Procedure for Claiming / Withdrawing Funds From The Bank Account of Deceased / Missing Relatives.

When a relative expires, the family members have to follow due procedure to withdraw the money from the bank account of the deceased person. It is not advisable to withdraw money from account of the deceased person using the Debit card or other electronic means and it would be prudent to follow the procedure explained below:

Scenario 1: In case of a deceased person when the bank account has a nominee / survivorship clause.

In this case the nominee / survivor of the deceased person has to approach the bank and fill the claim form. The banks have been advised to make these claim forms available on their website.

The banks in this case cannot insist upon the production of succession certificate / letter of administration or probate or any kind of indemnity / surety from the claimant.

The bank is obligated to the make the payment to the nominee / survivor subject to the following:-

(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 from 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.

Scenario 2: In case of a deceased person when the bank account doesn’t a contain survivorship / nominee clause.

In this case the banks have been advised to follow a simplified procedure for the settlement of claims and ensuring avoidance of inconvenience to the common person. The banks have been advised to fix a minimum threshold limit up to which the claims can be settled only the basis of indemnity bond and without insisting for any other documentation. Banks are free to decide

/ fix this threshold limit taking into consideration their risk management systems. For claims above the threshold limit, the banks can insist for additional documentation (for example succession certificate, legal heir certificate letters of probate etc.)

Time period for settlement of claims

The banks are obligated to settle the claims within a period 15 days from the date of the receipt of claim form subject to the production of proof of death of the depositor and suitable identification of the claim(s), to the bank’s satisfaction.

The Reserve Bank of India has passed detailed circulars dated 09.06.2005 and 03.09.2013 for processing of claims in respect of deceased depositors. The RBI circular dated 09.06.2005 can downloaded from here. The RBI circular dated 03.09.2013 can downloaded from here.

Scenario 3: When the account holder is missing.

The banks have been advised to fix a minimum threshold limit up to which the claims can be settled only the basis of indemnity bond and FIR along with non traceability report (issued by police authorities) and without insisting for any other documentation. Banks are free to decide / fix this threshold limit taking into consideration their risk management systems.

For claims above the threshold limit, the procedure envisaged under section 107 / 108 of the Indian Evidence Act 1872 would be applicable. The claimant would have to file a petition for presumption of death (which can be filed if the person has been unheard of by the relatives for a period of 7 years) before a competent court and if court allows the said petition the claim can be settled on the basis of the same.

The Reserve Bank of India has passed a circular dated 02.05.2008 for claims in respect of missing persons. The RBI circular dated 02.05.2008 can downloaded from here.