii) Indirect Liabilities: If the deceased customer has indirect liabilities, claim must not be

disposed off until indirect liabilities are paid by the principal borrower or until branch

obtains substitute securities in the form of guarantee from any other person/persons and

whenever necessary with the prior approval of Competent Authority. Branches must not

attempt in the very first instance to appropriate the assets of the deceased customer for

indirect liabilities, but if all other attempts to get the liabilities cleared fail, assets of the

deceased should be appropriated as a last inevitable resort towards the indirect liabilities

to protect the interests of the Bank But, it must be distinctly noted here that, before such

appropriation, a Notice, informing the legal heirs about the intention of the Bank for such

adjustment exercising Bank‟s right of lien/set-off, shall be served on all the legal heirs. In

case the legal heirs raise any objection for such appropriation, the Branches shall refer

the matter to Head Office. In case it is not possible for any of the legal heirs to come

personally to receive the assets or to take delivery of the jewels of the deceased, they

may give consent letter and the branches may act upon the same provided there is no

doubt about the genuineness of such consent letter. The consent letters as stated supra

shall be kept attached to the stamped receipt/discharge of the person so authorised.

c) Disposal of claim:

1. Discharge: All payments of deposits or delivery of other assets to the heirs or

to the claimants after clearing the dues, if any, in full should be made against the joint

stamped receipt of the legal heirs/succession certificate holders and Executors of the

Will etc. and this receipt-discharge shall be attested by a person known to the Branch

Manager and capable of identifying the parities. If the parties are personally known to

Contd…4


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the Branch Manager, he himself may make an appropriate endorsement of such

receipts/discharges. Receipts/discharges need not be stamped if the value of assets

is Rs. 500/- or less.

i) In the case of a will:

If the customer has left behind him a Will, the branches shall after verifying the

original Will with the copy thereof, obtain consent letters from all the natural heirs,

minors amongst them being represented by their natural guardian to the effect that

Will of the deceased on which the Bank is required to act is the last and the genuine

Will which can be acted upon by the Bank. It is reiterated that, before acting upon

such a consent letter, the Branch should satisfy about its genuineness and it should

not be accepted as a routine. A true copy of the Will and the consent letter shall be

kept attached to the stamped receipt and discharged deposit receipts of the Executor

of the Will or the legatees as the case may be. If the Will is got probated by Executor

or Letters of Administration has been obtained by the Administrator from a competent

court of law having jurisdiction over the matter, branches shall recognize the title of

the Executor or Administrator after verifying the original probate or Letters of

Administration. In such cases, there is no necessity to obtain consent letters from the

legal heirs as stated above in this para. A true copy of the probate of the Will or the

Letters of Administration shall be kept attached to the stamped receipt or discharged

deposit receipt of the Executor or Administrator. It must be remembered that merely

because a Will is registered, it need not be authentic and genuine.

If there is no will, the natural heirs are to be paid. These natural heirs are the persons

shown in Annexure-I appended to the guidelines and the assets of the deceased

customers should be paid/delivered to them against their joint stamped

receipt/discharge.

ii) In the case of succession certificate:

If the succession certificate from a competent civil court of law having jurisdiction over

the matter (not the legal heir certificate issued by the Tahsildar or any other similar

authority) or a certificate issued by Administrator General is produced,

Contd…5


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branches shall recognize the title of the succession certificate holder or the holder of

the certificate issued by Administrator General as stated above, the assets of the

deceased shall be paid to such person/s against his/their stamped receipt or stamped

discharge. A true copy of the succession certificate or the certificate of the

Administrator General, after verifying the same with the original certificate shall be

kept attached to the stamped receipt/discharged deposit receipt. The branches need

not insist upon production of death certificate when any one of the certificates

referred to above is produced by the claimants.

Branches may not insist for production of succession certificate in all the cases. As

per RBI directive, the Banks may call for succession certificates from legal heirs of

deceased depositor in cases where there are disputes and legal heirs do not join in

indemnifying the Bank or certain other exceptional cases where the bank has a

reasonable doubt, about the genuineness of the claimant/s being the only legal heir/s

of the depositor.

iii) When there are minors amongst the heirs:

A minor is one who has not completed the age of 18 years. Whenever there are

minors amongst the heirs, they must be represented by their natural guardian. In the

case of all persons, the first natural guardian is the father. If the father is no more, or

is not capable of acting on account of being lunatic or insolvent then minor‟s mother is

the natural guardian in the case of Hindus, Christians etc, However, in the case of

Muslims after the father, the natural guardian is the paternal grand father i.e. father‟s

father. If there is no natural guardian branch must ascertain as to who is looking after

maintaining the minors and such person can be recognised as defacto guardian. But

to pay to the defacto guardian, letters must be obtained from him wherein he certifies

that it is he who is looking after and maintaining the minors. Third party Indemnity for

the full value of assets of the deceased customer should be obtained whenever

assets are paid/delivered to the defacto guardian. Such Indemnity shall be

adequately stamped. However, Indemnity may be dispensed with, if claimants agree

to deposit the shares of minors in deposit with defacto guardian until the respective

minors attain majority. Interest can be paid to the defacto guardian on such deposits

Contd…6


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as and when payable according to rules, if the branch is satisfied that he is

maintaining and looking after the minor. Branches shall note that the proceeds of the

deposits kept in the name of the minors should be paid to them only on their attaining

majority.

Further, neither loans shall be arranged against the security of the said deposit nor

the said deposit be refunded before maturity under any circumstances.

In the case of court guardian, the minority of the ward continues till he/she attains the

age of 21 years and the claim may be settled in favour of such guardian.

iv) Obtaining of Indemnity:

(a) If a deed of Indemnity has been insisted on in the terms of sanction,

it shall be obtained by the head of branch besides complying with all the other terms,

if any, laid down. A specimen of the Deed of indemnity to be obtained is furnished in

Annexure-II and it should be drafted on those lines depending upon the

circumstances of each case.

Note: It should be on a Non-Judicial Stamp Paper of the requisite value

depending upon the amount indemnified.

(b) Branches are permitted to dispose off the claim without obtaining

third party indemnity where there is absolutely no doubt regarding the title of legal

heirs/claimants to the assets of the deceased customers. If, however, head of

branch feels that in the interest of the bank such third party indemnity is necessary

it should be obtained without fail.

v) Payment of interest on term deposit:

Interest on Savings Bank Account balance and interest on fixed deposits,

Pragathi Cash Certificate etc., shall be paid to the claimant/s till the date of

settlement of the claim at the applicable rates. Further, the Fixed Deposits, & PCC

etc., can be refunded before maturity with applicable rate of interest but without

levying penalty of 1.00%.

If the Deposits are continued by making necessary endorsement, the periodical

interest accruing on such Deposits should be paid to the legal representatives of the

deceased as aforesaid against their joint stamped receipts and attested in the

manner stated elsewhere in this circular. If it is not convenient for the legal

Contd…7


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representative to execute joint stamped receipt periodically to claim the interest

amount, it shall be perfectly in order for the branches to open joint S.B. A/c. of the legal

representatives and credit the periodical interest to such account. Such an account

may be operated upon by one or any number of joint account holders as per authority

of all the account holders who must of course sign the account opening form, minors

amongst them being represented by their natural guardian.

vi) When any one of the heirs of the deceased dies before disposal of the

claim:

If any of the legal representatives to whom the assets of the deceased customer is

decided to be paid or delivered alone or jointly with others, dies, before the final

disposal of all the assets of the deceased customer, then branches shall obtain OF-9

form etc. from the legal representative of such deceased legal representative and then

ascertain to who all are the legal representatives of such legal representative of

deceased customer. The assets of the deceased customer shall thereafter be disposed

off as aforesaid in favour of the surviving legal representatives of the deceased

customer and legal representative of the legal representative of the deceased

customer. Claims in respect of these legal heirs may be disposed off in the same lines

as suggested above.

6) Sanctioning Powers:

Presently, the powers to be exercised by the various Authorities for settlement of

claims to the assets of the deceased customers are as follows:

Small Branch (Scale-I Branch) upto Rs.50,000/-

Medium Branch (Scale – II Branch) upto Rs.75,000/-

Large Branch (Scale-III Branch) upto Rs.1,50,000/-

Claims falling within the discretionary limits of the Branch Manager should be settled

within a week‟s time from the date of registration of the application. In case

claimant‟s failure to approach the Bank, Branches themselves must take the initiation

and ensure the prompt settlement of claims. Further, Irrespective of any claim amount

in the following circumstances / cases, Branches should forward the claim

forms to Head Office for settlement:

(a) If there is any difficulty in deciding any claim or any other legal issues are

involved.

Contd…8


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(b) If there are no legal heirs to claim in the 1st degree in case of Muslims and

Christians as per the Schedule.

(c) If any one or more of the claimant/s is/are a minor and that, there is no natural

guardian to represent the minor/s.

(d) If there are no persons to claim under „Class-I‟ to the deceased male Hindu, and

if there are no sons, daughter and wife of the deceased male Hindu, and if there

are no sons, daughter and husband of the deceased female Hindu.

(e) In case of complaints lodged against the claimants by 3rd persons requesting the

Bank to withhold the settlement.

(f) If the claimants produce „Will‟, and/or Succession Certificate, such claim

applications.

(g) All the claims involving assets of more than the Branch Manager‟s discretionary

powers should invariably be forwarded to Head Office.

7) Claim to the contents in the locker standing in the name of the deceased heirs:

In the case of lockers, on notice of death of the locker-hirers, no body shall be

permitted to open & operate unless the lockers hired jointly by more than one person

and the same is operated by either. A claim application shall be obtained as in the

case of claim to the deposits. On satisfaction about the genuineness of the claim and

after obtaining the permission from HO, PDD through their respective Regional Offices,

the locker shall be opened in the presence of a witness and in presence of the legal

heirs. For this purpose, the legal heirs may authorise one or more of them to be

present and to receive the contents of the lockers. The contents of the locker shall be

delivered to the legal heirs under their joint discharge in the presence of the witness.

Whenever it is felt that an indemnity must be obtained from the legal heirs, the contents

of the locker must be approximately valued and an indemnity bond obtained

accordingly for the said valuation as per procedure laid down in the case of depositors.

8) Maintenance of Register:

Branches shall maintain relevant claim register and it should be preserved

permanently.

Contd…9


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9) OTHER GUIDELINES:

i) Accounts with survivor/nominee clause

In the case of deposit accounts where the depositor had utilized the 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”), the payment of the balance in the deposit account

to the survivor(s)/nominee of a deceased deposit account holder represent a valid

discharge of the Bank‟s liability provided,

a) The bank has exercised due care and caution in establishing the identity of the

survivor(s) / nominee and the fact of death of the account holder, through

appropriate documentary evidence.

b) There is no order from the competent court restraining the bank from making

the payment form the account of the deceased and

c) It has been made clear to the survivor(s)/nominee that he would be receiving

the payment from the bank as a trustee of the legal heirs of the deceased

depositor, i.e., such payment to him shall not affect the right or claim which any

person may have against the survivor (s)/nominee to whom the payment is

made.

ii) Accounts without the survivor/nominee clause

In case where the deceased depositor had not made any nomination or for the

accounts other than those styled as “either or survivor” (such as single or jointly

operated accounts), the branches are advised to adopt a simplified procedure for

repayment to legal heir(s) of the depositor keeping in view the imperative need to avoid

inconvenience and undue hardship to the common person. In this context, the RBI

advised that the Banks may keeping in view their risk management systems, fix a

minimum threshold limit, for the balance in the account of the deceased depositors, up

to which claims in respect of the deceased depositors could be settled without insisting

on production of any documentation other than death certificate & a letter of indemnity.

Accordingly, the Branch Managers are empowered to settle the claims of the legal

heirs of the deceased depositor/s for the assets of the deceased depositor/s without

Contd..10


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insisting on production of any documents other than death certificate and a letter of

indemnity where the amount involved in the claim does not exceed Rs. 25000/-.

The Branches / Offices have to obtain the following documents to settle the claims of

the legal heirs of the deceased depositor/s on the assets of the deceased depositor/s

where the amount involved in the claim exceeds Rs 25000/-.

a. Death Certificate issued by village Sarpanch/VRO/Municipal Corporation Authorities.

b. Legal heir certificate issued by the Village Sarpanch/Tehsildar concerned.

c. A letter of indemnity of the requisite value from a third party well known to the Bank.

d. Succession certificates in case of disputes and doubts.

iii) Premature termination of Term Deposit Accounts

In case of term deposits, branches are advised to incorporate a clause in the account

opening form itself to the effect that in the event of the death of the depositor,

premature termination of term deposits would be allowed. The conditions subject to

which such premature withdrawal would be permitted may also be specified in the

account opening form. Such premature withdrawal would not attract any penal charge.

In case the LRs of the deceased depositor desire to continue the term deposits to avail

interest benefit, such request may be considered by making an endorsement on the

over side/reverse side of the deposit receipt to the effect that “ Consequent upon the

death of Sri………………………..the rights and interest in the deposit vest with the LRs

1 ……………2)………………3)………………….on maturity.

iv) Treatment of flows in the name of the deceased depositor

In order to avoid hardship to the survivor(s)/nominee of a deposit account, branches

are advised to obtain appropriate agreement/authorization from the survivor (s) /

nominee with regard to the treatment of pipeline flow (future credits to be received) in

the name of the deceased account holder. In this regard branches shall be authorized

by the survivor(s)/nominee of a deceased account holder to open an account styled as

“Estate of Shri……………… the Deceased‟ where all the pipeline flows in the name of

the deceased account holder could be allowed to be credited provided no withdrawals

are made.

Contd.11

Circular No.273-2008-BC-PDD, dated 29.12.2008 -11-

v) Access to the safe deposit lockers/safe custody articles

For dealing with the requests from the nominee/s) of the deceased locker-

heirs/depositors of the safe custody articles (where such a nomination had been made)

or by the survivor(s) of the deceased (where the locker/safe custody article was

accessible under the survivorship clause), for access to the contents of the locker/safe

custody article on the death of a locker hirer/depositor of the article, the branches are

advised to adopt generally the foregoing approach, mutatis mutandis, as indicated for

the deposit accounts.

vi) Time limit for settlement of claims

The Branches/Regional Offices/Head Office shall settle the claim in respect of

deceased depositors and release payments to survivor(s)/nominee(s) within a period

not exceeding 15 days from the date of receipt of the claim subject to the production

of proof of death of the depositor and suitable identification of proof of death of the

depositor and suitable identification of the claims, to the bank‟s satisfaction.

vii) Customer Guidance and publicity

The Branches shall give wide publicity and provide guidance to deposit account

holders on the benefits of the nomination facility and the survivorship clause

illustratively, it should be highlighted in the publicity material that in the event of the

death of one of the joint account holders, the right to the deposit proceeds does not

automatically devolve on the surviving joint deposit account holder, unless there is a

survivorship clause.

10. SETTLEMENT OF DECEASED DEPOSITORS ACCOUNTS WHERE NOMINATION

IS AVAILABELE.

A. ON THE DEATH OF DEPOSITOR:

i) On receipt of the information about the death of the depositor, the same shall be

confirmed by the Manager /Officer-in-charge by an independent enquiry.

ii) To note the death of the depositor in the deposit a/c ledger folio, the notice of death of

the depositor need not necessarily come in the written application form. But the source

of information should be authenticated & very reliable. Even personal knowledge of the

Branch staff / Manager/ Officer/-in-charge, is sufficient to record the same in the ledger

folio.

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B. CLAIMS TO DECEASED DEPOSIT ACCOUNTS:

i) When any person approaches the bank with a view to seek information/claim the

Deposit A/c of the deceased customer, the Manager /Officer-in-charge shall in the

first stage enquire the details of such-person (if not known).

ii) No information shall be furnished to any person, even to the person claiming

himself/herself as the nominee of the said deceased depositor unless all the

records necessary for settlement of the a/cs, are collected.

C. RECORDS TO BE COLLECTED FOR SETTLEMENT OF THE A/Cs

A written application from the nominee/ natural Guardian of the nominee duly

witnessed and containing the following details is to be collected by the branch.

a) Name & address of the nominee.

b) Details of the deceased depositor, date of death etc.,

c) Relation of the nominee with the deceased depositor

d) Details of the deposit a/c ( if known to the nominee)

i) prescribed proforma

ii) Identification of the nominee/ natural guardian of the nominee.

iii) Date of birth Certificate of a minor nominee.

D. IDENTIFICATION OF THE NOMINEE:

i. If the nominee has already a duly introduced deposit a/c with the same branch,

there is no need to insist for separate identification letter.

ii. In the absence of any deposit a/c, the identity of the nominee/ natural guardian of

the nominee shall be confirmed by any one of the below mentioned officials.

a) Member of the Parliament.

b) Member of the legislative Assembly/ Council.

c) Any person holding the responsible position not below the rank of a Gazetted

Officer, in Central Government/State Government or in the public sector

undertakings.

d) Village Sarpanch of the area in which the nominee normally resides or by the

Village Sarpanch of the villages which come under branch area of operation.

E. THE RIGHT OF THE NOMINEE:

As long as the depositor is alive, the nominee does not possess any right.

a) To claim the deposit amount.

Contd…13

Circular No.273-2008-BC-PDD, Dated 29.12.2008

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b) To avail loan on the security of the deposit a/c of the deceased customer.

c) To have the details of the A/c.

His / her right is purely contingent and gets validity only on the death of the depositor.

F. ARRANGING LDs TO THE NOMINEE BEFORE SETTLEMENT OF THE

DEPOSIT A/C:

In the event of the death of the depositor, before settlement of the a/c in favour of the

nominee, LD shall not be arranged on the security of such deceased depositors a/c; no

such deposit shall be accepted as a security for any of the transactions.

G. NO CLAIM ON THE DECEASED DEPOSITOR A/C:

i) After a reasonable time from the date of receipt of the notice of the death of the

depositor, if the nominee/ natural guardian of the nominee / claimant does not claim

the deposit:-

a) As a first step if possible and easily accessible, Br. Manager /Officer -in-charge

shall try to personally contact the above said persons and should apprise them of the

situation for early settlement of the account.

b) If the personal contact is not materialised / cannot be undertaken for any valid

reasons. Bank may inform the nominee /natural guardian of the nominee / claimant (to

his / her last known address as available in the branch ) of the receipt of notice of the

death of the depositor, under a certificate of positing at the cost of the Bank.

ii) The reasonable time for this purpose is 6 months from the date of receipt of the notice

of death of the depositor.

i) Natural Guardian means and includes only parent‟s given birth to a child : but

does not include step father, step mother, brothers/sisters / uncle / aunt etc.,

H. DEATH OF THE NOMINEE:

i) If the nominee deceases before the death of the depositor the a/c is to be treated as if

no nomination is available to the said deposit a/c, and settlement process shall be

undertaken as usual, the death claim settlement a/cs.

ii) If the nominee deceases, after the death of the depositor but before the settlement of

such deposit a/c, in that case the legal heirs of the nominee will be entitled for the

payment of the deceased depositor a/c, but not the legal heirs of the deceased

depositor. No such accounts are to be settled at branch level without seeking prior

permission from Head Office.

Contd…14


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I. DISPUTE BETWEEN NOMINEE & LEGAL HEIRS OF THE DECEASED

DEPOSITOR:

i) In terms of the Banking Companies (Nomination) Rules-1985, on the death of the

depositor, any payment due by the bank to the deceased depositor, if paid to the

nominee/ guardian of the nominee, it will be a valid discharge against all legal

heirs concerned with respect to such deposit a/cs.

ii) If the bank receives the claim of the legal heirs and the nominee simultaneously in

respect of the deposit, bank should take note of the legal heirs holding succession

certificate. However legal heirs should also be advised to bring the court injunction

restraining the Bank from effecting payment to the nominee.

J. VERIFICATION OF RECORDS & DISPOSAL OF CLAIMS:

i) On receipt of all the requisite records, Branch Manager/Officer-in-charge shall

verify them about their correctness / genuineness in the light of the particulars

available in the branch books of accounts.

ii) It shall also be ensured that the name of the claimant has been duly recorded

under the nomination Register against the said deposit a/c.

iii) Only having satisfied about the death of the depositor, identification of the

nominee /claimant, availability of the nomination for the particular a/c, the

deposit a/c of the deceased customer shall be settled.

iv) If the deceased depositor has any direct and /or indirect liability/ ies to the bank,

as a banker, the Bank has the privilege to exercise the right over the said

deceased customers deposit account/s. in preference over the rights of the

other claimants/ even over the right of the nominee.

v) Therefore, before settling the deceased „customer‟s Deposit a/c in favour of the

nominee / claimants, branches shall satisfy that the said deposit a/c is/ are free

from any General/ Special lien / encumbrances.

vi) In the event of any such lien/encumbrances, after setting off the a/cs of the

deceased customer, the surplus left over if any, shall be disposed off in favour of

the nominee/ claimants as narrated above.

Contd…15


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vii) If the nominee is also having any direct or/ and Indirect overdue liability/ies at the

time of settlement of the a/c, soon after setting the a/c in favour of the nominee, the

branches may exercise its/their lien over the said settled account till the dues to the

branch/es are cleared off by the nominee.

viii) If more than one deposit a/c are standing in the name of the deceased customer,

while settling the a/c, the branches shall confirm that each deposit a/c going to be

settled infavour of the nominee/ claimant, will have a separate nomination for that

particular deposit a/c. On the strength of availability of nomination to one a/c, claim

shall not be settled in favour of the nominee/claimant in respect of other deposit

accounts which does/do not have nominations.

ix) Only the deposit accounts, which are having nominations, shall be entertained at

branch level; remaining accounts though standing in the name of the same

deceased depositor shall not be settled in favour of the nominee at branch level.

x) If the nomination is available for the deposit a/cs, unless the same is

altered/cancelled specifically by the depositor, the same nomination holds good for

subsequent renewal/s of the said deposit account.

xi) As per the Nomination rules in force, nomination facility is available only in respect

of deposit a/cs opened in the individual capacity of a depositor; but not for the

deposit a/cs opened in the representative capacity as a trustee, head of the

organisations partner etc.

xii) At the time of setting the accounts, the duly discharged deposit

receipt/Certificate/Pass Book shall be collected from the Nominee / claimant.

xiii) At the branch level, only Manager /Regular-in-charge is authorised to settle the

deceased customer‟s accounts; but none else.

xiv) Before settlement claim of Nominee, a consent letter needs to be obtained from the

Nominee as per Annexure-III

K. NOMINEE /CLAIMANT IS WILLING TO CONTINUE THE DEPOSIT A/C WITH

THE BANK EVEN AFTER SETTLEMENT OF THE A/C.

i) Before the date of maturity:

a) If the nominee /claimant is willing to continue the deposit a/c with our Bank even

after the settlement of the deposit a/c, soon after completion of all the formalities

Contd…16


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of settlement like obtaining discharged Deposit Receipt/ Certificate/Pass book

Stamped Receipt from the nominee/claimant for having received the proceeds in full

satisfaction of all his/ her claims over the said deposit a/c, branches may insert the

name of the nominee/claimant in the existing deposit a/c by deleting the name of

the deceased depositor.

b) It is needless to say to authenticate the corrections in all the necessary forms/

receipts/registers.

c) On account of such insertions in the existing deposit a/c, if the deposit receipt/

certificate get defaced, after collecting the original receipt/ certificate from the

nominee/claimant, a fresh receipt /certificate may be issued without collecting any charges.

d) Payment of Interest: As the deposit a/c is continued in the name of the

nominee/claimant, no separate payment of interest arises. However, interest has to be paid

on the said a/c as usual at the half year endings/as per the terms of the contract.

ii) After the date of maturity:

a) Duly discharged receipt /certificate / pass book has to be collected from the

nominee / claimant in satisfaction of all his claims over the same. After settlement of

the a/c, a fresh a/c may be opened in the name of the nominee, as if a new a/c

taking consideration from the proceeds of the a/c settled.

b) In that case, the date of acceptance of the deposit will be the date of settlement;

but not the date of maturity.

12. NOMINEEE/CLAIMANT IS NOT WILLING TO CONTINUE THE DEPOSIT A/C

WITH THE BANK AFTER THE SETTLEMENT:

i) Before the date of maturity:

a) If the deposit a/c has to be settled before the date of maturity, all the conditions

as stipulated under the item No. 3 & 4 are to be fulfilled.

b) After collecting the duly discharged receipt/ certificate /pass book and the

stamped receipt for having received the amount in full satisfaction of his/her

claims over the deposit payment has to be effected to the nominee/ claimant by

prematurely closing the deposit a/c without applying the penalty clause.

ii) After the date of maturity: After fulfilling the conditions as narrated under item 3 & 4

and collecting duly discharged receipt/certificate, and the Stamped Receipt for having

received the proceeds in full satisfaction of all his / her claims over the deposit a/c, the

payment is to be effected.


Annexure – I

Verification of legal heirs

In the case of the claim to the assets deposits of a customer dying intestate i.e., without executing a will, correct legal heirs are to be identified as per the list enumerated below. A. LEGAL HEIRS TO HINDU MALE:

a) FIRST CLASS: Son, Daughter (Married Daughter also) Widow; Mother, Children of pre-deceased son or daughter; widow of the predeceased son; Son of predeceased son of a predeceased son; Daughter of a predeceased son of a predeceased son; widow of predeceased son of a predeceased son. b) SECOND CLASS: Father. c) THIRD CLASS: Son‟s daughter‟s son; Son‟s daughter‟s daughter; Brother; Sister. d) FOURTH CLASS: Daughter‟s son‟s son; Daughter‟s son‟s daughter; Daughter‟s daughter‟s son; Daughter‟s daughter‟s daughter. e) FIFTH CLASS: Brother‟s son; Sister‟s son; Brother‟s daughter; Sister‟s daughter. f) SIXTH CLASS: Father‟s father; Father‟s mother. g) SEVENTH CLASS: Brother‟s widow. h) EIGHTH CLASS: Father‟s Brother; Father‟s Sister. i) NINTH CLASS: Mother‟s Father; Mother‟s Mother. j) LAST CLASS: Mother‟s Brother; Mother‟s Sister. B. LEGAL HEIRS TO HINDU FEMALE

a) FIRST CLASS: Sons and Daughters; Children of predeceased son & Daughter; Husband. b) SECOND CLASS: Heirs of the Husband. c) THIRD CLASS: Mother & Father. d) FOURTH CLASS: Heirs of the Father. e) LAST CLASS: Heirs of the Mother.

Contd…2


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C) LEGAL HEIRS TO CHRISTIAN MALE OR FEMALE: a) FIRST CLASS: Widow & Widower; Children; Children of predeceased Son & Daughter. b) SECOND CLASS: Father. c) THIRD CLASS: Mother; Brother; Sisters; Children of predeceased Sister & Brother. D) LEGAL HEIRS TO MUSLIM MALE OR FEMALE: a) FIRST CLASS: Parents; widow; widower; Children; Children of predeceased son &

Daughter.

(Children of predeceased son or Daughter will come into picture only when there are no

living Children to the deceased).

b) SECOND CLASS: Brothers and Sisters. The persons mentioned in First Class shall be preferred to those in any succeeding entry

and in case the persons mentioned in First Class are not alive. Then the persons

mentioned in Second Class shall be preferred and so on. For example, let us assume that

a Hindu male is survived by a widow, a Son, a Daughter, Father and Sister. In this case

the assets of the deceased shall be paid t his widow and two children. If none of them are

alive then the amount shall be paid to his Father and if Father is also not alive, the amount

may be paid to his Sister.


ANNEXURE -II

DEED OF INDEMNITY

The Deed of Indemnity is made and executed by .......................................................(full name and complete address of the Indemnifier).................................................................hereinafter called the “indemnifier” one part in favour of ANDHRA PRAGATHI GRAMEENA BANK, a Bank constituted and functioning under the Regional Rural Banks Act 1976 with its Head Office situated at KADAPA of Andhra Pradesh State with branches at various places amongst others at *...............................................hereinafter called the “Bank' of the other part. The expressions the “Indemnifier” and the “Bank” where the context so admits shall mean and include their heirs, legal representatives, successors-in-interest, executors, administrators and assignees.

WHEREAS Shri /Smt. @......................................................................was a customer of the Bank at its *......................................... Branch till his / her death on .......................and WHEREAS the aforesaid Shri / Smt. @...............................................died intestate / testate leaving behind him /her, 2........................................as heirs / legatees according to the law governing his / her will dated ....................... and

WHEREAS the aforesaid Shri / Smt. @........................................had 3 ......................in the Bank at its*..............................................Branch.

WHEREAS the heirs / legatees of the deceased mentioned above have now claimed amounts / jewels and though the Bank in the ordinary course insists on formal proof of title of the heirs / legatees, the Bank in this case agreed to 4.................................by their natural guardian 5.....................................provided the bank is given Indemnity as is hereafter contained in case there shall hereafter be a claim against the Bank from any other person or persons whomsoever in respect of the said amount / jewels or any portion thereof.

NOW THEREFORE THIS DEED IS EXECUTED AND WITNESSED AS FOLLOWS:

1. That in pursuance of the aforesaid agreement and in consideration of the Bank paying the amount / delivering the jewels to the aforesaid heirs / legatees of the deceased in the manner stated above, the Indemnifier hereby agree with the Bank

that he / she shall at all times Indemnify and keep identified and harmless the Bank from any claims and demands made by and all actions and proceedings taken against the Bank by any person or persons whomsoever in respect of the said amount / jewels or any part thereof and also against all expenses, losses or damages which may be incurred or suffered by the Bank in relation thereto.

Contd.2


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2. The Indemnifier and the Bank hereby mutually agree that the liability of the Indemnifier shall not at any time exceed the sum of Rs. ..........................

In witness whereof the Indemnifier have signed this deed on this the ......................................day of .............................................................. at ............................................

Witnessed by :

Signature : ...................................

Name : INDEMNIFIER

Occupation, full address :

*Name of the Branch

@ Name of the Deceased

1.Date of Birth

2.Names of the legal heirs

3. Full particulars of assets

4. “Pay the amount / deliver the jewels” etc.

5. Father / Mother etc.


ANNEXURE – III

CONSENT LETTER

The Manager, Andhra Pragathi Grameena Bank ………………………………….. branch Dear Sir, Sub: Claim to Assets/ Deposits of late Sri/ Smt……………………………………..… deceased. I regret to inform you that Sri/Smt …………..…………………………………who was a customer of your branch expired on …………… leaving behind his/her mother/widow/son/daughter/others (relationship to the deceased) as his/her heirs. I am the …………………….…………… (relationship) of the deceased named above. As you are aware the deceased is having a deposit account No………………. JL account No………..…..(full particulars of the assets may be mentioned) with. It is not possible for me to come to the branch and receive the assets of the deceased named above lying with you. Therefore, I request you to deliver the pledged jewels lying in JL account and pay the balance lying in credit to the Deposit account No………..to Sri/Smt….……………………………… I confirm that I shall not claim any title, right or interest in respect of the assets of the deceased lying with you. I hereby authorize you to act upon this letter and agree to meet all the consequences of your action on this letter. Thanking you, Yours faithfully, Note: 1. The consent letter shall be attested by responsible person who is capable of identifying the party or it may be attested by a Gazetted Officer. 2. The natural guardian shall sign for self and also as guardian of the minor heirs of the deceased.

guidelines/procedure to be followed upon the death of ...... obtaining of claim papers: of-9 is the...

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