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Procedure for Transmission of Shares

Procedure for transmission of shares to all demat account holders whose legal heirs are settled abroad / US citizens.

What should one do to ensure smooth transmission of shares from the deceased account holders demat account?


Customers need to ensure that nomination is there in their demat accounts. Nomination is currently mandatory for all HNI customers. The same is strictly advised by the Bank at the time of Demat account opening.

 

The customer should ensure that the nominee / legal heir has a demat account. If the legal heir has a demat account with us they should keep the same active as per all regulations.

What should the nominee do if he/she does not have a demat account?


In case the nominee is an NRI, the nominee/heirs would require opening a Non-PINS- Non-repatriable demat account.

 

Please find enclosed the details of KYC requirement a NRI needs for opening a 3-in-1 (Trading-Bank-Demat a/c) demat account with our bank and for applying PAN card.

Transmission of Shares (where nomination is in place)

 

KYC documents    Guidelines for PAN

What are the formalities that are required to be completed in addition to the above?


The nominee shall request the Depository Participant (DP) in writing along with a certified true copy of the death certificate (or a duplicate copy of the death certificate if original lost or misplaced) issued by the competent authority to transmit the securities covered by the nomination to the account of the Nominee, held with any Depository.

What are the options available to the legal heir (NRIs / US citizen) for liquidation/sale of the shares/securities once the transfer has been affected?


Once the shares are transmitted to the NRI account (Non-PINS-Non-repatriable) of the legal heir, he can liquidate these shares in the secondary market without PINS/ RBI permission. PINS approval is not required for selling inherited shares. PINS approval will be required only for transaction in secondary market.

 

(The guidelines in FEMA states that NRI can hold, own, transfer security, if such security was acquired , held or owned by such person when he was resident in India or inherited from a person who was resident in India. Therefore NRI does not require RBI permission to hold and transfer of shares , acquired by inheritance through transmission of shares.)

How can the proceeds from sale of shares / securities be transferred or repatriated abroad?


Since in the instant case the shares will be held on non-repatriable basis, the sale proceeds of such shares will get credited into NRO bank account. Further as per the FEMA (Remittance of Assets) Regulation, 2000, NRI can remit an amount, not exceeding US $ 1 million per financial year out of the balances held in NRO accounts/ sale proceeds of assets/the assets in India acquired by him by way of inheritance/ legacy on production of documentary evidence in support of acquisition inheritance or legacy of assets. Also, for remitting any higher amount than permissible, application to RBI is required to be made along with other documentary proofs & other requirements as specified in the said regulation.

 

Guidelines to nominees / legal heir if the above process is not followed

What should the nominee do if he/she does not have a demat account?


If the nomination is not in place, and in case of death of the account holder the legal heir is encouraged to open an account with us after completion of the necessary formality.

 

Please find enclosed the details of KYC requirement a NRI needs for opening a 3-in-1 (Trading-Bank-Demat a/c) demat account with our bank and for applying PAN card.

 

KYC documents   Guidelines for PAN

 

Transmission of Shares (where there is no nomination in place):

What should one do if there is no nomination in the deceased account holders demat account?


The legal heir's or the legal representative's of such securities shall make an application to the Depository Participant (DP) to transmit the shares lying in the account of the deceased to the account of the legal heir’s or legal representatives.

What documents are required by the legal heirs while making such an application to the DP?


The legal heir's or the legal representative's of such securities shall make an application to the DP in the specified Transmission form along with the following documents,

 

i) A copy of the death certificate duly notarised.

ii) A copy of the Succession certificate duly notarised or an order of a court of competent jurisdiction where the deceased has not left a Will;

OR

iii) A copy of the Probate or Letter of Administration duly notarised.

 

Transmission Form

What if the legal heir's or legal representative is unable to produce any/some of the documents mentioned above? Are there any alternate documents that can be submitted?


If the legal heir's or the legal representative's express inability to produce either of the documents mentioned under (ii) and (iii) above, and the market value of the securities held in each of the account of the deceased as on the date of application for transmission does not exceed Rs. 1, 00,000/- then the DP shall process the transmission request on the basis of the following documents:

 

i) Request for transmission in specified Transmission Form

ii) Copy of the death certificate duly notarised

iii) Letter of Indemnity duly supported by a guarantee of an independent Surety acceptable to the Participant, made on appropriate non judicial stamp paper

iv) Affidavit made on an appropriate non judicial stamp paper

AND

v) No Objection Certificate(s) from all legal heirs who do not object to such transmission.

What will the Depository Participant do on receipt of the above documents?


The Depository Participant shall ensure that the documents submitted by the legal heir's or the legal representative's are in order and shall then effect a transfer of the balances to the Client account of the legal heir's or the legal representative(s). After effecting the transmission, the DP shall close the account of the deceased.

 

The guidelines on process of liquidation of securities in the secondary market & repatriation of sale proceeds of such shares are same that are mentioned above.