ANNEXURE
POLICY
ON BANK DEPOSITS
One of the important
functions of the Bank is to accept deposits from the public for the purpose of
lending. In fact, depositors are the
major stakeholders of the Banking System.
The depositors and their interests form the key area of the regulatory
framework for banking in India and this has been enshrined in the Banking
Regulation Act, 1949. The Reserve Bank
of India is empowered to issue directives/ advices on interest rates on
deposits and other aspects regarding conduct of deposit accounts from time to
time. With liberalization in the financial system and deregulation of interest
rates, banks are now free to formulate deposit products within the broad
guidelines issued by RBI.
This policy document on
deposits outlines the guiding principles in respect of formulation of various
deposit products offered by the Bank and terms and conditions governing the
conduct of the account. The document
recognises the rights of depositors and aims at dissemination of information
with regard to various aspects of acceptance of deposits from the members of
the public, conduct and operations of various deposits accounts, payment of
interest on various deposit accounts, closure of deposit accounts, method of
disposal of deposits of deceased depositors, etc., for the benefit of
customers. It is expected that this
document will impart greater transparency in dealing with the individual
customers and create awareness among customers of their rights. The ultimate
objective is that the customer will get services they are rightfully entitled
to receive without demand.
While adopting this policy,
the bank reiterates its commitments to individual customers outlined in
Bankers’ Fair Practice Code of Indian Banks’ Association. This document is a
broad framework under which the rights of common depositors are recognized.
Detailed operational instructions on various deposit schemes and related
services will be issued from time to time
The
deposit products can be categorised broadly into the following types. Definitions
of major deposits schemes are as under:
A. “Demand deposits” means a deposit received by the
Bank which is withdrawable on demand;
B. “Savings deposits” means a form of demand deposit
which is subject to restrictions as to the number of withdrawals as also the
amounts of withdrawals permitted by the Bank during any specified period;
C. “Term deposit” means a deposit received by the Bank
for a fixed period withdrawable only after the expiry of the fixed period and
include deposits such as Recurring / Fixed Deposits etc.
D. “Current Account” means a form of demand deposit
wherefrom withdrawals are allowed any number of times depending upon the
balance in the account or up to a particular agreed amount and will also
include other deposit accounts which are neither Savings Deposit nor Term
Deposit;
2. Key Features on operation of
different types of accounts
A. Account Opening and Operation of Deposit Accounts
a. The Bank before opening any deposit account will
carry out due diligence as required under “Know Your Customer” (KYC) guidelines
issued by RBI and or such other norms or procedures adopted by the Bank. If the
decision to open an account of a prospective depositor requires clearance at a
higher level, reasons for any delay in opening of the account will be informed
to the customer and the final decision of the Bank will be conveyed at the
earliest to the customer.
b. The account opening forms and other material would be
provided to the prospective depositor by the Bank. The same will contain
details of information to be furnished and documents to be produced for
verification and or for record, it is expected of the Bank official opening the
account, to explain the procedural formalities and provide necessary
clarifications sought by the prospective depositor when he approaches for
opening a deposit account.
c. For deposit products like Savings Bank Account and
Current Deposit Account, the Bank will normally stipulate certain minimum balances
to be maintained as part of terms and conditions governing operation of such
accounts. Failure to maintain minimum
balance in the account will attract levy of charges as specified by the Bank
from time to time. For Saving Bank
Account, the Bank may also place restrictions on number of transactions, cash
withdrawals, etc., for given period.
Similarly, the Bank may specify charges for issue of cheques books,
additional statement of accounts, duplicate passbook, folio charges, etc. All
such details, regarding terms and conditions for operation of the accounts and
schedule of charges for various services provided will be communicated to the
prospective depositor while opening the account or from time to time as the
case may be.
d. Savings Bank Accounts can be opened for eligible
person/ persons and certain organizations/ agencies (as advised by Reserve Bank
of India (RBI) from time to time)
e. Current Accounts can be opened by individuals/
partnership firms/ Private and Public Limited Companies/ HUFs/ Specified
Associates/ Societies/ Trusts etc.
f.
Term Deposits Accounts
can be opened by individuals/ partnership firms/ Private and Public Limited
Companies/ HUFs/ Specified Associates/ Societies/ Trusts etc.
g. The due diligence process, while opening a deposit
account will involve satisfying about the identity of the person, verification
of address, satisfying about his occupation and source of income. Obtaining
introduction of the prospective depositor from a person acceptable to the Bank
and obtaining recent photograph of the person/s opening/ operating the account
are part of due diligence process.
h. In addition to the due diligence requirements, under
KYC norms the Bank is required by law to obtain Permanent Account Number (PAN)
or General Index Register (GIR) Number or alternatively declaration in Form No.
60 or 61 as specified under the Income Tax Act/ Rules.
i.
Deposit accounts can be
opened by an individual in his own name (status: known as account in single
name) or by more than one individual in their own names (status: known as Joint
Account). Savings Bank Account can also be opened by a minor jointly with
natural guardian or with mother as the guardian (Status: known as Minor’s
Account). Minors above the age of 10
will also be allowed to open and operate saving bank account independently.
j.
Operation of Joint
Account: The Joint Account opened by more than one individual can be operated
by single individual or by more than one individual jointly. The mandate for
operating the account can be modified with the consent of all account holders.
The Savings Bank Account opened by minor jointly with natural guardian/
guardian can be operated by natural guardian only till the minor attains
majority.
k. The joint account holders can give any of the
following mandates for the disposal of balance in the above accounts:
a) Either or Survivor: If the account is held by two
individuals say, A & B, the final balance alongwith interest, if
applicable, will be paid to survivor on death of anyone of the account holders.
b) Anyone or Survivor/s: If the account is held by more
than two individuals say, A, B and C, the final balance alongwith interest,
if applicable, will be paid to the survivor on death of any two account holders.
The above mandates will be applicable to or become operational
during the tenure of the term deposit and on or after the date of maturity of
term deposits. This mandate can be modified by the consent of all the account
holders.
m.
The term deposit account holders at the time of placing their
deposits can give instructions with regard to closure of deposit account or
renewal of deposit for further period on the date of maturity. In absence
of such mandate, the Bank will seek instructions from the depositor/s as to
the disposal of the deposit by sending intimation once before 15 days of the
maturity date of term deposit by post or courier at the last known address
of the depositor.
o.
Bank recommends that all depositors avail nomination
facility. The nominee, in the event of death of the depositor/s, would receive
the balance outstanding in the account as a trustee of legal heirs. The
depositor will be informed of the advantages of the nomination facility while
opening a deposit account.
p. A statement of account will be provided by the Bank
to Savings Bank as well as Current Deposit Account Holders periodically as per
terms and conditions of opening of the account.
q. The deposit accounts may be transferred to any other
branch of the Bank at the request of the depositor.
a. The minor can open Savings Bank Account and the same
can be operated by the natural guardian or by minor himself/ herself, if he/
she is above the age of 10 years. The account can also be opened jointly.
b. On attaining majority, the erstwhile minor should
confirm the balance in his/ her account and if the account is operated by the
natural guardian/ guardian, fresh specimen signature of erstwhile minor duly
verified by the natural guardian would be obtained and kept on record for all
operational purposes.
The
Bank may at its discretion open deposit accounts other than Current Accounts of
illiterate person. The account of such person may be opened provided he/ she
calls on the Bank personally along with a witness who is known to both the
depositor and the Bank. Normally, no cheque-book facility is provided for such Savings
Bank Account. At the time of withdrawal/ repayment of deposit amount and/ or
interest, the account holder should affix his/ her thumb impression or mark in
the presence of the authorized officer who should verify the identity of the
person. The Bank will explain the need for proper care and safe keeping of the
passbook etc. given to the account holder. The Bank official shall explain the
terms and conditions governing the account to the illiterate/ blind person.
The
bank may at the request of all the joint account holders allow addition or
deletion of name/s of joint account holder/s if the circumstances so warrant or
allow an individual depositor to add the name of another person as a joint
account holder.
E.
Dormant Accounts
Accounts
which are not operated for a considerable period of time will be transferred to
a separate dormant/ inoperative account status in the interest of the depositor
as well as the Bank. The depositor will be informed of charges, if any, which
the Bank will levy on dormant/ inoperative accounts. The depositor can request
the Bank to activate the account for operating it.
3. Directives on interest payment
and term deposits
A. Interest Payments
a. Interest shall be paid on saving account at the rate
specified by Reserve Bank of India directive from time to time. However, term
deposit interest rates are decided by the Bank within the general guidelines
issued by the Reserve Bank of India from time to time.
b. The rate of interest on deposits will be prominently
displayed in the branch premises. Changes, if any, with regard to the deposit
schemes and other related services shall also be communicated upfront by
prominently displaying it at branch premises
and on the website.
c. The Bank has statutory obligation to deduct tax at
source if the total interest paid/ payable on all term deposits held by a
person exceeds the amount specified under the Income Tax Act. The Bank will
issue a tax deduction certificate (TDS Certificate) for the amount of tax
deducted. The depositor, if entitled to exemption from TDS can submit
declaration in the prescribed format at the beginning of every financial year.
The
Bank on request from the depositor, at its discretion may allow withdrawal of
term deposit before completion of the period of the deposit agreed upon at the
time of placing the deposit. The Bank shall declare their penal interest rates
policy for premature withdrawal of term deposit. The Bank shall make depositors
aware of the applicable rate along with the deposit rate.
Incase
the depositor desires to renew the deposit by seeking premature closure of an
existing term deposit account, the bank will permit the renewal at the
applicable rate on the date of renewal, provided the deposit is renewed for a
period longer than the balance period of the original deposit. While
prematurely closing a deposit for the purpose of renewal, interest on the deposit
for the period it has remained with the bank will be paid at the rate
applicable to the period for which the deposit remained with the bank and not
at the contracted rate.
When a term deposit is renewed on maturity, on
renewed deposit interest rate for the period specified by the depositor as
applicable on the date of maturity would be applied. If request for renewal is received after the date of maturity,
such overdue deposits will be renewed with effect from the date of maturity at
interest rate applicable as on the due date, provided such request is received
within 30 days from the date of maturity. In respect of overdue deposits
renewed after 30 days from the date of maturity, no value dating will be permitted.
The
Bank may consider request of the depositor/s for loan/ overdraft facility
against term deposits duly discharged by the depositor/s on execution of
necessary security documents. The Bank may also consider loan against deposit
standing in the name of minor, however, a suitable declaration stating that
loan is for the benefit of the minor, is to be furnished by the depositor -
applicant.
4. Deceased account handling
a. If the depositor has registered nomination with the
Bank, the balance outstanding in the account of the deceased depositor will be
transferred to the account of/ paid to the nominee after the Bank satisfies
about the identity of the nominee, etc.
b. The above procedure will be followed even in respect
of a joint account where nomination is registered with the Bank.
c. In a joint deposit account, when one of the joint
account holders dies, the Bank is required to make payment jointly to the legal
heirs of the deceased person and the surviving depositor(s). However, if the
joint account holders had given mandate for disposal of the balance in the
account in the forms such as “either or survivor, former/ latter or survivor,
anyone of survivors or survivor; etc., the payment will be made as per the
mandate to avoid delays in production of legal papers by the heirs of the
deceased.
d. In the absence of nomination and when there are no
disputes among the claimants, the Bank will pay the amount outstanding in the
account of deceased person against joint application and indemnity by all legal
heirs or the person mandated by the legal heirs to receive the payment on their
behalf without insisting on legal documents up to the limit approved by the
bank’s management. This is to ensure that the common depositors are not put to
hardship on account of delays in completing legal formalities
a. In the event of death of the depositor before the
date of maturity of deposit and amount of the deposit is claimed after the date
of maturity, the Bank shall pay interest at the contracted rate till the date
of maturity. From the date of maturity to the date of payment, the Bank shall
pay simple interest at the applicable rate obtaining on the date of maturity,
for the period for which the deposit remained with the Bank beyond the date of
maturity; as per the Bank’s policy in this regard.
b. However, in the case of death of the depositor after
the date of maturity of the deposit, the bank shall pay interest at savings
deposit rate obtaining on the date of maturity from the date of maturity till
the date of payment.
5. Facilitation of Other Banking
Services
A. Stop Payment Facility
The
Bank will accept stop payment instruction from the depositors in respect of
cheques issued by them. Charges, as specified, will be recovered.
B. Safe Deposit Lockers
This
facility is not offered through all bank branches and wherever the facility is
offered, allotment of safe deposit vault will be subject to availability and
compliance with other terms and conditions attached to the service. Safe
deposit lockers may be hired by an individual (being not a minor) singly or
jointly with another individual(s), HUFs, firms, limited companies, associates,
societies, trusts etc. Nomination facility is available to individual(s)
holding the lockers singly or jointly. In respect of lockers held in joint
names, up to two nominees can be appointed. Joint locker holders can give
mandate for access to the lockers in the event of death of one of the holders
on the lines similar to those for deposit accounts. In the absence of
nomination or mandate for disposal of contents of lockers, with a view to avoid
hardship to common persons, the bank will release the contents of locker to the
legal heirs against indemnity on the lines as applicable to deposit accounts
6.
Safeguarding Customer Interests
B.
Secrecy of Customer’s Accounts
The
Bank shall not disclose details/ particulars of the customer’s account to a
third person or party without the expressed or implied consent from the
customer. However, there are some exceptions, viz. disclosure of information
under compulsion of law, where there is a duty to public to disclose and where
interest of the Bank requires disclosure.
C. Insurance Cover for Deposits
D. Redressal of Complaints and Grievances
Depositors
having any complaint/ grievance with regard to services rendered by the Bank has
a right to approach authority(ies) designated by the Bank for handling customer
complaint/ grievances. The details of the internal set up for redressal of
complaints/ grievances will be displayed in the branch premises. The branch
officials shall provide all required information regarding procedure for
lodging the complaint. In case the depositor does not get response from the
Bank within 60 days one month from date of complaint or he is
not satisfied with the response received from the Bank, he has a right to
approach Banking Ombudsman appointed by the Reserve Bank of India.
7. Policy Revision
This
policy is subject to revision based on the extant RBI guideline from time to
time.