1) it is illegal to use deceased parents ATM card to with draw money from his account

2) in case bank or legal heirs files complaint with police you would be in serious trouble .it would be theft punishable under section 379 of IPC for imprisonment upto 3 years or with fine or both

3) it is better to redeposit amounts with drawn from the deceased parent s account

4) if deceased parent did not leave any nomination you have to apply for succession certificate from court to realise money lying in deceased account

account can be closed on demise of the deceased parent.

2) inform bank of parents demise

3) furnish death certificate to bank

4) if any nomination had been made by deceased payment wound be made to survivors / nominees

BI/2005-06/48

RPCD.CO.RF. BC.No.12/07.38.01/2005-06

July 12, 2005

The Chairmen/CEOs

All State and District Central Co-operative Banks

Dear Sir,

Settlement of claims in respect of deceased depositors – Simplification of Procedure

Pursuant to the announcement in the Mid-Term Review of the Annual Policy of the RBI on November 3, 2003, the Committee on Procedure and Performance Audit on Public Services (CPPAPS) was constituted by the RBI with a view to improving the quality of public services to the common person. The Committee in its Report No.3 on 'Banking Operations : Deposit Accounts and Other Facilities Relating to Individuals (Non-Business)', observed that the tortuous procedures, particularly those applicable to the family of a deceased depositor, caused considerable distress to such family members. While the instruction regarding settlement of claims in respect of the deceased depositors had been issued to the banks vide our circulars RPCD.CO.No.RF.BC 09/07.38.01/2000-2001 dated August 22, 2000 and RPCD.CO.No.RF.BC. 59/07.28.01/2000-2001 dated February 27, 2001, the existing dispensation has been reviewed in the light of the recommendations of the CPPAPS and the following instructions are being issued, in supersession of all the earlier instructions on the subject, to facilitate expeditious and hassle-free settlement of claims on the death of a depositor.

2. ACCESS TO BALANCE IN DEPOSIT ACCOUNTS

(A) Accounts with survivor/nominee clause

2.1 As you are aware, 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 represents 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 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.

2.2 It may be noted that since payment made to the survivor(s) / nominee, subject to the foregoing conditions, would constitute a full discharge of the bank's liability, insistence on production of legal representation is superfluous and unwarranted and only serves to cause entirely avoidable inconvenience to the survivor(s) / nominee and would, therefore, invite serious supervisory disapproval. In such case, therefore, while making payment to the survivor(s) / nominee of the deceased depositor, the banks are advised to desist from insisting on production of succession certificate, letter of administration or probate, etc., or obtain any bond of indemnity or surety from the survivor(s)/nominee, irrespective of the amount standing to the credit of the deceased account holder.

(B) Accounts without the survivor/nominee clause

2.3 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), banks 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, 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 a letter of indemnity.

3. Premature Termination of term deposit accounts

In the case of term deposits, banks 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.

4. Treatment of flows in the name of the deceased depositor

In order to avoid hardship to the survivor(s) / nominee of a deposit account, banks are advised to obtain appropriate agreement / authorization from the survivor(s) / nominee with regard to the treatment of pipeline flows in the name of the deceased account holder. In this regard, banks could consider adopting either of the following two approaches:

The bank could 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.

OR

The bank could be authorized by the survivor(s) / nominee to return the pipeline flows to the remitter with the remark 'Account holder deceased' and to intimate the survivor(s) / nominee accordingly. The survivor(s) / nominee / legal heir(s) could then approach the remitter to effect payment through a negotiable instrument.

5. Access to the safe deposit lockers / safe custody articles

For dealing with the requests from the nominee(s) of the deceased locker-hirer / 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 banks are advised to adopt generally the foregoing approach, mutatis mutandis, as indicated for the deposit accounts. Detailed guidelines in this regard are, however, being issued separately.

6. Time limit for settlement of claims

Banks are advised to settle the claims 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 the claim(s), to the bank's satisfaction.

Banks should report to the Board, at appropriate intervals, on an ongoing basis, the details of the number of claims received pertaining to deceased depositors / locker-hirers / depositors of safe custody article accounts and those pending beyond the stipulated period, giving reasons therefor.

7. Provisions of the Banking Regulation Act, 1949

In this connection, attention is also invited to the provisions of Sections 45ZA to 45ZF of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies).

8. Simplified operational systems / procedures

NABARD has been advised to formulate a Model Operational Procedure (MOP) for settlement of claims of the deceased constituents, under various circumstances, consistent with the instructions contained in this circular, for adoption by the banks. The banks are, therefore, advised to undertake a comprehensive review of their extant systems and procedures relating to settlement of claims of their deceased constituents (i.e., depositors / locker-hirers / depositors of safe-custody articles) with a view to evolving a simplified policy / procedures for the purpose, with the approval of their Board, taking into account the applicable statutory provisions, foregoing instructions as also the MOP to be formulated by the NABARD.

9. Customer Guidance and Publicity

Banks are advised to 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. These instructions should be viewed as very critical element for bringing about significant improvement in the quality of customer service provided to survivor(s) / nominee(s) of deceased depositors.

11. Please acknowledge receipt to our concerned Regional Office.

Yours faithfully,

(C.S.Murthy)

Chief General Manager-in-Charge

If legal heirs don't complain and bank does not take any action no criminal charges would be levied against you

It is better funds withdrawn are redeposited in said account

2) bank may call upon you to redeposit funds withdrawn from account

3) if you fail to redeposit bank may take action

1. For attracting any punishment, there should be a complainant who will lodge the said complaint,

2. The complainant also should have locus standi in the matter. Complaint lodged by a person not related to the matter will have no legal leg to stand,

3. If any of the legal heirs of the deceased person lodges a police complaint then the person who withdrew the money from the ATM after the demise of the account holder, will be accused with the charge of theft. (since the amount lying in the account of the demised person belongs to all his legal heirs which can not be taken away by any one person).

1. The Bank account will certainly be closed/frozen after getting the information of death of its account holder,

2. The amount lying in the said account will be disbursed amongst the legal heirs based on succession certificate or as per the Court order, if any.

1. If there is no complaint from the other legal heirs and the act is not reported by any of them, then the said act will not come to surface,

2. There will be no criminal action for want of complaint by the other legal heirs.

1. The Bank will not know as to who has withdrawn the amount of the dead person,

2. The bank will not take any suo moto action against the said person,

3. If by any chance the Bank takes up the issue, the act can be defended by stating that the dead person asked him to withdraw the said amount and gave the ATM card and password and before withdrawing the amount, it was not known that he has does. However, there is hardly any chance that this question will arises.

There is no offence if the legal heirs to the deceased account holder operate his bank account of debit card after his demise, albeit the bank should be notified of the demise of the account holder before his bank account/atm card are operated. If there is more than one legal heir then succession certificate ought to be obtained to realise the funds.

The bank cannot criminally prosecute the heirs of the deceased account holder for withdrawing money without notifying it. No offence is committed.

It is not legal to withdraw money from a deceased parent's bank account using atm card and pin. If someone did make such a withdrawal after the death of the parent without informing the bank but later informed the bank about the person's death, what criminal punishment would it draw? There is no dispute or claim regarding the account or legal heirs.

Actually it is illegal to withdraw the amount through T after the death of the the account holder.

When practically looking at it, you may experience lot of difficulties to get that money from the bank wherein you would be made to run from pillar to stone for getting various signatures in various forms.

Dont inform the bank that you have withdrawn amount after the death of the deceased, the bank also will not show interest in it even if it comes to know about it and might show a blind eye to it.

So dont propagate it.

Can such a bank account be closed after following due process with the bank.

Yes the account can be closed by following procedures meant for it.

In case the money is withdrawn by one of the legal heirs and there is no dispute regarding claim of funds among legal heirs, how serious is the offence.

The people who have to raise objections or lodge criminal complaint in this regard is the other legal heirs, if they prefer not to open their mouth, there won't be problem from the bank side too, hence do not rake up the issue.

In case the bank is approached for closing the account is now, would the bank still take action because funds were withdrawn from the dead person's account without informing the bank, although by legal heirs themselves, or would there be no action by the bank.

The bank may not initiate any action until somebody from the relative is making a complaint in this regard.The people who have to raise objections or lodge criminal complaint in this regard is the other legal heirs, if they prefer not to open their mouth, there won't be problem from the bank side too.