Claims settlement of deceased depositors in case of joint accounts

Source: The Hitavada      Date: 15 May 2017 10:21:23


By Sudhakar Atre,

THE prudent readers of The Hitavada profusely welcomed the article, ‘Model operational procedure for settlement of claims of deceased depositors’ published in The Cityline of The Hitavada on May 8 and suggested to clarify the procedure to be followed in case of death of depositors of joint accounts with banks. In this regard it will be pertinent to note that in order to minimise the hardship to survivors and standardise the procedures, Indian Bank Association has published ‘Model operational procedure for settlement of claims of deceased depositors April 2014’ on its website which can be summarised as under:


In case of joint account with mandate ‘either or survivor/former or survivor/anyone or survivors/latter or survivor’ with or without nomination:


1. Savings account/current account with nomination: a) In the event of death of one (or more but not all) of the depositors, the balance outstanding will be paid to survivors on verification of proof of death of the depositor. b) In the event of death of both/all the joint depositors, the balance outstanding will be paid to the nominee on verification of his/her identity (such as election ID card, PAN card, passport etc) and proof of death of depositors.


Savings account/current account without nomination: a) In the event of death of one (or more but not all) of the depositors, the balance outstanding will be paid to survivor on verification of proof of death of the depositor. b) In the event of death of both/all the joint depositors, the balance outstanding will be paid jointly to the legal heirs (or any one of them as mandated by all the legal heirs) on verification of authority of legal heirs and proof of death of depositors.

2. Term deposit account:


With nomination: a) In the event of death of one (or more but not all) of the depositors, the balance outstanding will be paid to survivors on verification of proof of death of the depositors on maturity of deposit or as agreed at the time of opening of deposit. b) In the event of death of all joint depositors, the balance outstanding will be paid to the nominee on verification of his/her identity (such as Election ID card, PAN card, Passport etc) and proof of death of depositors on maturity of deposit or as agreed at the time of opening of deposit.

Without nomination: a) In the event of death of one of the depositors (or more, but not all), the balance outstanding will be paid to the survivors on verification of proof of death of the depositor on maturity of deposit or as agreed at the time of opening of deposit. b) In the event of death of all joint depositors, the balance outstanding will be paid to the legal heirs of all the deceased depositors (or any one of them as mandated by all the legal heirs of joint holders) on verification of authority of legal heirs and proof of death of depositors on maturity of deposit.


3. Premature termination of term deposit account: With Nomination: a) In the event of death of one (or more but not all) of the depositors, the survivors will have the right to seek premature termination of term deposit account as per the terms of contract on verification of proof of death of the depositor.
b) In the event of death of all the joint depositors, the nominee will have right to seek premature termination of term deposit account as per the terms of the contract on verification of his/her identity (such as election ID card, PAN card, passport etc.) and proof of death of depositors.
Without Nomination: a) In the event of death of one (or more but not all) of the depositors premature termination will be allowed against request from surviving depositors as per the terms of the contract on verification of the proof of the death of the depositor. b) In the event of death of all joint depositors, premature termination will be permitted against joint request by all legal heirs of the deceased depositors (or any one of them as mandated by all the legal heirs) as per the terms of contract on verification of authority of legal heirs and proof of death of depositors.


4. HUF Accounts – Death of Karta: a) In the event of death of a Karta, HUF account may be settled as under: a) Obtaining affidavit cum indemnity from surviving members and legal heirs with two guarantors confirming their acceptance to one of the members as a new Karta. Banks shall allow the new Karta to continue to operate the existing account on the basis of such documents, in HUF accounts having small balances (small balance to be decided by each bank). b) Similar procedure to be followed in cases account is to be closed and balance in account to be paid to the new Karta.

(The author is a freelance writer on banking. He can be contacted on sudhakaratre@gmail.com)