DRAFT FOR COMMENTS RBI/2025-26/XX
DoR.MCS.REC.No./00-00-000/2025-26 XX, 2025 Reserve Bank of India (Regional Rural Banks - Responsible Business Conduct) Directions, 2025 Introduction 1. Customer service holds great significance in the financial services sector. The Reserve Bank of India has, over the years, issued various instructions with a focus on enhancing the level of customer service and ensuring fair conduct towards customers by banks. These directions are issued with an aim to consolidate the various regulatory guidelines on customer service and conduct aspects issued by the Reserve Bank of India to Regional Rural Banks at one place. 2. Accordingly, in exercise of the powers conferred by Sections 21 and 35A of Banking Regulation Act, 1949, the Reserve Bank of India (hereinafter called the ‘Reserve Bank’ or ‘RBI’), being satisfied that it is necessary and expedient in public interest to do so, hereby, issues these Directions. Chapter I - Preliminary A. Short title and commencement 3. These Directions shall be called the Reserve Bank of India (Regional Rural Banks - Responsible Business Conduct) Directions, 2025. 4. These Directions shall come into effect immediately upon issuance. B. Applicability 5. These Directions shall be applicable to Regional Rural Banks (hereinafter collectively referred to as 'banks' and individually as a 'bank'). C. Definitions 6. In these Directions, unless the context states otherwise, the terms herein shall bear the meanings assigned to them below: (1) Annual Percentage Rate (APR) is the annual cost of credit to the borrower which includes interest rate and all other charges associated with the credit facility. (2) Bank induced transaction: Transactions in the account initiated by the bank as per its extant policy such as charges, fees, interest payments, penalties, taxes. Note: Illustrative list of bank induced transactions is as under: (i) All types of charges levied by banks including taxes deducted. (ii) Interest paid on savings bank account balances. (3) Benchmark Prime Lending Rate (BPLR): Benchmark Prime Lending Rate (BPLR) means internal benchmark rate used to determine the interest rates on advances/loans sanctioned by banks during the period from April 2003 to June 30, 2010 as defined under the Banking Statistics II at https://www.rbi.org.in/scripts/DataDefinition.aspx. (4) Customer can be defined as a user or a potential user of bank services. A ‘Customer’ may include: (i) a person or entity that maintains an account and/or has a business relationship with the bank; (ii) one on whose behalf the account is maintained (i.e., the beneficial owner); (iii) beneficiaries of transactions conducted by professional intermediaries, such as Stockbrokers, Chartered Accountants, Solicitors, etc., as permitted under the law, and (iv) any person or entity connected with a financial transaction which can pose significant reputational or other risks to the bank, say, a wire transfer or issue of a high value demand draft as a single transaction. (5) Customer induced transaction: The transactions in account which are in the nature of: (i) a financial transaction initiated by or done at the behest of the account holder by the bank/ third party or; (ii) a non-financial transaction, or; (iii) KYC updation done in face-to-face physical mode or through digital channels such as internet banking or mobile banking application of the bank. Note: Illustrative list of financial transactions is as under: (a) ATM/ Cash withdrawal/deposit (b) RTGS / NEFT/ IMPS /UPI/ AePS/ ABPS Transactions (c) Internet Banking Transactions (d) Debit Card Transactions (e) Transfer of funds from / to the linked CBDC(e-Rupee) account (f) Cheque Clearing (g) Remittance of funds by way of demand drafts (h) Cash withdrawal by third party through cheque (i) Standing Instructions issued by the customer (j) NACH Debit / Credits (k) Term Deposit Interest / proceeds (l) Dividend on shares/Interest on Debentures or any other investment proceeds (m) Direct Benefit Transfer (DBT) credits (n) Refunds such as related to e-commerce payments, Income Tax Returns, etc. (o) National Electronic Toll Collection (NETC) debits (6) Digital Lending: A remote and automated lending process, largely by use of seamless digital technologies for customer acquisition, credit assessment, loan approval, disbursement, recovery, and associated customer service. (7) Digital Lending Apps/ Platforms (DLAs): Mobile and/or web-based applications, on a standalone basis or as a part of suite of functions of an application with user interface that facilitate digital lending services. DLAs shall include applications of the bank as well as those operated by Lending Service Provider (LSP) engaged by bank for extending any credit facilitation services in conformity with extant outsourcing guidelines issued by the Reserve Bank. (8) Equated Periodic Instalment (EPI) is an equated or fixed amount of repayments, consisting of both the principal and interest components, to be paid by a borrower towards repayment of a loan at periodic intervals for a fixed number of such intervals; and which result in complete amortisation of the loan. EPIs at monthly intervals are called EMIs. (9) Financial transaction: A monetary transaction in the savings/ current account of the customer with the bank either by way of a credit or debit transaction. (10) Inoperative Account: A savings/ current account shall be treated as inoperative, if there are no ‘customer induced transactions’ in the account for a period of over two years. (11) Key Facts of a loan agreement between a bank / a group of banks and a borrower are legally significant and deterministic facts that satisfy basic information required to assist the borrower in taking an informed financial decision. (12) Key Facts Statement (KFS) is a statement of key facts of a loan agreement, in simple and easier to understand language, provided to the borrower in a standardised format. (13) Lending Service Provider (LSP): An agent of the bank (including another bank) who carries out one or more of the bank’s digital lending functions, or part thereof, in customer acquisition, services incidental to underwriting and pricing, servicing, monitoring, recovery of specific loan or loan portfolio on behalf of the bank in conformity with extant outsourcing guidelines issued by the Reserve Bank. (14) ‘Microfinance loan’ is defined as a collateral-free loan given to a household having annual household income up to ₹3,00,000. For this purpose, the household shall mean an individual family unit, i.e., husband, wife and their unmarried children. (15) Non-financial transaction: An enquiry or request for any product/ service initiated by the account holder through any ATM or internet banking or mobile banking application of the bank or through Third Party Application Providers, which requires two-factor authentication (2FA) and leaves a trail for audit purposes or successful log-in to the internet banking/ mobile banking application. Illustratively, this includes transactions such as change in transaction limit, request for issue of cheque book/ credit card/ debit card, nomination facility, balance enquiry, etc. (16) Personal Loan: Personal loans shall have the same meaning as defined in XBRL Returns – Harmonization of Banking Statistics dated January 04, 2018, as amended from time to time. (17) Savings Deposits: Savings Deposit means a form of interest bearing demand deposit which is a deposit account whether designated as ‘Savings Account’, ‘Savings Bank Account’, ‘Savings Deposit Account’, ‘Basic Savings Bank Deposit Account (BSBDA)’ or other account by whatever name called which is subject to the restrictions as to the number of withdrawals as also the amounts of withdrawals permitted by a bank during any specified period. (18) Term Deposits: Term Deposit means an interest-bearing deposit received by a bank for a fixed period and shall also include deposits such as Recurring / Cumulative / Annuity / Reinvestment deposits and Cash Certificates. (19) Unclaimed Deposits: The credit balance in any deposit account maintained with banks, which have not been operated upon for ten years or more, or any amount remaining unclaimed for ten years or more as mentioned in paragraph 3(iii) of the “Depositor Education and Awareness” (DEA) Fund Scheme, 2014. (20) Unclaimed Deposit Reference Number (UDRN): It is a unique number generated through Core Banking Solution (CBS) and assigned to each unclaimed account/ deposit transferred to DEA Fund of RBI. The number shall be such that the account holder or the bank branch where account is maintained, cannot be identified by any third party. Chapter II – Institutional Framework A. Role of Board A.1 Board approved policies 7. The bank shall put in place approved policies and establish periodic review mechanisms to ensure sound business conduct and enhanced customer service. An illustrative list of such policies to be approved by the Board or a Committee(s) to which powers have been delegated is provided below. The specific aspects to be addressed in these policies are detailed in the relevant paragraphs of this Direction. (1) General Customer Service Aspects: Policy for general management of branches covering, inter alia, new products and services approval process; Customer Relations Policy covering customer protection and customer liability in case of reporting delays beyond seven days in unauthorised electronic banking transactions; Branch Insurance Policy; Comprehensive Policy and SOP on safe deposit lockers facility covering agreement for safe deposit lockers, nomination and release of contents, access to legal heir/s of deceased locker-hirer/s, breaking open of lockers, loss or damage of content of lockers, etc.; Policy on Doorstep Banking for Senior Citizens / Differently Abled Persons; Customer Compensation Policy; Policy for preventing misuse of cheque drawing facility including procedure for dealing with dishonoured cheques / frequent dishonour of cheques; Policy for settlement of claims; and Fair Practice Code for lending to microfinance borrowers. (2) Liability related: Policy on Basic Savings Bank Deposit Account (BSBDA), Comprehensive Deposit Policy, and Policy on Penal Charges for non-maintenance of minimum balance in savings accounts. (3) Asset related: Policy on Penal Charges on loans / advances and Policy on reset of floating rate loans including option to borrowers for switch between fixed and floating interest rates. (4) Training related: Policy regarding the conduct of employees and system for their recruitment, training and monitoring. A.2 Reviews to be carried out by the Board or Committee to which powers have been delegated 8. An illustrative list of reviews to be carried out by the Board or a Committee(s) to which powers have been delegated is provided below. The specific aspects to be addressed in these reviews are detailed in the relevant paragraphs of this Direction. (1) Review of Customer Service/customer care aspects once in six months. (2) Review of implementation of instructions regarding operations in rural branches and the effects thereof on the quality of operations of the rural branches. (3) Customer liability cases in unauthorised electronic banking transactions. B. Customer Service: Institutional Framework B.1 Need for Board's involvement 9. Matters relating to customer service shall be deliberated by the Board to ensure that the instructions are implemented meaningfully. One of the major responsibilities of the Board shall be to ensure hassle-free service to the customer at large and the Common Person in particular under the its active oversight. B.2 Board approved policies on Customer Service 10. Customer service shall be projected as a priority objective of banks along with profit, growth and fulfilment of social obligations. The bank shall have a Board approved policy for the following: B.2.1 Comprehensive Deposit Policy 11. The bank shall formulate a transparent and comprehensive policy setting out the rights of the depositors in general and small depositors in particular. The policy shall cover all aspects of operations of deposit accounts, charges leviable and other related issues to facilitate interaction of depositors at branch levels. Such a policy shall also be explicit regarding secrecy and confidentiality of the customers. Providing other facilities by "tying-up" with placement of deposits is clearly a restrictive practice. B.2.2 Customer Compensation Policy 12. The bank shall have a Board approved Customer Compensation Policy which shall at a minimum, incorporate the following aspects: (1) Erroneous Debits arising on fraudulent or other transactions. (2) Payment of interest for delays in collection. (3) Payment of interest for delay in issue of duplicate draft. (4) Other unauthorised actions of the bank leading to a financial loss to customer. B.3 Giving publicity to the policies 13. The bank shall place the above policies formulated by it prominently on the web-site as well as display them on the notice board of its branches, to ensure wide publicity. Necessary steps shall be taken to keep the customers duly informed of the changes in the policies formulated by it, from time to time. The customers shall be clearly apprised of the assurances of the bank on the services provided, at the time of establishment of the initial relationship, be it as a depositor, borrower or otherwise. B.4 Customer Service Committee of the Board 14. The bank shall constitute a Customer Service Committee of the Board that includes experts and representatives of customers as invitees. This shall enable the bank to formulate policies and assess the compliance thereof internally, thereby strengthening the corporate governance structure in the banking system. B.5 Role of the Customer Service Committee 15. Customer Service Committee of the Board, illustratively, shall address the following: (1) formulation of a Comprehensive Deposit Policy. (2) issues such as the treatment of death of a depositor for operations of his account. (3) product approval process with a view to suitability and appropriateness. (4) annual survey of depositor satisfaction. (5) triennial audit of such services. The Committee shall also examine any other issues having a bearing on the quality of customer service rendered. B.6 Board Meeting to Review and Deliberate on Customer Service 16. A detailed memorandum reviewing customer service/customer care aspects of the bank shall be placed once in every six months to the Board of Directors. Prompt corrective action shall be initiated wherever service quality/skill gaps are noticed. B.7 Standing Committee on Customer Service 17. The bank shall have a permanent Standing Committee on Customer Service, cutting across various departments, which shall serve as the micro level executive committee driving the implementation process and providing relevant feedback. The Customer Service Committee of the Board shall oversee and review/modify the initiatives. These two Committees shall be mutually reinforcing with one feeding into the other. 18. The constitution and functions of the Standing Committee shall be on the lines indicated below: (1) The Standing Committee shall be chaired by the MD & CEO or the ED and include non-officials as its members to enable an independent feedback on the quality of customer service rendered by the bank. (2) The Standing Committee shall be entrusted not only with the task of ensuring timely and effective compliance of the RBI instructions on customer service, but also that of receiving the necessary feedback to determine that the action taken by various departments of the bank is in tune with the spirit and intent of such instructions. (3) The Standing Committee shall, on an ongoing basis, review the practice and procedures prevalent in the bank and take necessary corrective action. (4) Standing Committee shall submit a brief report periodically to the Customer Service Committee of the Board on its performance during its tenure indicating, inter alia, the areas reviewed, procedures/practices identified and simplified/introduced. (5) Standing Committee shall act as the bridge between the various departments of the bank and the Board / Customer Service Committees of the Board. B.8 Branch Level Customer Service Committees 19. The bank shall establish Customer Service Committees at branch level. Branches shall include their customers as part of branch level committees. Senior citizens, an important constituent in banks, shall also preferably be included therein. The Branch Level Customer Service Committee shall meet at least once a month to study complaints/ suggestions, cases of delay, difficulties faced / reported by customers / members of the Committee and evolve ways and means of improving customer service. 20. The branch level committees shall submit quarterly reports giving inputs / suggestions to the Standing Committee on Customer Service thus enabling the Standing Committee to examine them and provide relevant feedback to the Customer Service Committee of the Board for necessary policy / procedural action. B.9 Nodal department / official for customer service 21. The bank is expected to have a nodal department / official for customer service in the Head Office and each controlling office, with whom customers with grievances can approach in the first instance and with whom the Banking Ombudsman and RBI can liaise. Chapter III - Customer Service in Branches A. Policy for general management of the branches 22. The bank’s systems and procedures shall be oriented towards providing better customer service and the bank shall periodically assess these systems and their impact on customer service. The bank shall have a Board approved policy for general management of the branches which shall include the following aspects: - (1) providing infrastructure facilities by branches by bestowing particular attention to providing adequate space, proper furniture, drinking water facilities, with specific emphasis on pensioners, senior citizens, disabled persons, etc. (2) providing entirely separate enquiry counters at its large / bigger branches in addition to a regular reception counter. (3) displaying indicator boards at all the counters in English, Hindi as well as in the concerned regional language. Business posters at semi-urban and rural branches of the bank shall also be in the concerned regional languages. (4) deployment of roving officials to ensure employees are responsive to customers and assist customers in putting in their transactions. (5) providing customers with booklets consisting of all details of service and facilities available at the bank in Hindi, English and the concerned regional languages. (6) use of Hindi and regional languages in transacting business by banks with customers, including communications to customers. (7) reviewing and improving upon the existing security system in branches so as to instil confidence amongst the employees and the public. (8) wearing on person an identification badge displaying photo and name thereon by the employees. (9) Periodic change of desk and entrustment of elementary supervisory jobs. (10) Training of staff in line with customer service orientation. Training in Technical areas of banking to the staff at delivery points. Adopting innovative ways of training / delivery ranging from job cards to roving faculty to video conferencing. (11) visit by senior officials from Controlling Offices and Head Office to branches at periodical intervals for on the spot study of the quality of service rendered by the branches. (12) rewarding the best branches from customer service point of view by annual awards/running shield. (13) Customer service audit, Customer surveys. (14) holding Customer relation programmes and periodical meetings to interact with different cross sections of customers for identifying action points to upgrade the customer service with customers. (15) clearly establishing a New Product and Services Approval Process which shall require approval by the Board especially on issues which compromise the rights of the Common Person. (16) appointing Quality Assurance Officers who will ensure that the intent of policy is translated into the content and its eventual translation into proper procedures. B. Service at the counters B.1 Banking hours / working days of branches 23. The bank shall normally function for public transactions at least for four hours on weekdays and two hours on Saturdays in the larger interest of public and trading community. Extension counters, Satellite Offices, one man offices or other special class of branches may remain open for such shorter hours as may be considered necessary. B.2 Commencement / Extension of working hours 24. Commencement of employees’ working hours 15 minutes before commencement of business hours could be made operative by the bank at branches in metropolitan and urban centres. The bank shall implement the recommendation taking into account the provisions of the local Shops and Establishments Act. 25. The branch managers and other supervising officials shall, however, ensure that the members of the staff are available at their respective counters right from the commencement of banking hours and throughout the prescribed business hours so that there may not be any grounds for customers to make complaints. 26. The bank shall ensure that no counter remains unattended during the business hours and uninterrupted service is rendered to the customers. Further, the bank shall allocate the work in such a way that no Teller counter is closed during the banking hours at its branches. 27. All the customers entering the banking hall before the close of business hours shall be attended to. B.3 Extended business hours for non-cash banking transactions 28. The bank shall extend business hours for banking transactions other than cash, up till one hour before close of the working hours. 29. The following non-cash transactions shall be undertaken by the bank during the extended hours, i.e., up to one hour before the close of working hours: (1) Non-voucher generating transactions: (i) Issue of pass books/statement of accounts; (ii) Issue of cheque books; (iii) Delivery of term deposit receipts/drafts; (iv) Acceptance of share application forms; (v) Acceptance of clearing cheques; and (vi) Acceptance of bills for collection. (2) Voucher generating transactions: (i) Issue of term deposit receipts; (ii) Acceptance of cheques for locker rent due; (iii) Issue of travellers cheques; (iv) Issue of gift cheques; and (v) Acceptance of individual cheques for transfer credit. 30. Such non-cash transactions to be done during the extended business hours shall be notified adequately for information of the customers. 31. The bank can have evening counters at the premises of existing branches in urban / metropolitan centres for providing facilities to the public beyond the normal hours of business so as to bring about improvement in customer service. It is necessary that in such cases the transactions conducted during such extended hours of business are merged with the main accounts of the branch where it is decided to provide the aforesaid facilities. 32. The bank shall give to its constituent due notice about the functions to be undertaken during the extended banking hours through local newspapers, as also by displaying a notice on the notice board at the branch(es) concerned. Further, as and when the hours of business of any of the branches are extended, the concerned clearing house shall be informed. B.4 Operation of Rural Branches 33. The bank may at the discretion of its management, treat one day of the week in rural branches, as non-public business working day, so that the branch managers spend it exclusively in the field for contacting their present and potential clientele for development work like mobilisation of deposits, monitoring credit utilisation, recovery and providing appropriate guidance to borrowers. The other staff at the branch would devote the day to keep the house keeping work up-to-date. However, such a day shall fall between two working days. There can be flexibility in fixing the non-business working days keeping local conditions in view, especially the 'Hat' days which occupy an important place in the rural economy, subject to sufficient notice to the public / its customers of its intention. The bank shall ensure that in centres where branches of more than one bank are functioning, one bank among the banks concerned may fix the business hours and the same business hours are adhered to by all of them. The centres having multiple banks operating are very few and any difficulties in arriving at consensus in the matter of fixing a suitable day in a week as Non-Public Business Working Day are not envisaged. Further, if one of the banks operating in a particular centre carries on government business, it alone is exempted from the purview of the requirement to observe non-public business working day in terms of paragraph 37(3) below. 34. The bank shall review the working of the existing rural branches and consider conversion of regular branches on a selective basis into satellite or mobile branches, wherever feasible. The banks shall consider setting up of regular / satellite / mobile branches at the identified centres in a need based manner. Regarding conversion of existing branches into satellite or mobile branches, necessary amendment to the existing licence shall be obtained from the Reserve Bank of India. 35. The branch managers shall utilise the non-business working day exclusively for visiting villages in the command area for contacting existing and potential customers, mobilisation of deposits, monitoring the use of credit extended and arranging for recovery. In particular, branch managers must ensure that harvesting seasons are effectively used for recovery of dues. They shall also devote as much time as possible on the other working days of the week for doing as much field work as possible besides attending to the office routine. The visits to the villages shall be systematically organised so that all the villages in the command area are covered at least once a quarter, by meeting as many customers as possible during each such visit taking into account the time of availability of the rural folk for such contacts. The bank shall devise appropriate systems to ensure that the branch managers play an effective developmental role by undertaking as much field work as possible by prescribing a suitable diary wherein date-wise details of the villages visited, persons contacted and the work done in each village shall be noted clearly. Such diaries shall be obtained and reviewed by the concerned controlling authorities on a regular basis and during their visits to the branches. The bank shall ensure that a perceptible improvement is recorded in the working of each rural branch as a result of introduction of one non-business working recovery and healthy growth of deposits. 36. A report on the progress in implementation of the above recommendations and the effects thereof on the quality of operations of the rural branches may be placed before the Board of Directors for review and guidance. 37. Further, for the purpose of directions in paragraph 33 to 36, it is clarified as under: (1) All branches at places with population of 10,000 or less shall be treated as rural branches. (2) If there is preponderance of non-agricultural activity at a rural centre and closure of the bank branch on a working day causes inconvenience, the bank may consider such cases on merits and make an exception. It is presumed that adequate arrangements exist in such branches to monitor closely the agricultural and rural advances. If there is more than one branch at such a centre, it is desirable that all branches follow the same pattern by a consensus. (3) If Government business is transacted at a rural branch or which cater to industrial / urban clientele, an exception may be considered as indicated at (2) above. (4) In the matter of observing Non-Business Working Day, instructions of Reserve Bank of India alone shall prevail and it is outside the purview of any other forum to issue contrary instructions. C. Transfer of account from one branch to another 38. Instructions of a customer for transfer of his / her account to another office shall be carried out immediately on receipt of, and in accordance with, his / her instructions. It shall be ensured that along with the balance of the account, the relative account opening form, specimen signatures, standing instructions, etc., or the master sheets wherever obtained, are also simultaneously transferred, under advice to the customer. 39. The account transfer form with the enclosures may be handed over to the customer in a sealed cover if he so desires for delivery at the transferee office / branch. However, the transferee office should also be separately supplied with a copy of the account transfer letter. 40. When an office receives an enquiry from a customer regarding the receipt of his / her account on transfer from another office it should take up the matter with the transferor office by electronic means, in case it has not received the balance of the account and / or other related papers even after a reasonable transit time. 41. Customer's account at the new branch will be operationalised within two weeks of receiving his / her request, subject to customer's complying with the required KYC formalities at the new branch. The bank will intimate the customer as soon as the account is operationalised. 42. Accounts may be transferred to any other branch of the bank free of charges. Should the depositor wish to transfer their account, they should make a written application for the transfer to the branch where they maintain their account and send it along with their pass book and unused cheque leaves either to that branch or to the branch to which they wish their account to be transferred. 43. If the customer is not happy about his / her choice of current or savings account (except for term deposit account) within 14 days of making his / her first payment into the account, the bank will help the customer switch to another set of bank accounts or the bank will give the customer money back with any interest it may have earned. The bank will ignore any notice period and any extra charges. 44. If customer decides to close his / her current / savings account, the bank will close the account within five working days of receiving customer's instructions. D. Switching banks by customers 45. The bank shall ensure that depositors dissatisfied with customer service have the facility to switch banks and thwarting depositors from such switches would invite serious adverse action. Chapter IV - Customer Guidance and Protection A. Guidance to Customers and Disclosure of Information A.1 Assistance / guidance to customers 46. The bank shall have “Enquiry” or “May I Help You” counters either exclusively or combined with other duties, located near the entry point of the banking hall, at all branches (excluding very small branches). A.2 Display of time norms 47. The bank shall display the time norms for specialised business transactions predominantly in the banking hall. A.3 Display of information by the bank – Comprehensive Notice Board A.3.1 Notice Boards 48. The existing mandatory instructions have been broadly grouped into four categories mentioned above and given in a Comprehensive Notice Board. The format of the Comprehensive Notice Board is given in the Annex I. The minimum size of the Board may be 2 feet by 2 feet as Board of such a size would facilitate comfortable viewing from a distance of 3 to 5 meters. The bank shall display the information in the Notice Boards of its Branches as per the format given for the Comprehensive Notice Board. 49. While displaying the information in the notice board, the bank shall adhere to the following principles: (1) The notice board shall be updated on a periodical basis and shall indicate the date up to which it was updated (incorporated in the display board). (2) The design of the board shall be kept simple and readable while having the discretion on pattern, colour and design. (3) The notice board shall be in bilingual in Hindi speaking states and trilingual in other states. (4) The notice board shall specifically indicate wherever recent changes have been done. Explanation: If there is a recent change in the SSI loan products offered by the bank, the information on the SSI loan products may be displayed as 'We offer SSI loans/products ( changed on ……….)’. (5) The notice board may also indicate a list of items on which detailed information is available in booklet form. 50. Further, in addition to the above Board, the bank shall also display details such as ‘Name of the bank / branch, Working Days, Working Hours and Weekly Off-days' outside the branch premises. A.3.2 Booklets/Brochures 51. The detailed information as indicated in paragraph (E) of Annex I may be made available in various booklets / brochures as decided by the bank. These booklets / brochures may be kept in a separate file / folder in the form of ‘replaceable pages’ so as to facilitate copying and updation. In this connection, the bank shall also adhere to the following broad guidelines: (1) The file / folder may be kept at the customer lobby in the branch or at the ‘May I Help You‘ counter or at a place that is frequented by most of the customers. (2) The language requirements (i.e., bilingual in Hindi speaking states and trilingual in other states) may be taken into account. (3) While printing the booklets, it may be ensured that the font size is minimum Arial 10 so that the customers are able to easily read the same. (4) Copies of booklets may be made available to the customers on request. A.3.3 Website 52. The detailed information as indicated in paragraph (E) of Annex I shall also be made available on the bank’s website. The bank shall adhere to the broad guidelines relating to dating of material, legibility, etc., while placing the same on its website. The bank shall ensure that the customers are able to easily access the relevant information from the Home Page of the bank’s website. Information relating to service charges and fee and grievance redressal shall be posted compulsorily on the website of the bank. 53. Some of the details, which could be made available for public viewing through website of the bank are listed below: (1) Policy / Guidelines (i) Citizen's Charter (ii) Deposit Policy (iii) Deceased Depositors Policy along with Nomination Rules (iv) Cheque Collection Policy (v) Fair Practices Code for Lenders (vi) Code for Collection of Dues and Repossession of Security (2) Complaints (i) Grievance Redressal Mechanism (ii) Information relating to Banking Ombudsmen (3) Opening of Accounts (i) Account Opening Forms (ii) Terms and Conditions (iii) Service Charges for various types of services – Should cover typical common services including courier charges – What services are available without any charges. (iv) Interest rates on Deposits (v) Minimum balances – along with corresponding facilities offered. (4) Loans and Advances (i) Application forms relating to loans and advances (ii) Copy of blank agreement to be executed by the borrower (iii) Terms and Conditions (iv) Processing fee and other charges (v) Interest rates on Loans and Advances (5) Branches (i) Details of the branches along with addresses and telephone numbers (with search engine for queries relating to the branch location) (ii) Details of ATMs along with the addresses A.3.4 Other modes of display 54. The bank may also consider displaying all the information that has to be given in the booklet form in the touch screen by placing them in the information kiosks. Scroll Bars, Tag Boards are other options available. The above broad guidelines should be adhered to while displaying information using these modes. A.3.5 Other issues 55. The bank is free to decide on its promotional and product information displays. However, the mandatory displays should not be obstructed in anyway. As customer interest and financial education are sought to be achieved by the mandatory display requirements, they shall also be given priority over the other display boards. Information relating to Government sponsored schemes as applicable location-wise may be displayed according to their applicability. A.4 Display of information relating to the Interest Rates and Service Charges – Rates at a quick glance 56. A format has been devised by Reserve Bank for display of information relating to the interest rates and service charges which shall enable the customer to obtain the desired information at a quick glance. The format is given in Annex II. The bank shall display the information as per the format given in Annex II on its website. The bank is however free to modify the format to suit its requirements, without impairing the basic structure or curtailing the scope of disclosures. 57. The bank shall also ensure that only latest updated information in the above format is placed on its website and the same is easily accessible from the Home Page of its website. B. Printed material in trilingual form 58. In order to ensure that banking facilities percolate to the vast sections of the population, the bank shall make available all printed material used by retail customers including account opening forms, pay-in-slips, passbooks, etc., in trilingual form, i.e., English, Hindi and the concerned Regional Language. Provided that in cases where the bank has already made available such material in regional language/s, they shall not be required to provide the same in trilingual form. C. Publicity in the bank branches cautioning public against placing deposits in dubious schemes 59. The bank may in its own interest and as a customer education effort in the interest of the public, consider designing suitable posters or pamphlets or flyers or notices containing following messages: Never respond to unsolicited offers of money received through emails/phone/other media*
No one really gives you money for free*
Be careful while investing in seemingly attractive schemes offering high returns*
Don’t invest in unregulated companies/entities*
Don’t rely on hearsay - Check for yourself*
High return means higher risk including potential loss of entire money – Check your risk-appetite!*
Take care of your money – it is hard to earn but easy to lose*
When in doubt check with a trusted financial adviser*
*For any clarification, visit www.rbi.org.in or www.sebi.gov.in or www.irda.gov.in | 60. Wherever feasible, such messages may be displayed or distributed in the bank branches (in the official language of the state) to enable easy notice by the customers. Since bank branches are vantage points where members of public visit, it will help to disseminate the information to the public. The bank may consider places like Automated Teller Machines or Business Correspondent Points where such messages could get wider visibility. This would also be beneficial to the bank as its customers would be aware and vigilant of any such fraudulent schemes/calls. 61. It needs to be emphasised that to be effective, such measures have to be pursued continuously for a long period of time and therefore the field staff may be sensitised in this regard. The branch officials shall also be encouraged to share any meaningful information (market intelligence) of any such dubious scheme in their area with their Regional Offices, which may, in turn, share such information with concerned Regional Office of RBI. D. Citizens' Charter and Fair Practice Code 62. The bank shall introduce Citizens' Charter as per the following: (1) "The ____________ Gramin Bank strongly believes that a satisfied customer is the most important factor for growth of its business. (i) This document called the "Citizens' Charter of _____________ Gramin Bank" provides key information on various facilities / services provided to customers in branches of __________ Gramin Bank. The Citizens' Charter, together with Code of Fair Practices, will thus, ensure high standards of accountability, responsibility and transparency in the bank's dealings with customers. The Charter also provides comprehensive information on bank's grievances redressal mechanism. (ii) This is not a legal document creating rights and liabilities. Loans and advances may also have specific terms and conditions not mentioned in the Charter. However, all terms and conditions will comply with the principles and commitments undertaken by the bank in the Code. (iii) Copies of the Citizens' Charter and Code will be available on request to all our customers at our branches and controlling offices. We will ensure that all our staff members are aware of the commitments contained in these documents and faithfully implement them. (iv) The Charter provides essential information in transactions relating to savings, current and fixed deposit accounts, safe deposit lockers, grievances redressal, etc. For further details and complete information on terms and conditions of service visit our branches or write to us at Head Office. (v) Information given in the Charter is current as of ____________ (state the date). Information given is subject to change / revision. The bank will endeavour to update the information to changes are made but please contact the nearest branch / Area Office / Controlling Office for the latest changes, if any. " D.1 Implementation Process of Fair Practices Code 63. The finding and recommendations of the 'Committee on Procedures and Performance Audit on Public Services' formally set rolling the process of evolving of the Codes of Fair Practices and their adoption of banks. The IBA had also discharged its due role by formulating codes on fair practices for customer services, credit card operations and credit recovery processes. 64. The clientele of RRBs primarily from rural and semi-urban areas of the country are far from empowered and need to be protected by codes of fair practices specifically designed keeping their profile in view. The codes to be adopted by RRBs shall cover the products and services provided by the bank in simple terminology and devoid of jargon. Needles to state that they should be brought out in vernacular spoken in the area of operations of the bank. 65. The banks adopting 'Codes of Fair Practices' shall ensure that the availability of the codes is well publicised. 66. Besides wide initial launching publicity of the codes, the bank shall ensure that the code is displayed on Notice Board prominently in the branches and other facilities of the bank. 67. More importantly, the bank shall properly orient its staff especially its front office staff on the relevance of codes and ensure the implementation of the codes in letter and spirit. E. Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions E.1 Strengthening of systems and procedures 68. The electronic banking transactions can be divided into two categories: (1) Remote/ online payment transactions (transactions that do not require physical payment instruments to be presented at the point of transactions, e.g., internet banking, mobile banking, card not present (CNP) transactions, Pre-paid Payment Instruments (PPI), and (2) Face-to-face/ proximity payment transactions (transactions which require the physical payment instrument such as a card or mobile phone to be present at the point of transaction, e.g., ATM, POS, etc.). 69. The systems and procedures in the bank shall be designed to make customers feel safe about carrying out electronic banking transactions. To achieve this, the bank shall put in place: (1) appropriate systems and procedures to ensure safety and security of electronic banking transactions carried out by customers; (2) robust and dynamic fraud detection and prevention mechanism; (3) mechanism to assess the risks (for example, gaps in the bank’s existing systems) resulting from unauthorised transactions and measure the liabilities arising out of such events; (4) appropriate measures to mitigate the risks and protect themselves against the liabilities arising therefrom; and (5) a system of continually and repeatedly advising customers on how to protect themselves from electronic banking and payments related fraud. E.2 Reporting of unauthorised transactions by customers to banks 70. The bank shall ask its customers to mandatorily register for SMS alerts and wherever available register for e-mail alerts, for electronic banking transactions. The SMS alerts shall mandatorily be sent to the customers, while email alerts may be sent, wherever registered. The customers shall be advised to notify their bank of any unauthorised electronic banking transaction at the earliest after the occurrence of such transaction and inform that the longer the time taken to notify the bank, the higher will be the risk of loss to the bank / customer. To facilitate this, the bank shall provide customers with 24x7 access through multiple channels (at a minimum, via website, phone banking, SMS, e-mail, IVR, a dedicated toll-free helpline, reporting to home branch, etc.) for reporting unauthorised transactions that have taken place and/ or loss or theft of payment instrument such as card, etc. The bank shall also enable customers to instantly respond by "Reply" to the SMS and e-mail alerts and the customers shall not be required to search for a web page or an e-mail address to notify the objection, if any. Further, a direct link for lodging the complaints, with specific option to report unauthorised electronic transactions shall be provided by the bank on home page of its website. The loss/ fraud reporting system shall also ensure that immediate response (including auto response) is sent to the customers acknowledging the complaint along with the registered complaint number. The communication systems used by the bank to send alerts and receive their responses thereto must record the time and date of delivery of the message and receipt of customer’s response, if any, to it. This shall be important in determining the extent of a customer’s liability. The bank shall not offer facility of electronic transactions, other than ATM cash withdrawals, to customers who do not provide mobile numbers to the bank. On receipt of report of an unauthorised transaction from the customer, the bank shall take immediate steps to prevent further unauthorised transactions in the account. E.3 Limited Liability of a Customer E.3.1 Zero Liability of a Customer 71. A customer’s entitlement to zero liability shall arise where the unauthorised transaction occurs in the following events: (1) Contributory fraud/ negligence/ deficiency on the part of the bank (irrespective of whether the transaction is reported by the customer or not). (2) Third party breach where the deficiency lies neither with the bank nor with the customer but lies elsewhere in the system, and the customer notifies the bank within three working days of receiving the communication from the bank regarding the unauthorised transaction. E.3.2 Limited Liability of a Customer 72. A customer shall be liable for the loss occurring due to unauthorised transactions in the following cases: (1) In cases where the loss is due to negligence by a customer, such as where they have shared the payment credentials, the customer will bear the entire loss until they report the unauthorised transaction to the bank. Any loss occurring after the reporting of the unauthorised transaction shall be borne by the bank. (2) In cases where the responsibility for the unauthorised electronic banking transaction lies neither with the bank nor with the customer, but lies elsewhere in the system and when there is a delay (of four to seven working days after receiving the communication from the bank) on the part of the customer in notifying the bank of such a transaction, the per transaction liability of the customer shall be limited to the transaction value or the amount mentioned in Table 1, whichever is lower. Table 1
Maximum Liability of a Customer under paragraph 72(2) | | Type of Account | Maximum liability
(₹) | | • BSBD Accounts | 5,000 | • All other SB accounts
• Pre-paid Payment Instruments and Gift Cards
• Current/ Cash Credit/ Overdraft Accounts of MSMEs
• Current Accounts/ Cash Credit/ Overdraft Accounts of Individuals with annual average balance (during 365 days preceding the incidence of fraud)/ limit up to ₹25 lakh
• Credit cards with limit up to ₹5 lakh | 10,000 | • All other Current/ Cash Credit/ Overdraft Accounts
• Credit cards with limit above ₹5 lakh | 25,000 | 73. Further, if the delay in reporting is beyond seven working days, the customer liability shall be determined as per the bank’s Board approved policy. The bank shall provide the details of its policy regarding customers’ liability formulated in pursuance of these directions at the time of opening the accounts. The bank shall also display its approved policy in public domain for wider dissemination. The existing customers shall also be individually informed about the bank’s policy. 74. Overall liability of the customer in third party breaches, as detailed in paragraphs 71(2) and 72(2) above, where the deficiency lies neither with the bank nor with the customer but lies elsewhere in the system, is summarised in the Table 2: Table 2
Summary of Customer’s Liability | | Time taken to report the fraudulent transaction from the date of receiving the communication | Customer’s liability (₹) | | Within three working days | Zero liability | | Within four to seven working days | The transaction value or the amount mentioned in Table 1, whichever is lower | | Beyond seven working days | As per the bank’s Board approved policy | 75. The number of working days mentioned in Table 2 shall be counted as per the working schedule of the home branch of the customer excluding the date of receiving the communication. E.4 Reversal Timeline for Zero Liability / Limited Liability of customer 76. On being notified by the customer, the bank shall credit (shadow reversal) the amount involved in the unauthorised electronic transaction to the customer’s account within 10 working days from the date of such notification by the customer (without waiting for settlement of insurance claim, if any). The bank may also, at its discretion, decide to waive off any customer liability in case of unauthorised electronic banking transactions even in cases of customer negligence. The credit shall be value dated to be as of the date of the unauthorised transaction. 77. Further, the bank shall ensure that: (1) a complaint is resolved and liability of the customer, if any, established within such time, as may be specified in the bank’s Board approved policy, but not exceeding 90 days from the date of receipt of the complaint, and the customer is compensated as per provisions of paragraphs 71 to 76 above; (2) where it is unable to resolve the complaint or determine the customer liability, if any, within 90 days, the compensation as prescribed in paragraphs 71 to 76 is paid to the customer; and (3) in case of debit card/ bank account, the customer does not suffer loss of interest, and in case of credit card, the customer does not bear any additional burden of interest. E.5 Board Approved Policy for Customer Protection 78. Taking into account the risks arising out of unauthorised debits to customer accounts owing to customer negligence / bank negligence / banking system frauds / third party breaches, the bank needs to clearly define the rights and obligations of customers in case of unauthorised transactions in specified scenarios. The bank shall formulate/ revise its customer relations policy, with approval of its Board, to cover aspects of customer protection, including the mechanism of creating customer awareness on the risks and responsibilities involved in electronic banking transactions and customer liability in such cases of unauthorised electronic banking transactions. The policy must be transparent, non-discriminatory and shall stipulate the mechanism of compensating the customers for the unauthorised electronic banking transactions and also prescribe the timelines for effecting such compensation keeping in view the instructions contained in paragraph 77 above. The policy shall be displayed on the bank’s website along with the details of grievance handling/ escalation procedure. The instructions contained in this circular shall be incorporated in the policy. E.6 Burden of Proof 79. The burden of proving customer liability in case of unauthorised electronic banking transactions shall lie on the bank. E.7 Reporting and Monitoring Requirements 80. The bank shall put in place a suitable mechanism and structure for the reporting of the customer liability cases to the Board or one of its Committees. The reporting shall, inter alia, include volume / number of cases and the aggregate value involved and distribution across various categories of cases, viz., card present transactions, card not present transactions, internet banking, mobile banking, ATM transactions, etc. The Standing Committee on Customer Service in the bank shall periodically review the unauthorised electronic banking transactions reported by customers or otherwise, as also the action taken thereon, the functioning of the grievance redressal mechanism and take appropriate measures to improve the systems and procedures. All such transactions shall be reviewed by the bank’s internal auditors. F. Erroneous Debits arising on fraudulent or other transactions F.1 Vigilance by banks 81. The bank shall adhere to the guidelines and procedures for opening and operating deposit accounts to safeguard against unscrupulous persons opening accounts mainly to use them as conduit for fraudulently encashing payment instruments. However, in view of receipt of continuous complaints of fraudulent encashment by unscrupulous persons opening deposit accounts in the name/s similar to already established entities, resulting in erroneous and unauthorised debit of drawers’ accounts, the bank shall remain vigilant to prevent such lapses and issue necessary instructions to the branches / staff. F.2 Compensating the customer 82. In case of such erroneous debits on account of fraudulent or other transactions, the bank also delay restoring funds to customers, including in bona-fide cases, and defer action till completion of either departmental action or police interrogation. The bank is advised that: (1) In case of any fraud, if the branch is convinced that an irregularity / fraud has been committed by its staff towards any constituent, the branch shall at once acknowledge its liability and pay the just claim, (2) in cases where bank is at fault, the bank shall compensate customers without demur, and (3) in cases where neither the bank is at fault nor the customer is at fault but the fault lies elsewhere in the system, then also the bank shall compensate the customers (up to a limit) as part of a Board approved customer relations policy. G. Ensuring Reasonableness of Bank Charges 83. The bank shall adopt the following principles for ensuring reasonableness of bank charges: : (1) The bank shall identify basic banking services based on the following broad parameters: (i) Nature of transactions (a) Banking services that are ordinarily availed by individuals in the middle and lower segments, will be the first parameter. These will comprise services related to deposit / loan accounts, remittance services and collection services. (b) When the above transactions occur in different delivery channels, for the purpose of pricing, they may be treated on a separate footing. (ii) Value of transactions (a) Low value of transactions with customers/public up to the ceiling as given below will be the second parameter: - Remittances up to ₹10,000/- in each instance - Collections below ₹10,000/- in each instance (Foreign exchange transactions valued up to $500/-) (iii) Based on the above-mentioned two parameters, an illustrative list of services is given below. The list of services identified is only an indicative one and the bank may, at its discretion, include within the category of basic services such additional services as it may consider appropriate. Table 3
Illustrative List of Services | | Sr.No. | Type of service | | (A) Service relating to deposit accounts | | 1 | Cheque book facility | | 2 | Issue of Pass Book (or Statement)/Issue of Balance Certificate | | 3 | Issue of duplicate pass book or statement | | 4 | ATM Cards | | 5 | Debit cards (electronic cheque) | | 6 | Stop payment | | 7 | Balance enquiry | | 8 | Account closure | | 9 | Cheque Return – Inward (cheque received for payment) | | 10 | Signature verification | | (B) Relating to Loan Accounts | | 11 | No dues certificate | | (C) Remittance Facilities (including through other banks) (Rupee or foreign exchange) | | 12 | Demand Draft- Issue | | 13 | Demand Draft- Cancellation | | 14 | Demand Draft- Revalidation | | 15 | Demand Draft- Duplicate Issuance | | 16 | Payment Order – Issue | | 17 | Payment Order – Cancellation | | 18 | Payment Order – Revalidation | | 19 | Payment Order – Duplicate Issuance | | 20 | Telegraphic Transfer – Issue | | 21 | Telegraphic Transfer-Cancellation | | 22 | Telegraphic Transfer – Duplicate Issuance | | 23 | Payment by Electronic Clearing Services (ECS) | | 24 | Transfer by National Electronic Fund Transfer (NEFT) and Electronic Funds Transfer (EFT) | | (D) Collection facilities | | 25 | Collection of Local cheques | | 26 | Collection of Outstation cheques | | 27 | Cheque Return-Outward (cheque deposited for collection) | (2) The bank shall make available the basic banking services at reasonable prices / charges and towards this, basic services shall be delivered outside the scope of the bundled products. (3) The bank shall follow the following principles for ensuring reasonableness in fixing and communicating the service charges: (i) For basic services to individuals, the bank shall levy charges at the rates that are lower than the rates applied when the same services are given to non-individuals. (ii) For basic services rendered to special category of individuals (such as individuals in rural areas, pensioners and senior citizens), the bank shall levy charges on more liberal terms than the terms on which the charges are levied to other individuals. (iii) For the basic services rendered to individuals, the bank shall levy charges only if the charges are just and supported by reason. (iv) For the basic services to individuals, the bank shall levy services charges ad-valorem only to cover any incremental cost and subject to a cap. (v) The bank shall provide to the individual customers upfront and in a timely manner, complete information on the charges applicable to all basic services. (vi) The bank shall provide advance information to the individual customers about the proposed changes in the service charges. (vii) The bank shall collect for services given to individuals only such charges which have been notified to the customer. (viii) The bank shall inform the customers in an appropriate manner recovery of service charges from the account or the transaction. (ix) The bank shall without fail inform the customers in all cases when a transaction initiated by the bank itself results in or is likely to lead to a shortfall in the minimum balance required to be maintained. (4) The bank shall take steps to ensure that customers are made aware of the service charges upfront and changes in the service charges are implemented only with the prior notice to the customers. (5) Full-fledged information on bank products and their implications shall be disclosed to the customers so that the customers can make an informed judgment about their choice of products. 84. The bank shall follow a uniform, fair and transparent pricing policy and not discriminate between their customers at home branch and non-home branches. A service provided free at home branch shall be available free at non home branches also. There shall be no discrimination as regards intersol charges (being the charges levied by the bank to cover the cost of extending services to customers by using the CBS / Internet / Intranet platform) between similar transactions done by customers at home branch and those done at non-home branches. Further, the bank shall not include cash handling charges under intersol charges. G.1 Charges for Sending SMS Alerts 85. The bank shall leverage the technology available with it and the telecom service provider(s) to ensure that charges levied by bank for sending SMS alerts to customers are levied on all customers on actual usage basis. H. Advisory Regarding Opening Joint Bank Account and Nomination Thereof by Persons of Queer Community 86. Department of Financial Services (DFS), Ministry of Finance, Government of India, had vide an advisory clarified that in connection with Hon'ble Supreme Court of India's judgement dated 17.10.2023 in the case of Supriyo @Supriya Chakraborty and another Vs. Union of India (Writ Petition Civil No. 1011/2022), there are no restrictions for persons of the Queer community to open a joint bank account and also to nominate a person in queer relationship as a nominee to receive the balance in the account, in the event of death of the account holder. The bank shall therefore display the above advisory issued by DFS on the notice board of their branches, including in vernacular language for wider outreach. Chapter V - Financial Inclusion A. Financial Inclusion - Access to Banking Services – Basic Savings Bank Deposit Account (BSBDA) 87. The Basic Savings Bank Deposit (BSBD) Account is designed as a savings account to offer certain minimum facilities, free of charge, to the holders of such accounts. The bank shall offer the following basic minimum facilities under the BSBD Account, free of charge, without imposing any requirement for maintaining a minimum balance. (1) The deposit of cash at bank branch as well as ATMs/CDMs (2) Receipt / credit of money through any electronic channel or by means of deposit / collection of cheques drawn by Central / State Government agencies and departments (3) No limit on number and value of deposits that can be made in a month (4) Minimum of four withdrawals in a month, including ATM withdrawals (5) ATM Card or ATM-cum-Debit Card. 88. The BSBD Account shall be considered a normal banking service available to all. 89. The bank is free to provide additional value-added services, including issue of cheque book, beyond the above minimum facilities, which may / may not be priced (in non-discriminatory manner) subject to disclosure. The availment of such additional services shall be at the option of the customers. However, while offering such additional services, the bank shall not require the customer to maintain a minimum balance. Offering such additional services will not make it a non-BSBD Account, so long as the prescribed minimum services are provided free of charge. 90. The holders of BSBD Account shall not be eligible for opening any other savings bank deposit account in that bank. Customers having any other existing savings bank deposit account in that bank shall be required to close it within 30 days from the date of opening a BSBD Account. The bank shall take a declaration from the customers that they are not having a BSBD account in any other bank, before opening a BSBD account. 91. The BSBD Account shall be subject to RBI instructions on KYC/AML for opening of bank accounts issued vide Reserve Bank of India (Regional Rural Banks – Know Your Customer) Directions, 2025, as amended from time to time. 92. The instructions issued on free transactions available for normal savings bank account in own-bank / other bank ATMs vide circulars DPSS.CO.PD.No.316/02.10.002/2014-15 dated August 14, 2014 and DPSS.CO.PD.No.659/02.10.002/2014-15 dated October 10, 2014 are not applicable to BSBD accounts. The minimum free withdrawals available to the BSBD Account holders can be made at all ATMs (own-bank / other bank ATMs). 93. The bank is advised to frame Board approved policy / operational guidelines in this regard. B. Guidelines for the purpose of opening/ operating bank accounts of Persons with Autism, Cerebral Palsy, Mental Retardation, Mental Illness and Mental Disabilities 94. The following guidelines shall be applicable for the purpose of opening / operating bank accounts of the above persons: (1) The National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 provides a law relating to certain specified disabilities. Clause (j) of Section 2 of that Act defines a “person with disability” to mean a person suffering from any of the conditions relating to autism, cerebral palsy, mental retardation or a combination of any two or more of such conditions and includes a person suffering from severe multiple disabilities. This Act empowers a Local Level Committee to appoint a guardian, to a person with disabilities, who shall have the care of the person and property of the disabled person. (2) The bank is advised to take note of the legal position stated above and may rely on and be guided by the orders / certificates issued by the competent authority, under the respective Acts, appointing guardians / managers for the purposes of opening / operating bank accounts. In case of doubt, care may be taken to obtain proper legal advice. Further, the extant instructions are not intended to mandate banks to insist on appointment of a guardian as a matter of routine from every person “who is in need of treatment by reason of any mental disorder”. The bank shall not insist on guardianship certificate from all mentally ill persons and seek appointment of a guardian only in such cases where they are convinced on their own or based on documentary evidence available, that the concerned person is mentally ill and is not able to enter into a valid and legally binding contract. 95. The bank shall ensure that its branches give proper guidance to their customers so that the guardians / managers of the disabled persons do not face any difficulties in this regard. 96. The following is also clarified as under: (1) Legal Guardian cannot be authorised to appoint a nominee for any bank account of a person with Autism, Cerebral Palsy, Mental Retardation & Multiple Disabilities. As per the provisions, Legal Guardian is always supposed to work in the interest of the person with such disabilities and no such interest can be served by way of nomination where the nominee gets the benefits after death of the person with disability. (2) Regarding the process for settlement of claim in case of death of the account holder in the absence of nomination, usual prevalent rules and laws will apply since there is no provision in this regard in the National Trust Act, 1999. (3) In case of death of legal guardian, a new guardian may be appointed by the Local Level Committee under the provisions of the National Trust Act, 1999. In the interim period till the new guardian is appointed, operation in the bank account may be suspended. C. Banking facilities to visually challenged / persons with disabilities 97. The bank shall strictly adhere to instructions given below and extend all banking facilities to persons with blindness, low-vision and other disabilities. (1) The bank shall offer all banking facilities such as cheque book facility including third party cheques, ATM facility, Net banking facility, locker facility, retail loans, credit cards etc., to visually challenged persons without any discrimination as they are legally competent to contract. (2) The bank shall take necessary steps to provide all existing ATMs / future ATMs with ramps and to make at least one third of new ATMs installed as talking ATMs with Braille keypads. They shall place them strategically in consultation with other banks to ensure that at least one talking ATM with Braille keypad is generally available in each locality for catering to needs of visually impaired persons. The bank may also bring the locations of such talking ATMs to the notice of its visually impaired customers. (3) The bank shall take necessary steps to provide all existing ATMs / future ATMs with ramps so that wheel chair users / persons with disabilities can easily access them and also make arrangements in such a way that the height of the ATM does not create an impediment in its use by a wheelchair user. (4) The bank shall also take appropriate steps including providing ramps at the entrance of the bank branches so that the persons with disabilities / wheel chair users can enter the bank branches and conduct business without much difficulty. D. Operation of Accounts by Old & Incapacitated Persons D.1 Types of sick / old / incapacitated account holders 98. The cases of sick / old / incapacitated account holders fall into following categories: (1) An account holder who is too ill to sign a cheque / cannot be physically present in the bank to withdraw money from his bank account but can put his / her thumb impression on the cheque / withdrawal form; (2) An account holder who is not only unable to be physically present in the bank but is also not even able to put his / her thumb impression on the cheque / withdrawal form due to certain physical incapacity. D.2 Operational Procedure 99. With a view to enabling the old / sick account holders operate their bank accounts, the bank shall follow the procedure as under: (1) Wherever thumb or toe impression of the sick / old / incapacitated account holder is obtained, it shall be identified by two independent witnesses known to the bank, one of whom shall be a responsible bank official. (2) Where the customer cannot even put his / her thumb impression and also would not be able to be physically present in the bank, a mark can be obtained on the cheque / withdrawal form which shall be identified by two independent witnesses, one of whom shall be a responsible bank official. (3) The customer may also be asked to indicate to the bank as to who would withdraw the amount from the bank on the basis of cheque / withdrawal form as obtained above and that person shall be identified by two independent witnesses. The person who would be actually drawing the money from the bank shall be asked to furnish his / her signature to the bank. D.3 Opinion of IBA in case of a person who cannot sign due to loss of both hands 100. Opinion obtained by the Indian Banks’ Association from their consultant on the question of opening of a bank account of a person who has lost both his hands and could not sign the cheque / withdrawal form is as under: 101. “In terms of the General Clauses Act, the term “Sign” with its grammatical variations and cognate expressions, shall with reference to a person who is unable to write his name, include “mark” with its grammatical variations and cognate expressions. The Supreme Court has held in AIR 1950 – Supreme Court, 265 that there must be physical contact between the person who is to sign and the signature can be by means of a mark. This mark can be placed by the person in any manner. It could be the toe impression, as suggested. It can be by means of a mark which anybody can put on behalf of the person who has to sign, the mark being put by an instrument which has had a physical contact with the person who has to sign”. E. Banking Facility for Senior Citizens and Differently abled Persons 102. The bank shall put in place appropriate mechanism with the following specific provisions for meeting the needs of senior citizen and differently abled customers so that they are able to avail of the bank’s services without difficulty. E.1 Dedicated Counters / Preference to Senior Citizens, Differently abled persons 103. The bank shall provide a clearly identifiable dedicated counter or a counter which provides priority to senior citizens and people who are differently abled including visually impaired persons. E.2 Ease of submitting Life Certificate 104. The bank shall ensure that when a Life Certificate is submitted in any branch, including a non-home branch, of the pension paying bank, the same is updated / uploaded promptly in CBS by the receiving branch itself, to avoid any delay in credit of pension. E.3 Cheque Book Facility 105. The bank shall issue cheque books to customers, whenever a request is received, through a requisition slip which is part of the cheque book issued earlier. 106. The bank shall provide minimum 25 cheque leaves every year, if requested, in savings bank account, free of charge. 107. The bank shall not insist on physical presence of any customer including senior citizens and differently abled persons for getting cheque books. 108. The bank shall issue cheque books, on requisition, by any other mode as per the bank’s laid down policy. Providing such facility in BSBDA will not render the account to be classified as non-BSBDA as detailed at paragraph 89 of this chapter. E.4 Automatic conversion of status of accounts 109. The bank shall convert a fully KYC compliant account automatically into a ‘Senior Citizen Account’ based on the date of birth available in the bank’s records. E.5 Additional Facilities to visually impaired customers 110. The facilities provided to sick / old / incapacitated persons vide paragraphs 98 to 101 of these directions by the bank (regarding operations of accounts through identification of thumb / toe impression / mark by two independent witnesses and authorising a person who would withdraw the amount on behalf of such customers) shall also be extended to the visually impaired customers. E.6 Ease of filing Form 15G/H 111. The bank shall provide senior citizens and differently abled persons Form 15G/H once in a year (preferably in April) to enable them to submit the same, where applicable, within the stipulated time. E.7 Doorstep Banking Services for Senior Citizens and Differently Abled Persons 112. The bank shall make concerted efforts to offer certain basic banking services to senior citizens of more than 70 years of age and differently abled persons at the doorstep of such customers. 113. The bank shall incorporate the following aspects in their Board approved policy for such services and report the progress made in this regard to the Customer Service Committee of the Board every quarter: (1) The bank shall offer the doorstep banking services on pan India basis. The bank shall develop a Board approved framework for determining the nature of branches / centres where these services will be provided mandatorily and those where it will be provided on a best effort basis and make the policy public. The list of branches offering such doorstep banking services shall be displayed / updated on the bank’s website regularly. (2) The bank shall give adequate publicity to the availability of these services in their public awareness campaigns. The charges, in this regard, shall also be prominently indicated in brochures and published in its website. E.8 Compliance with Hon’ble Supreme Court Order dated April 30, 2025 in the matter of Pragya Prasun and Ors. vs Union of India (W.P.(C) 289 of 2024) and Amar Jain vs Union of India & Ors. (W.P.(C) 49 of 2025) 114. Attention of the bank is drawn to the Order of the Hon’ble Supreme Court dated April 30, 2025 in the matter of Pragya Prasun and Ors. vs. Union of India (W.P.(C) 289 of 2024) and Amar Jain vs. Union of India & Ors. (W.P.(C) 49 of 2025). The bank shall undertake appropriate measures to ensure compliance with the above Supreme Court Order, as applicable. F. Display of information regarding Local Level Committees set up under the National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 115. The bank shall ensure that its branches display in a conspicuous place the following information in the local language and English/Hindi (or both): (1) essential details about the facilities under the enactment (Mental Disabilities Act); (2) the fact that the parties can approach the Local Level Committees, for the purpose of issuance of the certificate and that the certificate issued under the Mental Disabilities Act is acceptable; and (3) the details of the Local Level Committees in that area. Chapter VI - Payments and Clearing services A. Remittance A.1 Demand Drafts A.1.1 Issue of Demand Drafts 116. The bank shall ensure that demand drafts of ₹20,000/- and above are issued invariably with account payee crossing. Necessary changes in system and procedures to speed up issue and payment of drafts should be taken. As per the provision of Section 269-T of the Income Tax Act, 1961, as amended by Direct Tax Laws (Amendment) Act, 1987, with effect from 1 April 1989, the bank shall repay any deposit otherwise than by an account payee cheque or an account payee bank draft, if the deposit together with interest, if any, payable thereon or the aggregate of the deposits held by a person together with interest, if any, payable on such deposits is ₹20,000/- or more. The repayment of the deposit by the branch of a banking company or co-operative bank can also be made by crediting the amount of such deposit to the savings bank account or the current account (if any) with such branch of the person to whom such deposit is to be repaid. In cases of failure to comply with the aforesaid provisions, penalty amounting to a sum equal to the amount of the deposit shall be imposed under Section 271-E of the Income Tax Act. 117. Measures seeking to bring down the incidence of frauds perpetrated through bank drafts shall be built into the draft form itself. All superscriptions about validity of the demand draft should be provided at the top of the draft form. A draft should be uniformly valid for a period of three months and procedure for revalidation after three months should be simplified. 118. The bank shall ensure that drafts of small amounts are issued by its branches against cash to all customers irrespective of the fact whether they are having accounts with the bank or not. Staff at the bank branch counter shall not refuse to accept small denomination notes from the customers (or non-customers for issuance of the drafts). A.1.2 Encashment of drafts 119. The bank shall ensure that drafts drawn on its branches are paid immediately. Payment of draft shall not be refused for the only reason that relative advice has not been received. A.1.3 Issue of Duplicate Demand Draft 120. Duplicate draft, in lieu of lost draft, up to and including ₹5,000/- may be issued to the purchaser on the basis of adequate indemnity and without insistence on seeking non payment advice from drawee office irrespective of the legal position obtaining in this regard. 121. The bank shall issue duplicate Demand Draft to the customer within a fortnight from the receipt of such request. Further, for the delay beyond this stipulated period, the bank shall pay interest at the rate applicable for fixed deposit of corresponding maturity in order to compensate the customer for such delay. The period of fortnight prescribed would be applicable only in cases where the request for duplicate demand draft is made by the purchaser or the beneficiary and would not be applicable in the case of third party endorsements. 122. Regarding the term "customer" used above and whether it would include only purchaser / beneficiary or also include any holder of the instrument other than the purchaser or the beneficiary, the above instructions shall be applicable only in cases where the request for duplicate demand draft is made by the purchaser or the beneficiary and would not be applicable in the case of draft endorsed to third parties. B. Cheque Drop Box Facility and the Facility for Acknowledgement of Cheques 123. The bank shall not compel customers to drop the cheques in the drop box and while the cheque drop box facility may be made available to the customers, the facility for acknowledgement of the cheques at the regular collection counters shall also be available to the customers. No branch shall refuse to give an acknowledgement if the customer tenders the cheque at the counters. 124. Wherever the cheque drop box facility has been introduced, it is necessary that customer is made aware of both the options available to him, i.e., dropping cheques in the drop box or tendering them at the counters so that he / she can take an informed decision in this regard. Therefore, the bank shall display on the Cheque Drop-Box itself that "Customers can also tender the cheques at the counter and obtain acknowledgement on the pay-in-slips". The above message shall be displayed in English, Hindi and the concerned regional language of the State. C. Collection of Instruments C.1 Bills for collection 125. Bills for collection including bills discounted required to be collected through another bank at the realising centre shall be forwarded directly by the forwarding office to the realising office. C.2 Payment of interest for Delays in collection of bills 126. The lodger's bank shall pay interest to the lodger for the delayed period in respect of collection of bills at the rate of 2 percent p.a. above the rate of interest payable on balances of Savings Bank accounts. The delayed period shall be reckoned after making allowance for normal transit period based upon a time frame of two days each for (i) Despatch of bills, (ii) Presentation of bills of drawees, (iii) Remittance of proceeds to the lodger's bank, and (iv) Crediting the proceeds to drawer's account. 127. To the extent the delay is due to the drawee's bank, the lodger's bank may recover interest for such delay from that bank. The bank shall suitably revise the format of its payment advices to incorporate the above information. D. Dishonour of Cheques – Procedure thereof D.1 Information on dishonoured cheques 128. Data in respect of each dishonoured cheque for amount of ₹1 crore and above shall be made part of the bank's MIS on constituents and concerned branches shall report such data to their respective Regional Office / Head Office. 129. Data in respect of cheques drawn in favour of stock exchanges and dishonoured shall be consolidated separately by the bank irrespective of the value of such cheques as a part of its MIS relating to broker entities and be reported to its respective Head Office / Central Office. D.2 Dealing with incidents of frequent dishonour of cheques of value ₹1 crore and above 130. The bank shall introduce a condition for operation of accounts with cheque facility that in the event of dishonour of a cheque valuing ₹1 crore and above drawn on a particular account of the drawer on four occasions during the financial year for want of sufficient funds in the account, no fresh cheque book would be issued. Also, the bank may consider closing current account at its discretion. However, in respect of advances accounts such as cash credit account, overdraft account, the need for continuance or otherwise of these credit facilities and the cheque facility relating to these accounts shall be reviewed by appropriate authority higher than the sanctioning authority. 131. For the purposes of introduction of the condition mentioned at paragraph 130 above in relation to operation of the existing accounts, the bank shall, at the time of issuing new cheque book, issue a letter advising the constituents of the new condition. 132. If a cheque is dishonoured for a third time on a particular account of the drawer during the financial year, the bank shall issue a cautionary advice to the concerned constituent drawing his attention to aforesaid condition and consequential stoppage of cheque facility in the event of cheque being dishonoured on fourth occasion on the same account during the financial year. Similar cautionary advice shall be issued if the bank intends to close the account. D.3 Dealing with frequent dishonour of cheques of value of less than ₹1 crore 133. The bank shall have a Board approved policy for dealing with frequent dishonour of cheques of value of less than ₹1 crore. The policy shall also deal with matters relating to frequent dishonour of ECS mandates. D.4 General 134. For the purpose of adducing evidence to prove the fact of dishonour of cheque on behalf of a complainant (i.e., payee / holder of a dishonoured cheque) in any proceeding relating to dishonoured cheque before a court, consumer forum or any other competent authority, the bank shall extend full co-operation, and shall furnish him / her documentary proof of fact of dishonour of cheques. 135. The bank shall place before its Audit / Management Committee, every quarter, consolidated data in respect of the matters referred to above. D.5 Framing appropriate procedure for dealing with dishonoured cheques 136. The bank shall also adopt, with the approval of its Board, appropriate procedure for dealing with dishonoured cheques with inherent preventive measures and checks to prevent any scope for collusion of the staff of the bank or any other person, with the drawer of the cheque for causing delay in or withholding the communication of the fact of dishonour of the cheque to the payee / holder or the return of such dishonoured cheque to him / her. Determination of response to dishonour of cheques of the account holders has been left to the discretion of the bank. The bank shall put in place an appropriate policy approved by the Board or its Committee taking into consideration the need to prevent misuse of the cheque drawing facility and avoid penalising customers for unintended dishonour of cheques. This policy shall be transparent, made known to every customer upfront and implemented fairly. 137. The bank shall also lay down requisite internal guidelines for its officers and staff. They may be advised to adhere to such guidelines and ensure strict compliance thereof to achieve aforesaid object of effective communication and delivery of dishonoured cheque to the payee. E. Other cheque related instructions E.1 Writing the cheques in any language 138. All cheque forms shall be printed in Hindi and English. The customer may, however, write cheques in Hindi, English or in the concerned regional language. E.2 Acceptance of cheques bearing a date as per National Calendar (Saka Samvat) for payment 139. Government of India has accepted Saka Samvat as National Calendar with effect from 22 March 1957 and all Government statutory orders, notifications, Acts of Parliament, etc. bear both the dates i.e., Saka Samvat as well as Gregorian Calendar. An instrument written in Hindi having date as per Saka Samvat calendar is a valid instrument. Cheques bearing date in Hindi as per the National Calendar (Saka Samvat) should, therefore, be accepted by the bank for payment, if otherwise in order. The bank can ascertain the Gregorian calendar date corresponding to the National Saka calendar in order to avoid payment of stale cheques. F. Misuse of Banking Channels - Issue and Payment of Demand Drafts for ₹50,000/- and above 140. The bank shall issue demand drafts, mail transfers, telegraphic transfers and travellers cheques for ₹50,000/- and above only by debit to the customer's account or against cheques or other instruments tendered by the purchaser and not against cash payment. Chapter VII - Deposit accounts and other liabilities A. Opening / Operation of Deposit Accounts A.1 Customer Identification Procedure for individual accounts 141. The bank shall be generally guided by RBI instructions on KYC / AML for opening of accounts. A.2 Opening of Joint Bank Account by Persons of Queer Community 142. There are no restrictions for persons of the Queer community to open a joint bank account. A.3 Photographs of depositors 143. The bank should obtain and keep on record photographs of all depositors / account holders in respect of accounts opened by them subject to the following clarifications: (1) The instructions cover all types of deposits including fixed, recurring, cumulative, etc. (2) They apply to all categories of depositors, whether resident or non-resident. Only banks, Local Authorities and Government Departments (excluding public sector undertakings or quasi-Government bodies) will be exempt from the requirement of photographs. (3) The bank may not insist on photographs in case of accounts of staff members only (Single / Joint). (4) The bank should, without exception, obtain photographs of all persons authorised to operate the accounts, viz., Savings Bank and Current Accounts without exception. (5) The bank should also obtain photographs of the 'Pardanishin' women. (6) The bank may obtain two copies of photographs and refrain from obtaining photocopies of driving licence / passport containing photographs, in place of photographs, which will not suffice. (7) The bank should not ordinarily insist on the presence of account holder for making cash withdrawals in case of 'self' or 'bearer' cheques unless the circumstances so warrant. The bank should pay 'self' or 'bearer' cheques taking usual precautions. (8) Photographs shall not be treated as a substitute for specimen signatures. (9) The bank shall obtain only one set of photographs and shall not insist upon obtention of separate photographs for each category of deposit. Only one set of photographs need be obtained and separate photographs should not be obtained for each category of deposit. The applications for different types of deposit accounts should be properly referenced. (10) Fresh photographs need not be obtained when an additional account is desired to be opened by the account holder. (11) In the case of operative accounts, viz., Savings Bank and Current accounts, photographs of persons authorised to operate them shall be obtained. In case of other deposits, viz., Fixed, Recurring, Cumulative, etc., photographs of all depositors in whose names the deposit receipt stands shall be obtained except in the case of deposits in the name of minors where guardians' photographs shall be obtained. A.4 Terms and Conditions 144. The instructions regarding terms and conditions for deposit accounts shall be as below: (1) The bank will advise a customer the relevant terms and conditions governing the operations of the deposit account when the account is opened for the first time. (2) Change in terms and conditions: (i) Normally, changes will be made with prospective effect giving notice of one month. (ii) If the bank has made any change without notice it will notify the change within 30 days. If such change is to customer's disadvantage, the customer may within 60 days and without notice, close his / her account or switch it without having to pay any extra charges or interest. (iii) If the bank has made a major change or a lot of minor changes in any one year, the bank will, on request, give the customer a copy of the new terms and conditions or a summary of the changes. A.4.1 Closure of Accounts 145. Under normal circumstances, the bank will not close customer's account without giving the customer, at least, 30 days’ notice. Examples of circumstances, which are not 'normal', include improper conduct of account, etc. In all such cases, the customer will be required to make alternative arrangements for cheques already issued and desist from issuing any fresh cheques on such account. A.4.2 Closure or Shifting of Branch 146. If the bank plans to close a branch or if the bank shifts a branch, the bank will give to the customers: (1) Notice of three months if there is no other branch of any bank functioning at that centre and inform the customer how the bank will continue to provide banking services to the customer; and (2) Notice of two months, if there is a branch of any other bank functioning at that centre. A.5 Types of Deposit Accounts 147. A depositor may open the following types of the account with the bank: (1) Savings Bank Account (2) Current Deposit Account with or without overdraft facility. (3) Term Deposit Account 148. 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 him / her and the final decision of the bank will be conveyed at the earliest to him / her. A.6 Current Deposit Account 149. Minimum balance stipulated from time to time will be required to be maintained. 150. The bank shall be permitted to levy the following charges in the current account: (1) Ledger Folio Charges (i) Per ledger page containing 25 entries (40 in case of computer entries) as specified by the bank. (ii) Current accounts maintaining good credit balance are given following exemption (The bank to specify exact amounts / folios from time to time; illustration is given below): | Table 4 | | Average Credit Balance | Free Folios (No.) | | Upto ₹25,000/- | Nil | | Above ₹25,000/- & Up to ₹50,000/- | 3 | | Above ₹50,000/- & up to ₹1 lakh | 5 | | Above ₹1 lakh & up to ₹2 lakh | 10 | | Above ₹2 lakh | No folio charges | (iii) The charges will be recovered during the month of March every year or at the close of account in case the account is closed earlier. (2) Cheque - Book Charges: Per leaf / book charges as may be prescribed by the bank. (3) Stop Payment Instructions: Charges per instrument as may be prescribed by the bank. (4) Duplicate Statement: Charges per ledger page or part thereof or as may be prescribed by the bank. For account maintained on computer, 40 entries (as specified by the bank) or part thereof be treated as one ledger page. (5) Non-maintenance of Minimum Balance: In addition to the levy of ledger folio charges, a charge as specified by the bank on each occasion will be recovered when the balance falls below the minimum stipulated balance. (6) Return of Cheques sent in Clearing or Collection: When the cheque is returned due to insufficient funds, a charge as specified by the bank will be recovered from the account for every instrument returned in clearing, in addition to other charges. A.7 Saving Bank Deposit Accounts 151. These accounts can be opened by eligible person/s and certain organizations / agencies prescribed in Reserve Bank of India (Regional Rural Banks – Interest Rate on Deposits) Directions, 2025. A.7.1 Who Can Open the Account 152. A person in his / her own name. 153. By two or more persons in their joint names and account to be operated as under: (1) Both or all of them or the survivor/s or survivor/s of them; or (2) Either or any one of them or more of them or the survivor/s or survivor/s of them; or (3) Former / latter or survivor or a particular person during his / her life time or survivors jointly or survivor/s. 154. Account may be opened in the names of illiterate or blind persons or in the names of, or on behalf of minors either singly or jointly. The special provision applicable to such account may be ascertained from the bank. A.7.2 Mode of Depositing Money 155. A depositor may deposit money as often as he / she wishes. The amount should be deposited along with pay-in-slip duly completed when the counterfoil of the pay-in-slip will be returned to the tenderer duly receipted. A.7.3 Mode of withdrawing Money other than by Cheque 156. When a depositor wishes to withdraw money, other than by cheque book, they shall present their pass-book personally along with a withdrawal form prescribed by the bank duly completed. 157. Payment of Savings Bank withdrawal forms to third parties even if they are accompanied by pass books is not permitted. However, certain relaxations have been allowed for the Savings Bank Accounts of pensioners / old / sick / incapacitated customers who cannot come to bank personally to withdraw money. A.7.4 Withdrawal by Cheque 158. In the case of cheque book operated accounts, withdrawals are allowed in the cheque forms supplied by the bank. Cheque books will normally be issued to a depositor against an application signed by him / her on the bank's requisition slip from the cheque book in his / her use. 159. Normally, the bank will be supplying three cheque books containing 10 / 25 leaves each to Savings Bank account holder free of charge in a calendar year. For additional cheque books at such notified centre, charge will be levied by the bank as prescribed from time to time. 160. The bank may refuse payment of cheques that have been altered in any way unless the alteration is authenticated by the drawer under their signature. Cheque should be drawn in such a way as to prevent alteration after issue and the drawer's signature should conform with that on record at the bank. A.7.5 Limitations on Deposit and Withdrawals 161. A small sum as specified by the bank can be accepted at the time of opening a Savings Bank Account and thereafter, no deposit for less than ₹10/- shall be accepted. 162. Cheques, drafts, dividend warrants and other instruments drawn in favour of the depositor will be accepted for credit of accounts. Third party instruments endorsed to the depositors will not be collected on behalf of the Savings Bank Account holders. 163. A Saving Bank Account holder will not be permitted more than 75 debits on his / her account in a half-year. The bank will levy charge at a specified rate per debit for exceeding stipulated 75 debits in a half-year. 164. A depositor cannot withdraw a sum less than ten rupees, nor any sum which is not in multiple of ₹5/- unless the account is to be closed in which case entire balance at credit of the account will be withdrawn. A.7.6 Closing of an Account 165. A depositor wishing to close their account should present their pass book in order that amount of interest due on the account may be entered therein and the final balance struck. The amount will be then paid to the depositor and cancelled but completed pass book will be returned to them for their record. The unused cheque forms, if any, in their possession should also be returned to the bank. 166. The bank will register instructions from drawer regarding cheque lost, stolen, etc., but cannot guarantee depositors against loss in such cases in the event of such cheques being paid. Charges for stop payment instructions will be levied as specified by the bank. A.7.7 Facility to Visually Challenged Persons 167. The bank will open a deposit account in the name of visually challenged persons to be operated singly or jointly with others or in the name of sole proprietorship concerns / firms / partnerships where a visually handicapped person/s is / are involved. The blind persons may operate the account singly (i.e., through Power of attorney) or jointly with any other person. The Power of Attorney should be duly notarised or attested by a Magistrate. A.8 Minimum balance in savings bank accounts 168. The bank shall at the time of opening the accounts, inform its customers in a transparent manner, the requirement of maintaining minimum balance and details of charges, if any, due to non-maintenance of the same. The bank shall inform, at least one month in advance, the existing account holders of any change in the prescribed minimum balance and the charges that may be levied if the prescribed minimum balance is not maintained. A.8.1 Levy of penal charges on non-maintenance of minimum balances in savings bank accounts 169. While levying charges for non-maintenance of minimum balance in savings bank account, the bank shall adhere to the guidelines given below: (1) In the event of a default in maintenance of minimum balance / average minimum balance as agreed to between the bank and customer, the bank should notify the customer clearly by SMS / email / letter etc. that in the event of the minimum balance not being restored in the account within a month from the date of notice, penal charges will be applicable. (2) In case the minimum balance is not restored within a reasonable period, which shall not be less than one month from the date of notice of shortfall, penal charges may be recovered under intimation to the account holder. (3) The policy on penal charges to be so levied may be decided with the approval of the Board of the bank. (4) The penal charges should be directly proportionate to the extent of shortfall observed. In other words, the charges should be a fixed percentage levied on the amount of difference between the actual balance maintained and the minimum balance as agreed upon at the time of opening of account. A suitable slab structure for recovery of charges may be finalised. (5) It should be ensured that such penal charges are reasonable and not out of line with the average cost of providing the services. (6) It should be ensured that the balance in the savings account does not turn into negative balance solely on account of levy of charges for non-maintenance of minimum balance. 170. These guidelines shall be brought to the notice of all customers apart from being disclosed on the bank's website. A.9 Purchase of Local Cheques, Drafts, etc., during suspension of Clearing 171. Whenever clearing is suspended and it is apprehended that the suspension may be prolonged, the bank may temporarily accommodate its constituents, both borrowers and depositors, to the extent possible by purchasing the local cheques, drafts, etc., deposited in their accounts for collection, special consideration being shown in respect of cheques drawn by Government departments / companies of good standing and repute, as also demand drafts drawn on local banks. While extending this facility, the bank should take into consideration such factors as creditworthiness, integrity, past dealings and occupation of the constituents, so as to guard itself against any possibility of such instruments being dishonoured subsequently. A.10 Statement of Accounts / Passbooks 172. The bank shall invariably offer passbook facility to all its savings bank account-holders (individuals). The cost of providing such passbooks shall not be recovered from the customers. 173. The pass-book must be presented for withdrawal other than by cheques. Deposits may be made without production of pass-book, but the pass book shall be sent to the bank for completion as soon as possible. When pass-book is returned duly completed, the depositor shall examine the entries carefully and draw the bank's attention to any error or omission that might be discovered. 174. The depositors are advised to keep their pass-books in a safe place. The bank shall not be held responsible for any loss or incorrect payment attributable to the neglect of this rule. Any change in the address of the depositor should be immediately intimated to the bank in his / her own interest. 175. In case of loss of the pass-book, the customer can obtain duplicate pass-book paying a service charge as specified by the bank. A.10.1 Updating passbooks 176. Customers should be made aware of the importance of regularly updating their passbook and employees shall be encouraged to give due importance to this area. Paper tokens indicating the date of receipt of the pass-book and also the date when it is to be collected shall be issued, in cases where the pass-books are held back for updation. A printed slip requesting the depositor to tender their pass-books periodically shall be given in cases where a passbook is tendered for posting after a long interval of time or after very large number of transactions. A.10.2 Entries in passbooks / statement of accounts 177. The bank should give constant attention to ensure entry of correct and legible particulars in the pass books and statement of accounts. 178. The banks often show the entries in depositors' passbooks / statements of accounts, as "by clearing" or "by cheque". Further, it is observed that in the case of Electronic Clearing System (ECS) and RBI Electronic Fund Transfer (RBIEFT), the banks generally do not provide any details even though brief particulars of the remittance are provided by the receiving bank. In some cases, computerised entries use codes which just cannot be deciphered. With a view to avoiding inconvenience to depositors, the bank should avoid such inscrutable entries in passbooks / statement of accounts and ensure that brief, intelligible particulars are invariably entered in passbooks / statement of account. A.10.3 Maintenance of savings bank pass books: precautions 179. The bank shall exercise the following precautions to obviate fraudulent withdrawals from the relative accounts due to negligence in taking adequate care of the custody of savings bank pass books. (1) Branches shall accept the pass books and return them against tokens. (2) Pass books retained at the branches overnight shall be held under lock and key in due custody. A.10.4 Providing monthly statement of accounts 180. The bank shall adhere to monthly periodicity while sending statement of accounts. 181. Further, the bank shall advise its branch Inspecting Officers to carry out sample check at the time of internal inspection to verify whether the statements are being despatched in time. A.10.5 Recording of Details of Transactions in Passbook/ Statement of Account 182. Constant attention shall be given to ensure entry of correct and legible particulars in the pass books and statement of accounts. The bank shall avoid inscrutable entries in pass books / statement of accounts and ensure that brief, intelligible particulars are invariably entered in pass books / statements of account. 183. The bank shall at a minimum provide the relevant details in respect of entries in the accounts as illustrated (the list is indicative and not exhaustive) below: Table 5
Illustrative debit entries in pass books / statements of account | | | Debit entries | | a. | Payment to third parties | (i) Name of the payee
(ii) Mode – Transfer, clearing, inter-branch, RTGS/ NEFT, cash, cheque (number)
(iii) Name of the transferee bank, if the payment is made through clearing/ inter-branch transaction/ RTGS/ NEFT | | b. | Payment to ‘self’ | (i) Indicate “Self” as payee
(ii) Name of the ATM/ branch if the payment is made by ATM/ another branch | | c. | Issuance of drafts/ pay orders/ any other payment instrument | (i) Name of the payee (in brief/ acronym)
(ii) Name of the drawee bank/ branch/ service branch | | d. | Bank charges | (i) Nature of the charges – fee/ commission/ penalty etc.
(ii) Reasons for the charges, in brief – e.g. return of cheque (number), commission/ fee on draft issued/ remittance (draft number), cheque collection charge (number), issuance of cheque book, SMS alerts, ATM fees, additional cash withdrawals, etc. | | e. | Reversal of wrong credits | (i) Date of the original credit entry reversed
(ii) Reasons for reversal, in brief | | f. | Recovery of instalments of a loan/ interest on loan | (i) Loan account number
(ii) Name of the Loan account holder | | g. | Creation of fixed deposit/ recurring deposit | (i) Fixed Deposit/ Recurring Deposit Account/ Receipt number
(ii) Name of the Fixed Deposit/ Recurring Deposit Account holder | | h. | Transactions at POS | (i) Transaction date, time and identification number
(ii) Location of the POS | | i. | Any other | (i) Provide adequate details on the same lines as mentioned above. | Note: In case of single debit in account with multiple credits, the payee name/ account number/ branch/ bank shall not be recorded. However, the fact of “multiple payees” will be indicated.. Table 6
Illustrative credit entries in pass books / statements of account | | II. | Credit Entries | | a. | Cash deposit | (i) Indicate that it is a “cash deposit”
(ii) Name of the depositor – self/ third party | | b. | Receipt from third parties | (i) Name of the remitter/ transferor
(ii) Mode – Transfer, inter-branch, RTGS/ NEFT, cash, etc.
(iii) Name of the transferor bank, if the payment is received through inter-branch transaction, RTGS/ NEFT | | c. | Proceeds of clearing/ collection/ draft etc. paid | (i) Name of the draft issuing bank
(ii) Date and number of the cheque/ draft | | d. | Reversal of wrong debits (including charges) | (i) Date of the original debit entry reversed
(ii) Reasons for reversal, in brief | | e. | Interest on deposits | (i) Mention if it is interest paid on the Savings Account/ Fixed Deposit
(ii) Mention the respective Fixed Deposit Account/ Receipt Number if it is interest paid on Fixed Deposit(s) | | f. | Maturity proceeds of fixed deposit/ recurring deposit | (i) Name of the Fixed Deposit/ Recurring Deposit holder
(ii) Fixed Deposit/ Recurring Deposit account/ receipt number
(iii) Date of maturity | | g. | Loan proceeds | (i) Loan account number | | h. | Any other | (i) Provide adequate details | 184. The bank shall also incorporate information about ‘deposit insurance cover’ along with the limit of coverage, subject to change from time to time, upfront in the pass books. 185. Further, the bank shall ensure that full address and telephone number of the branch are invariably mentioned in the passbooks / statements of account issued to accountholders. A.11 Term Deposit Account 186. Term Deposits shall be accepted as per the guidelines prescribed in Reserve Bank of India (Regional Rural Banks – Interest Rate on Deposits) Directions, 2025. 187. Term Deposit account can be opened by individuals, partnership firms, private limited companies, HUFs, etc. 188. The bank shall adhere to the following instructions relating to operations in term deposit accounts: (1) The bank shall issue term deposit receipt indicating therein full details, such as, date of issue, period of deposit, due date, applicable rate of interest, etc. (2) Term deposits shall be freely transferable from one office of bank to another. (3) Advance instructions from depositors for disposal of deposits on maturity shall be obtained in the application form itself. Wherever such instructions are not obtained, the bank shall ensure to send intimation of impending due date of maturity well in advance to its depositors as a rule in order to extend better customer service. (4) Change in interest rate on deposits shall be made known to customers as well as bank branches expeditiously. (5) Repayment of Term / Fixed Deposits: (i) The signatures of both the depositors need not be obtained for payment of maturity proceeds of Fixed / term deposit accounts that are opened with operating instructions ‘Either or Survivor’. However, the signatures of both the depositors may have to be obtained, in case the deposit is to be paid before maturity. If the operating instruction is ‘Either or Survivor’ and one of the depositors expires before the maturity, no pre-payment of the fixed / term deposit may be allowed without the concurrence of the legal heirs of the deceased joint holder. This, however, would not stand in the way of making payment to the survivor on maturity. (ii) In case the mandate is ‘Former or Survivor’, the ‘Former’ alone can operate / withdraw the matured amount of the fixed / term deposit, when both the depositors are alive. However, the signature of both the depositors may have to be obtained, in case the deposit is to be paid before maturity. If the former expires before the maturity of the fixed / term deposit, the ‘Survivor’ can withdraw the deposit on maturity. Premature withdrawal would however require the consent of both the parties, when both of them are alive, and that of the surviving depositor and the legal heir(s) of the deceased in case of death of one of the depositors. (iii) If the joint depositors prefer to allow premature withdrawals of fixed / term deposits also in accordance with the mandate of ‘Either or Survivor’ or ‘Former or Survivor’, as the case may be, it would be open to the bank to do so, provided they have taken a specific joint mandate from the depositors for the said purpose. In other words, in case of term deposits with "Either or Survivor" or "Former or Survivor" mandate, the bank is permitted to allow premature withdrawal of the deposit by the surviving joint depositor on the death of the other, only if, there is a joint mandate from the joint depositors to this effect. (iv) The bank is advised to invariably incorporate a suitable clause in the account opening form informing joint depositors with the mandate of "Either or Survivor" or "Former or Survivor" about the availability of an option to provide specific joint mandate which facilitates premature withdrawal of the deposit by the surviving joint depositor on the death of the other. The bank shall also inform its existing as well as future term deposit holders about the availability of such an option. (v) The joint deposit holders shall be permitted to give the mandate either at the time of placing fixed deposit or anytime subsequently during the term / tenure of the deposit. If such a mandate is obtained, the bank shall allow premature withdrawal of term / fixed deposits by the surviving depositor without seeking the concurrence of the legal heir(s) of the deceased joint deposit holder. Such premature withdrawal shall not attract any penal charge. (vi) When a fixed deposit account is opened in the joint names of two depositors on ‘Either or Survivor’ basis and the said joint depositors already have a savings bank account in their names jointly on ‘Either or Survivor’ instructions, on maturity of the fixed deposit, proceeds of the matured fixed deposit can be credited to the joint savings bank account already opened in the bank. A separate savings bank account need not be opened in the name of the first depositor for crediting the proceeds of the fixed deposit. (6) The bank may, at the request of all the joint account holders, allow the 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. However, in no case shall the amount or duration of the original deposit undergo a change in any manner in case the deposit is a term deposit. (7) A bank may, at its discretion, and at the request of all the joint account holders of a deposit receipt, allow the splitting up of the joint deposit, in the name of each of the joint account holders only, provided that the period and the aggregate amount of the deposit do not undergo any change. Note: NRE deposits should be held jointly with non-residents only. NRO accounts may be held by non-residents jointly with residents. (8) In cases where the Term Deposit accounts are frozen by the enforcement authorities, the bank shall obtain a request letter from the depositor for renewal. The depositor shall be given an option to choose the term for renewal of the deposit. In case the depositor does not exercise the option of choosing the term for renewal, the bank shall renew the same for a term equal to the original term. (9) The depositor may furnish declaration in Form No.15 G/H (as the case may be) preferably at the commencement of the financial year for receiving interest on deposits without deduction of Tax. However, extant instructions do not allow this declaration to be filed if the interest accrued or earned in an financial year is above ₹50,000/-. The bank is not required to deduct TDS from depositors who submit declaration in Form 15-G / 15-H under Income Tax Rules, 1962. The bank shall give an acknowledgment at the time of receipt of such declaration. (10) The bank shall provide TDS Certificate in Form 16A, to its customers in respect of whom it has deducted tax at source. The banks shall put in place systems that will enable it to provide Form 16A to the customers well within the time-frame prescribed under the Income Tax Rules. A.12 Insurance Cover for Deposits (wherever applicable) 189. All bank deposits, are covered under the insurance scheme offered by Deposit Insurance and Credit Guarantee Corporation of India (DICGC) subject to certain limits and conditions. At present, this cover is up to ₹5 lakh per depositor. A.13 Power of Attorney 190. At the request of the depositor, the bank will register mandate / power of attorney given by him authorising another person to operate the account on his behalf. A.14 Change in Fees and Charges 191. If the bank increases any of the charges or introduces a new charge, it shall be notified one month prior to the revised charges being levied / becoming effective. A.15 Acceptance of cash over the counter 192. The bank shall refrain from incorporating clauses in the terms and conditions which restrict deposit of cash over the counters and ensure that its branches invariably accept cash over the counters from all their customers who desire to do so. In this connection, the bank shall comply with the Know Your Customer requirements for customers and walk-in customers as contained in Reserve Bank of India (Regional Rural Banks – Know Your Customer) Directions, 2025 (as amended from time to time). A.16 Opening accounts in the name of minors with Mothers as guardians 193. It has been brought to our notice that considerable difficulty is being experienced by women customers in opening bank accounts in the names of minors, with mothers as their guardians. Presumably, the banks are reluctant to accept the mother as a guardian of a minor, while father is alive in view of section 6 of the Hindu Minority and Guardianship Act, 1956, which stipulates that the father alone should be deemed to be the guardian in such case. To overcome this legal difficulty and to enable the banks to open freely such accounts in the name of minors under the guardianship of their mothers, it has been suggested in some quarters that the above provisions should be suitably amended. While it is true that an amendment of the above Act may overcome the difficulty in the case of Hindus, it will not solve the problem for other communities as minors belonging to Muslim, Christian, Parsi Communities would still be left out unless the laws governing these communities are also likewise amended. 194. The legal and practical aspects of the above problem were, therefore, examined by us in consultation with the Government of India and we are advised that if the idea underlining the demand for allowing mothers to be treated as guardians relates only to the opening of fixed and savings bank accounts, there would seem to be no difficulty in meeting the requirements as, notwithstanding the legal provisions, such accounts could be opened by banks provided they take adequate safeguards in allowing operations in the accounts by ensuring that the minors' accounts opened with mothers as guardians are not allowed to be overdrawn and that they always remain in credit. In this way, the minors' capacity to enter into contract would not be a subject matter of dispute. If this precaution is taken, the banks' interests would be adequately protected. We shall therefore, be glad if you will kindly apprise all your branches of the position as stated above and instruct them to allow minors' accounts (fixed and savings only) with mothers as guardians to be opened, whenever such requests are received by them, subject to the safeguards mentioned above. 195. The instructions on opening and operation in the deposit accounts of minors are given below: (1) Minors of any age may be allowed to open and operate savings and term deposit accounts through his / her natural or legal guardian. (2) Minors above such an age limit not less than 10 years and up to such amount and such terms as may be fixed by the bank keeping in view its risk management policy, may be allowed to open and operate savings / term deposit accounts independently, if they so desire, and such terms shall be duly conveyed to the account holder. (3) On attaining the age of majority, fresh operating instructions and specimen signature of the account holder shall be obtained and kept on record. Moreover, if the account is operated by the guardian, the balance shall be got confirmed. The bank shall take advance action, including communicating these requirements to minor account holders attaining the age of majority, to ensure fulfilment of these requirements. (4) The bank is free to offer additional banking facilities like internet banking, ATM / debit cards, cheque book facility, etc., to the minor account holders basis its risk management policy, product suitability and customer appropriateness. (5) The bank shall ensure that accounts of minors, whether operated independently or through a guardian, are not allowed to be overdrawn and that these always remain in credit balance. (6) The bank shall perform customer due diligence for opening of deposit accounts of minors and undertake ongoing due diligence, as per the provisions of Reserve Bank of India (Regional Rural Banks – Know Your Customer) Directions, 2025, as amended from time to time. B. Unclaimed Deposits / Inoperative Accounts in banks B.1 Review of Accounts 196. The bank shall undertake at least an annual review in respect of accounts, where there is no customer induced transaction for more than a year. In cases where there is no explicit mandate to renew the term deposit, the bank shall review such accounts if the customers have not withdrawn the proceeds after maturity or transferred these to their savings / current account in order to prevent such deposits from becoming unclaimed. The bank shall inform the account / deposit holders in writing through letters or email or SMS (if the email and mobile number are registered with the bank) that there has been no operation in their accounts / deposits in the last one year, as the case may be. The alert messages shall invariably mention that the account would become ‘inoperative’ if no operations are carried out during the next one year and, the account holder would be required to submit KYC documents afresh for reactivating the account in such case. 197. If the letters are returned undelivered or no response is received through registered email, the bank shall immediately undertake an enquiry to find out the whereabouts of account holder or his / her nominee / legal heirs in case the account holder is deceased. 198. In case any response is received from the account holder giving the reasons for not operating the account, the bank shall continue to classify the account as operative for one more year and the account holder shall be advised to operate the account within a period of one year (herein after referred to as ‘extended period’). In case the account holder still fails to operate the account within the extended period, the bank shall classify the said account as inoperative account after the expiry of the extended period. 199. For the purpose of classifying an account as ‘inoperative’, only customer induced transactions and not bank induced transactions shall be considered. There may be instances where the customer has given a mandate like Standing Instructions (SI) / auto-renewal instructions and there are no other operations in the Savings / Current account or the Term Deposit. These transactions shall also be treated as customer induced transactions. 200. The classification of an account as inoperative shall be for a particular account of the customer and not with reference to the customer. In case a customer is maintaining multiple accounts / deposits with a bank, all such accounts / deposits shall be assessed individually for the purpose of classifying them as inoperative account / unclaimed deposit, as the case may be. 201. In case the account holder is not carrying out transaction and the account is inoperative due to shifting of primary account to another bank, the account holder may be requested to provide the details of the new bank account with authorisation to enable the bank to transfer the balance from the existing bank account. B.2 Treatment of accounts opened for credit of scholarship amount and credit of Direct Benefit Transfer under Government Schemes 202. Central and State governments have been expressing difficulty in crediting cheques / Direct Benefit Transfer / Electronic Benefit Transfer / scholarship amount in the zero balance accounts opened by the bank for beneficiaries of Central / State government schemes and for students who receive scholarship, as they are also classified as inoperative due to non-operation for two years. The bank shall, based on the purpose of opening of the account, segregate the aforementioned accounts in its CBS, so that the stipulation of ‘inoperative’ account is not applicable to these accounts due to their non-operation for a period of more than two years. To avoid the risk of fraud, etc., in such accounts, while allowing operations in these accounts, the bank should exercise due diligence as per the extant instructions. The bank shall ensure that accounts of all student beneficiaries under the various Central / State Government Scholarship Schemes are free from restrictions of 'minimum balance' and 'total credit limit'. B.3 Segregation and Audit of Inoperative Accounts/ Unclaimed Deposits 203. The segregation of inoperative accounts is required to be done to reduce the risk of frauds. The transactions in inoperative accounts, which have been reactivated, shall be monitored regularly, for at least six months, at higher levels (i.e., by controlling authorities of the concerned branch) without the knowledge and notice of the customers and the dealing staff. 204. The bank shall ensure that amounts lying in inoperative accounts / unclaimed deposits and reactivated inoperative accounts / unclaimed deposits, are subjected to concurrent audit. B.4 Tracing of Customers of Inoperative Accounts / Unclaimed Deposits 205. The bank shall contact the holder(s) of the inoperative account / unclaimed deposit through letters, email or SMS (if the email and mobile number are registered with the bank). The email/ SMS shall be sent on a quarterly basis. 206. In case the whereabouts of the holder(s) of the inoperative account / unclaimed deposit are not traceable, the bank shall contact the introducer, if any, who had introduced the account holder to the bank at the time of opening of the account. The bank shall also contact the nominee, if registered, for tracing the customer. 207. The bank shall undertake special drives periodically to find out the whereabouts of the customers, their nominees or legal heirs in respect of inoperative accounts / unclaimed deposits. B.5 Activation of Inoperative Accounts 208. The bank shall make available the facility of updation of KYC for activation of inoperative accounts / unclaimed deposits at all branches (including non-home branches). Further, a bank shall endeavour to provide the facility of updation of KYC in such accounts and deposits through Video-Customer Identification Process (V-CIP). The V-CIP related instructions under Reserve Bank of India (Regional Rural Banks – Know Your Customer) Directions, 2025 (as updated from time to time) shall be adhered to by the bank. Additionally, the services of an authorised Business Correspondent of the bank may be utilised for activation of inoperative accounts as prescribed in the above Master Direction and through Video-Customer Identification Process (V-CIP) if requested by the account holder, subject to the facility of V-CIP being provided by the bank. 209. The bank shall activate the inoperative accounts / unclaimed deposits, including those which are under freeze by orders of various agencies like Courts, Tribunals, Law Enforcement Agencies, only after adhering to the KYC guidelines provided in the Reserve Bank of India (Regional Rural Banks – Know Your Customer) Directions, 2025 (as updated from time to time) such as Customer Due Diligence (CDD), customer identification, risk categorisation, etc. 210. The bank shall ensure that activation of inoperative account / unclaimed deposits in CBS necessarily requires second level of authorisation by another officer at the same or higher level (i.e., through maker and checker). System logs shall invariably be maintained in case of any activity in or activation of inoperative accounts / unclaimed deposits for concurrent audit purpose. The preservation period of such system logs shall be as per the internal guidelines of the bank. 211. The bank shall automatically intimate the inoperative account / unclaimed deposit holders though SMS and registered email stating that on the basis of the KYC documents submitted by them, the inoperative status of the account has been removed. The intimation shall also mention the remedial measures available to them to report unauthorised access, if any. This would alert the account / unclaimed deposit holder against any possible fraudulent activity in his / her inoperative account. The bank shall have in place adequate operational safeguards to ensure that the claimants in case of inoperative accounts / unclaimed deposits are genuine. The bank shall process requests for activation of inoperative account / unclaimed deposits within three working days from the receipt of the complete application. B.6 Payment of Interest 212. Interest on savings accounts shall be credited on a regular basis irrespective of the fact that the account is in operation or not. B.7 Levy of Charges 213. The bank shall not levy penal charges for non-maintenance of minimum balances in any account that is classified as an inoperative account. 214. No charges shall be levied for activation of inoperative accounts. B.8 Display of Unclaimed Deposits and Search Facility 215. The bank shall host the details of unclaimed deposits {only name, address (without pin code) and Unclaimed Deposit Reference Number (UDRN)}, which have been transferred to DEA Fund of RBI on its website, which shall be updated regularly, at least on a monthly basis. A bank which does not have its own website shall make available the above list of unclaimed deposits in its branches. The database hosted on the website shall provide a search option to enable the public to search for their unclaimed deposits using name in combination with the address of the account holder / entity. Upon a successful search, details of unclaimed deposits shall be displayed in a format comprising account holder’s name(s), his / her address (without pincode) and UDRN only. In case such accounts are not in the name of individuals, the search input and result should include names of individuals authorised to operate the accounts. However, the account number, its type, outstanding balance and the name of the branch shall not be disclosed on the bank’s website. B.9 Fraud Risk Management in Inoperative Accounts 216. The bank shall not allow any debit transaction in an inoperative account unless there is a customer induced activation as per the procedure mentioned in paragraphs 208 to 211. Further, the bank may also consider imposing a cooling-off period on reactivation, with restrictions on the number and amount of transactions, as may be applicable for newly opened accounts with the bank. 217. The bank shall ensure that there is no unauthorised access to customer data pertaining to the inoperative accounts. The bank shall also ensure that adequate steps are taken to prevent data theft and related misuse for fraudulent purposes. B.10 Customer Awareness 218. The bank shall provide on its website as well as at its branches, the information on the process for activation of the inoperative account / unclaimed deposits and claiming the balances therein. Necessary claim forms and documents may be made available for the benefit of customers. 219. The bank shall conduct public awareness and financial literacy campaigns regularly to educate the members of public about the activation of inoperative accounts / unclaimed deposits and the prescribed procedure to claim amounts lying therein by a depositor or his / her nominee / legal heir in case of deceased depositor. C. Safe Deposit Locker / Safe Custody Article Facility C.1 Allotment of Lockers C.1.1 Customer Due Diligence (CDD) for Lockers 220. The existing customers of a bank who have made an application for locker facility and who are fully compliant with the CDD criteria under the Reserve Bank of India (Regional Rural Banks – Know Your Customer) Directions, 2025 (as updated from time to time) may be given the facilities of safe deposit lockers / safe custody article subject to on-going compliance. 221. Customers who are not having any other banking relationship with the bank may be given the facilities of safe deposit locker / safe custody article after complying with the CDD criteria under the Reserve Bank of India (Regional Rural Banks – Know Your Customer) Directions, 2025 (as updated from time to time) and subject to on-going compliance. The due diligence shall be carried out for all the customers in whatever rights and capacities they may be hiring the locker. 222. The bank shall incorporate a clause in the locker agreement that the locker-hirer/s shall not keep anything illegal or any hazardous substance in the Safe Deposit locker. If the bank suspects the deposit of any illegal or hazardous substance by any customer in the safe deposit locker, the bank shall have the right to take appropriate action against such customer as it deems fit and proper in the circumstances. 223. The bank shall obtain recent passport size photographs of locker-hirer(s) and individual(s) authorised by locker hirer(s) to operate the locker and preserve in the records pertaining to locker-hirer being maintained in the bank’s branch. C.2 Locker Allotment 224. In order to facilitate customers making informed choices, the bank shall maintain a branch wise list of vacant lockers as well as a waitlist in Core Banking System (CBS) or any other computerised system compliant with Cyber Security Framework issued by RBI, for the purpose of allotment of lockers and ensure transparency in allotment of lockers. The bank shall acknowledge the receipt of all applications for allotment of locker and provide a waitlist number to the customers, if the lockers are not available for allotment. C.2.1 Model Locker Agreement 225. The bank shall have a Board approved agreement for safe deposit lockers. For this purpose, the bank may adopt the model locker agreement framed by IBA. This agreement shall be in conformity with these revised instructions and the directions of the Hon’ble Supreme Court in this regard. The bank shall ensure that any unfair terms or conditions are not incorporated in its locker agreements. Further, the terms of the contract shall not be more onerous than required in ordinary course of business to safeguard the interests of the bank. 226. At the time of allotment of the locker to a customer, the bank shall enter into an agreement with the customer to whom the locker facility is provided, on a paper duly stamped. A copy of the locker agreement in duplicate signed by both the parties shall be furnished to the locker-hirer to know his / her rights and responsibilities. Original Agreement shall be retained with the bank’s branch where the locker is situated. C.2.2 Locker Rent 227. The bank may face potential situations where the locker-hirer neither operates the locker nor pays the rent. To ensure prompt payment of locker rent, the bank is allowed to obtain a Term Deposit, at the time of allotment, which would cover three years’ rent and the charges for breaking open the locker in case of such eventuality. The bank, however, shall not insist on such Term Deposits from the existing locker holders or those who have satisfactory operative account. The packaging of allotment of locker facility with placement of term deposits beyond what is specifically permitted above will be considered as a restrictive practice. 228. If locker rent is collected in advance, in the event of surrender of a locker by a customer, the proportionate amount of advance rent collected shall be refunded to the customer. 229. If there is any event such as merger / closure / shifting of branch warranting physical relocation of the lockers, the bank shall give public notice in two newspapers (including one local daily in vernacular language) in this regard and the customers shall be intimated at least two months in advance along with options for them to change or close the facility. In case of unplanned shifting due to natural calamities or any other such emergency situation, the bank shall make efforts to intimate its customers suitably at the earliest. C.3 Infrastructure and Security Standards C.3.1 Security of the Strong Room/Vault 230. The bank shall take necessary steps to ensure that the area in which the locker facility is housed is properly secured to prevent criminal break-ins. The risks of accessibility of an allotted locker from any side without involvement of the locker-hirer concerned may be assessed and kept on record. The bank shall have a single defined point of entry and exit to the locker room / vault. The place where the lockers are housed must be secured enough to protect against hazard of rain / flood water entering and damaging the lockers in contingent situations. The fire hazard risks of the area should also be assessed and minimised. The bank, as per its policy, shall conduct necessary engineering / safety verification regularly to identify the risks and carry out necessary rectification. 231. The area housing the lockers shall remain adequately guarded at all times. The bank shall install Access Control System, if required as per its risk assessment, which would restrict any unauthorised entry and create digital record of access to locker room with time log. As per its internal security policy, the bank may cover the entry and exit of the strong room and the common areas of operation under CCTV camera and preserve its recording for a period of not less than 180 days. In case any customer has complained to the bank that his / her locker is opened without his / her knowledge and authority, or any theft or security breach is noticed / observed, the bank shall preserve the CCTV recording till the police investigation is completed and the dispute is settled. 232. The security procedures shall be well-documented and the staff concerned shall be properly trained in the procedure. The internal auditors shall verify and report the compliance to ensure that the procedures are strictly adhered to. C.3.2 Locker Standards 233. All the new mechanical lockers to be installed by the bank shall conform to basic standards / benchmarks for safety and security as prescribed by Bureau of Indian Standards (BIS) or any other enhanced industry standards applicable in this regard. 234. In case the lockers are being operated through an electronic system, the bank shall take reasonable steps to ensure that the system is protected against hacking or any breach of security. The customers’ personal data, including their biometric data, shall not be shared with third parties without their consent. Further, the bank shall ensure that the electronically operated lockers are compliant with the Cyber Security Framework prescribed by the Reserve Bank. The system shall be capable of maintaining unalterable log of locker activities. The bank shall comply with the relevant statutory / regulatory guidelines/requirements applicable for IT / data protection. Further, the bank shall also devise a standard operating procedure for issue of new password in lieu of lost passwords to customers in a safe and secure manner in case of electronically operated lockers. 235. The bank shall ensure that identification Code of the bank / branch is embossed on all the locker keys with a view to facilitating identification of lockers / locker ownership by law enforcement agencies in case of need. Further, the custodian of the locker shall, regularly / periodically, check the keys maintained in the branch to ensure that they are in proper condition. The bank shall permit the locker-hirer to operate the locker only with the key provided by the bank, although there is no restriction in allowing the customer to use an additional padlock of her / his own if there are such provisions in lockers. C.4 Locker Operations C.4.1 Regular Operations by Customers 236. The locker hirer and / or the persons duly authorised by him / her only shall be permitted to operate the locker after proper verification of their identity and recording of the authorisation by the officials concerned of the bank. The bank shall maintain a record of all individuals, including the locker-hirers, who have accessed the lockers and the date and time (both check-in and check-out time) on which they have opened and closed the locker and obtain their signature. The ingress and egress register for access to Vault Room by locker-hirers or any other individual including the banks’ staff shall be maintained to record the movement of individuals in the Vault Room area with their signatures at appropriate place in the records. 237. The bank’s officer authorising the locker-hirer to access the locker, after unlocking the first key / password shall not remain present when the locker is opened by the locker-hirer. The bank shall ensure that there is adequate privacy to the locker-hirers in the operations when customers access the lockers at the same time. 238. The bank shall send an email and SMS alert to the registered email ID and mobile number of the customer before the end of the day as a positive confirmation intimating the date and time of the locker operation and the redressal mechanism available in case of unauthorised locker access. C.4.2 Internal Controls by banks 239. There shall be a system of inter change of locks whenever the locker is surrendered by the hirer. The keys of vacant lockers shall be kept in sealed envelopes. The duplicate master keys shall be deposited with another branch of the bank. There shall be proper record of joint custody of master keys. The bank shall conduct surprise periodic verification of surrendered / vacant lockers and their keys by an officer of the bank who is not connected with their custody and proper record shall be maintained as a proof of such verification. 240. The bank shall ensure that the Locker Register and the Locker Key Register are maintained in CBS or any other computerised system compliant with the Cyber Security Framework issued by the Reserve Bank. The Locker Register shall be updated in case of any change in the allotment with complete audit trails. 241. The bank custodian shall check whether the lockers are properly closed post locker operation. If the same is not done, the lockers must be immediately closed, and the locker-hirer shall be promptly intimated through e-mail, if registered or through SMS, if mobile number is registered or through letter so that they may verify any resulting discrepancy in the contents of the locker. The bank custodian shall record the fact of not closing the locker properly in the register and its closure by the bank with the date and time. Further, the custodian of the locker room shall carry out a physical check of the locker room at the end of the day to ensure that lockers are properly closed, and that no person is inadvertently trapped in the locker room after banking hours. C.5 Access to the articles in the safe deposit lockers / return of safe custody articles 242. If the sole locker hirer nominates an individual to receive the contents in the locker, in case of his death, after verification of the death certificate and satisfying the identity and genuineness of such individual approached, the bank shall give access of the locker to such nominee with liberty to remove the contents of the locker, after an inventory was taken in the prescribed manner. In case the locker was hired jointly with the instructions to operate it under joint signatures, and the locker hirer(s) nominates any other individual(s), in the event of death of any of the locker hirers, the bank shall give access of the locker and the liberty to remove the contents jointly to the survivor(s) and the nominee(s) after an inventory was taken in the prescribed manner. In case the locker was hired jointly with survivorship clause and the hirers instructed that the access of the locker should be given to "either or survivor", "anyone or survivor" or "former or survivor" or according to any other survivorship clause permissible under the provisions of the Banking Regulation Act, 1949, the bank shall follow the mandate in the event of death of one or more of the joint locker-hirers. 243. The bank shall, however, ensure the following before giving access to the contents to nominee / survivor: (1) Exercise due care and caution in establishing the identity of the survivor(s) / nominee(s) and the fact of death of the locker hirer by obtaining appropriate documentary evidence; (2) Make diligent effort to find out whether there is any order or direction from Courts / Forums restraining it from giving access to the locker of the deceased; and (3) Make it clear to the survivor(s) / nominee(s) that access to articles in the locker / safe custody articles is given to them only as a trustee of the legal heirs of the deceased locker hirer, i.e., such access given to them shall not affect the right or claim which any person may have against the survivor(s) / nominee(s) to whom the access is given. Similar procedure shall be followed for return of articles placed in the safe custody of the bank. 244. The bank shall ensure that, the contents of locker, when sought to be removed on behalf of a minor nominee, are handed over to a person who is, in law, competent to receive the articles on behalf of such minor. Further, the bank shall prepare an inventory of the articles in the presence of two independent witnesses, one officer of the bank who is not associated with the locker facility or safe deposit of articles and the claimant(s), who may be a nominee or an individual receiving the articles, on behalf of a minor. 245. The bank shall obtain a separate statement from the nominee (claimant) or the person competent to receive articles on behalf of the minor, as the case may be, that all the contents in the locker or in the safe custody of the bank, as the case may be, are received and the locker is empty, and they have no objection to allotment of the locker to any other customer as per norms. 246. While giving access to the survivor(s) / nominee(s) of the deceased locker hirer / depositor of the safe custody articles, the bank may avoid insisting on the production of succession certificate, letter of administration or probate, etc., or obtain any bond of indemnity or surety from the survivor(s) / nominee(s), unless there is any discrepancy in nomination. In this regard, the bank shall take note of the instructions under paragraph 243. 247. In case where the deceased locker hirer had not made any nomination or where the joint hirers had not given any mandate that the access may be given to one or more of the survivors by a clear survivorship clause, the bank shall adopt a Board approved policy to facilitate access to legal heir(s) / legal representative of the deceased locker hirer. In this regard, the bank shall take note of the instructions under paragraph 243. Similar procedure shall be followed for the articles under safe custody of the bank. C.6 Closure and Discharge of locker items 248. This part refers to the breaking open of the locker in a manner other than through the normal access by the customer using her / his original key or password under any one of the following circumstances: (1) if the hirer loses the key and requests for breaking open the locker at her / his cost; or (2) if the Government enforcement agencies have approached the bank with orders from the Court or appropriate competent authority to seize lockers and requested for access to the lockers; or (3) if the bank is of the view that there is a need to take back the locker as the locker hirer is not co-operating or not complying with the terms and conditions of the agreement. 249. The bank shall have a clear Board approved policy together with a Standard Operating Procedure (SOP) for breaking open the lockers for all possible situations keeping in view the relevant legal and contractual provisions. C.6.1 Discharge of locker contents at the request of customer 250. If the key of the locker, supplied by the bank is lost by the locker-hirer, the customer (locker hirer) shall notify the bank immediately. An undertaking may also be obtained from the customer that the key lost, if found in future, will be handed over to the bank. All charges for opening the locker, changing the lock and replacing the lost key may be recovered from the hirer. The charges applicable for replacement of lost keys / issue of new password shall be communicated to the locker hirer. 251. The opening of the locker has to be carried out by the bank or its authorised technician only after proper identification of the hirer, proper recording of the fact of loss and written authorisation by the customer for breaking open the locker. 252. The operation shall be done in the presence of the customer/s and an authorised official of the bank. It has to be ensured that the adjoining lockers are not impacted by any such operations and the contents of the lockers are not exposed to any individual other than the locker-hirer during the break-up or restoration process. C.6.2 Attachment and recovery of contents in a Locker and the Articles in the safe custody of the bank by any Law Enforcement Authority 253. In case of attachment and recovery of the contents in a locker of a customer or the articles left by a customer for safe custody of the bank by any Authority acting either under the orders of a Court or any other competent authority vested with the power to pass such orders, the bank shall co-operate in execution and implementation of the orders. 254. The bank shall verify and satisfy itself about the orders and the connected documents received for attachment and recovery of the contents in a locker or articles in the safe custody of the bank. The customer (locker-hirer) shall be informed by letter as well as by email / SMS to the registered email id / mobile phone number that the Government Authorities have approached for attachment and recovery or seizure of the locker or articles deposited for safe custody. An inventory of the contents of locker and articles seized and recovered by the Authority shall be prepared in the presence of such Government Authorities, two independent witnesses and an officer of the bank and shall be signed by all. A copy of the inventory may be forwarded to the customer to the address available in the bank’s records or handed over to the customer against acknowledgement. 255. The bank shall also record a video of the break-open process and the inventory assessment, wherever legally permissible, and preserve the video to produce as evidence in case of any dispute or Court or fraud case in future. C.6.3 Discharge of locker contents by banks due to non-payment of locker rent 256. The bank shall have the discretion to break open any locker following due procedure if the rent has not been paid by the customer for three years in a row. The bank shall ensure to notify the existing locker-hirer prior to any changes in the allotment and give him / her reasonable opportunity to withdraw the articles deposited by him / her. A clause may be incorporated in the locker agreement to this effect. 257. Before breaking open the locker, the bank shall give due notice to the locker-hirer through a letter and through email and SMS alert to the registered email id and mobile phone number. If the letter is returned undelivered or the locker-hirer is not traceable, the bank shall issue public notice in two newspaper dailies (one in English and another in local language) giving reasonable time to the locker-hirer or to any other person/s who has interest in the contents of locker to respond. The locker shall be broken open in the presence of an officer of the bank and two independent witnesses. In case of electronically operated lockers (including Smart Vaults), the use of ‘Vault Administrator’ password for opening of locker shall be assigned to a senior official and complete audit trail of access shall be preserved. Further, the bank shall also record a video of the break open process together with inventory assessment and its safe keep and preserve the same so as to provide evidence in case of any dispute or Court case in future. The bank shall also ensure that the details of breaking open of locker is documented in CBS or any other computerised systems compliant with the Cyber Security Framework issued by RBI, apart from locker register. After breaking open of locker, the contents shall be kept in sealed envelope with detailed inventory inside fireproof safe in a tamper-proof way until customer claims it. A record of access to the fireproof safe shall invariably be maintained. While returning the contents of the locker, the bank shall obtain acknowledgement of the customer on the inventory list to avoid any dispute in future. 258. The bank shall ensure that the inventory prepared after breaking open of the locker and during settlement of claims, is in the appropriate forms as provided in Annex III or as near thereto as circumstances require. Further, the bank shall not open sealed / closed packets left with them for safe custody or found in locker while releasing them to the nominee(s) and surviving locker hirers / depositor of safe custody article, unless required by law. C.6.4 Discharge of locker contents if the locker remains inoperative for a long period of time 259. If the locker remains inoperative for a period of seven years and the locker-hirer cannot be located, even if rent is being paid regularly, the bank shall be at liberty to transfer the contents of the locker to their nominees / legal heir or dispose of the articles in a transparent manner, as the case may be. Before breaking open the locker, the bank shall follow the procedure as prescribed in paragraphs 257 and 258 above. The bank shall ensure that the procedure to be followed by them for disposal of the articles left unclaimed for a reasonably long period of time as mentioned above is incorporated in their locker agreement. 260. The bank shall ensure that appropriate terms are inserted in the locker agreement executed with the customer specifying the position in case the locker is not in operation for long period. A clause may also be incorporated in the locker agreement to discharge the bank from liability in case the locker is not in operation and the locker is opened by the bank and contents are released as per law and as per the instructions issued by the Reserve Bank and the terms and conditions prescribed in the agreement. C.7 Compensation Policy / Liability for Banks C.7.1 Liability of the bank 261. The bank shall put in place a detailed Board approved policy outlining the responsibility owed by it for any loss or damage to the contents of the lockers due to its negligence as bank owe a separate duty of care to exercise due diligence in maintaining and operating its locker or safety deposit systems. The duty of care includes ensuring proper functioning of the locker system, guarding against unauthorised access to the lockers and providing appropriate safeguards against theft and robbery. Further, the bank shall adhere to the Master Directions on Frauds for reporting requirements about the instances of robberies, dacoities, thefts and burglaries. C.7.2 Liability of bank arising from natural calamities like earthquake, flood, thunderstorm, lightning etc. or due to sole negligence of the customer 262. The bank shall not be liable for any damage and / or loss of contents of locker arising from natural calamities or Acts of God like earthquake, floods, lightning and thunderstorm or any act that is attributable to the sole fault or negligence of the customer. The bank shall, however, exercise appropriate care to its locker systems to protect its premises from such catastrophes. C.7.3 Liability of bank arising from events like fire, theft, burglary, dacoity, robbery, building collapse or in case of fraud committed by the employees of the bank 263. It is the responsibility of bank to take all steps for the safety and security of the premises in which the safe deposit vaults are housed. It has the responsibility to ensure that incidents like fire, theft / burglary / robbery, dacoity, building collapse do not occur in the bank’s premises due to its own shortcomings, negligence and by any act of omission / commission. As the bank cannot claim that it bears no liability towards its customers for loss of contents of the locker, in instances where loss of contents of locker are due to incidents mentioned above or attributable to fraud committed by its employee(s), the bank’s liability shall be for an amount equivalent to one hundred times the prevailing annual rent of the safe deposit locker. C.8 Risk Management, Transparency and Customer Guidance C.8.1 Branch Insurance Policy 264. The bank, with the approval of its Board, shall have a branch insurance policy to minimise the loss due to incidents like robbery, fire, natural calamities, loss during shifting / merger of branch, etc., affecting contents of lockers. C.8.2 Insurance of locker contents by the customer 265. The bank shall clarify in its locker agreement that as it does not keep a record of the contents of the locker or of any articles removed therefrom or placed therein by the customer, they would not be under any liability to insure the contents of the locker against any risk whatsoever. The bank shall under no circumstances offer, directly or indirectly, any insurance product to its locker hirers for insurance of locker contents. C.8.3 Customer guidance and publicity 266. The bank shall display the model locker agreement with all the Terms & Conditions and the Standard Operating Procedures (SOPs) on various aspects on its website and / or at branches (if official website is not available) where locker facility is being provided by it for public viewing. The bank shall ensure that the customers are made aware of the bank’s terms and conditions to avail those facilities. 267. The bank shall display updated information on all kinds of charges for safe deposit lockers and safe custody articles on its website. 268. The bank shall place on its website, the instructions together with the policies / procedures put in place for giving access of the locker / safe custody article to the nominee(s) / survivor(s) / legal heir(s) of the deceased locker hirer / safe custody article. Further, a printed copy of the same shall also be given to the nominee(s) / survivor(s) / legal heir(s). D. Nomination Facility D.1 Legal Provisions D.1.1 Provisions in the Banking Regulation Act, 1949 269. The Banking Regulation Act, 1949 was amended by Banking Laws (Amendment) Act, 1983 by introducing new Sections 45ZA to 45ZF, which provide, inter alia, for the following matters: (1) To enable a banking company to make payment to the nominee of a deceased depositor, the amount standing to the credit of the depositor. (2) To enable a banking company to return the articles left by a deceased person in its safe custody to his nominee, after making an inventory of the articles in the manner directed by the Reserve Bank. (3) To enable a banking company to release the contents of a safety locker to the nominee of the hirer of such locker, in the event of the death of the hirer, after making an inventory of the contents of the safety locker in the manner directed by the Reserve Bank. D.1.2 The Banking Companies (Nomination) Rules, 1985 270. Since such nomination has to be made in the prescribed manner, the Central Government framed, in consultation with the Reserve Bank of India, the Banking Companies (Nomination) Rules, 1985. These Rules, together with the provision of new Sections 45ZA to 45ZF of the Banking Regulation Act, 1949 regarding nomination facilities were brought into force with effect from 1985. The Banking Companies (Nomination) Rules, 1985 which are self-explanatory, provide for: (1) Nomination Forms for deposit accounts, articles kept in safe custody and contents of safety lockers; (2) Forms for cancellation and variation of the nominations; (3) Registration of Nominations and cancellation and variation of nominations; and (4) Matters related to the above. D.1.3 The Banking Companies (Nomination) Rules, 1985 - Clarifications 271. Banking Companies Nomination Rules, 1985 prescribe that only thumb-impressions(s) shall be attested by two witnesses for various Forms (DA1, DA2 and DA3 for Bank Deposits, Forms SC1, SC2 and SC3 for Articles left in Safe Custody, Forms SL1, SL1A, SL2, SL3 and SL3A for Safety Lockers). Signatures of the account holders need not be attested by witnesses. 272. The bank shall ensure that its branches offer nomination facility to all deposit accounts including joint accounts opened by the customers. D.1.4 Banking Companies (Nomination) Rules, 1985 – Acknowledgement of Nomination and indicating the Name of the Nominee in Pass Books / Fixed Deposit Receipts 273. The bank shall strictly comply with the provisions of Banking Regulation Act, 1949 and Banking Companies (Nomination) Rules, 1985 and devise a proper system of acknowledging the receipt of the duly completed form of nomination, cancellation and / or variation of the nomination. Such acknowledgement shall be given to all the customers irrespective of whether the same is demanded by the customers or not. 274. When a bank account holder has availed himself / herself of nomination facility, the same may be indicated on the passbook so that in case of death of the account holder, the relatives can know from the passbook that the nomination facility has been availed of by the deceased depositor and take suitable action. The bank, may, accordingly, introduce the practice of recording on the face of the passbook the position regarding availment of nomination facility with the legend "Nomination Registered". This may be done in the case of term deposit receipts also. 275. In addition, the bank shall indicate the name of the Nominee in the Passbook / Statement of Accounts / FDRs, in case the customer is agreeable to the same, as this would be helpful to the customers / nominees. D.1.5 Separate nomination for savings bank account and pension account 276. Nomination facility is available for Savings Bank Account opened for credit of pension. Banking Companies (Nomination) Rules, 1985 are distinct from the Arrears of Pension (Nomination) Rules, 1983 and nomination exercised by the pensioner under the latter rules for receipt of arrears of pension will not be valid for the purpose of deposit accounts held by the pensioners with banks for which a separate nomination is necessary in terms of the Banking Companies (Nomination) Rules, 1985 in case a pensioner desires to avail of nomination facility. D.1.6 Nomination Facility – Certain Clarifications - Nomination facility in respect of deposits 277. Nomination facility is intended for individuals including a sole proprietary concern. 278. Rules stipulate that nomination shall be made only in favour of individuals. As such, a nominee cannot be an Association, Trust, Society or any other Organisation or any office-bearer thereof in his official capacity. In view thereof any nomination other than in favour of an individual will not be valid. 279. There cannot be more than one nominee in respect of a joint deposit account. 280. The bank may allow variation / cancellation of a subsisting nomination by all the surviving depositor(s) acting together. This is also applicable to deposits having operating instructions "either or survivor". 281. In the case of a joint deposit account the nominee's right arises only after the death of all the depositors. 282. Witness in Nomination Forms: The Banking Companies (Nomination) Rules, 1985 have been framed in exercise of powers conferred by Section 52 read with Sections 45ZA, 45ZC and 45ZE of the Banking Regulation Act, 1949. In this connection, we clarify that for the various Forms (DA1, DA2 and DA3 for Bank Deposits, Forms SC1, SC2 and SC3 for Articles left in Safe Custody, Forms SL1, SL1A, SL2, SL3 and SL3A for Safety Lockers) prescribed under Banking Companies (Nomination) Rules, 1985, only Thumb-impression(s) shall be attested by two witnesses. Signatures of the account holders need not be attested by witnesses. 283. Nomination in case of Joint Deposit Accounts: It is understood that sometimes the customers opening joint accounts with or without "Either or Survivor" mandate, are dissuaded from exercising the nomination facility. It is clarified that nomination facility is available for joint deposit accounts also. The bank is, therefore, advised to ensure that its branches offer nomination facility to all deposit accounts including joint accounts opened by the customers. 284. Nomination Facility in Single Deposit Accounts: The bank shall give wide publicity and provide guidance to deposit account holders on the benefits of nomination facility and the survivorship clause. The bank shall generally insist that the person opening a deposit account makes a nomination. In case the person opening an account declines to fill in nomination, the bank should explain the advantages of nomination facility. If the person opening the account still does not want to nominate, the bank should ask him to give a specific letter to the effect that he / she does not want to make a nomination. In case the person opening the account declines to give such a letter, the bank should record the fact on the account opening form and proceed with opening of the account, if otherwise found eligible. Under no circumstances, the bank shall refuse to open an account solely on the ground that the person opening the account refused to nominate. The bank shall follow the procedure outlined above in respect of deposit accounts in the name of Sole Proprietary Concern as well. D.2 Nomination Facility in respect of Safe Deposit Locker / Safe Custody Article Facility 285. The bank shall offer nomination facility in case of safe deposit lockers and safe custody of articles, in accordance with the provisions of section 45-ZC to 45-ZF of the Banking Regulation Act, 1949 and Banking Companies (Nomination) Rules, 1985. In case the nominee is a minor, the same procedure as prescribed for the bank accounts shall be followed by the bank. A passport size photo of the nominee attested by the customer may be obtained from the customers, at his / her option and preserved in the records. 286. For the various Forms (Forms SC1, SC2 and SC3 for Articles left in Safe Custody and Forms SL1, SL1A, SL2, SL3 and SL3A for Safety Lockers) prescribed under Banking Companies (Nomination) Rules, 1985, only Thumb-impression(s) shall be required to be attested by two witnesses. Signatures of the account holders need not be attested by witnesses. 287. The bank shall have appropriate systems and procedures in place to register the nomination, cancellation and / or variation of the nomination, in its books, made by the locker hirers. 288. The bank shall devise a proper system of acknowledging the receipt of duly completed form of nomination, cancellation and / or variation of the nomination. Such acknowledgement shall be given to all the customers irrespective of whether the same is demanded by the customers or not. D.3 Customer education and publicity 289. The bank may take necessary measures for popularising the nomination facility among its constituents. The bank may endeavour to drive home to its constituents, the benefit of nomination facilities and ensure that the message reaches all the constituents. The methodology which the banks may like to adopt for this purpose may vary. A specimen format of the slip is as below. Nomination facility available for - - Deposits - Safe, Custody - Safe Deposit Vault Please make use of it. For details: Please enquire at the branch. E. Nomination in Joint Bank Account by Persons of Queer Community 290. There are no restrictions for persons of the Queer community to nominate a person in queer relationship as a nominee to receive the balance in the joint bank account, in the event of death of the account holder. F. Settlement of Claims in respect of Deceased Customers of Banks (to be implemented not later than March 31, 2026) 291. The current instructions in respect of Settlement of Claims are provided in Annex IV. The instructions in Annex IV shall continue to be applicable till the bank implements directions provided in paragraph 292 to 332, which shall be implemented as expeditiously as possible but not later than March 31, 2026. The instructions in Annex IV shall cease to be applicable once these revised directions are implemented by the bank. 292. These directions (paragraphs 292 to 332) shall not be applicable in case of Government savings schemes administered by banks such as Senior Citizen Savings Scheme (SCSS), Public Provident Fund (PPF), etc. Settlement of claims in such cases shall be as per the provisions of the respective schemes. 293. For the limited purpose of directions from paragraphs 292 to 332, unless the context otherwise requires, the following definitions shall apply: (1) ‘Accounts with survivorship clause’ refers to joint deposit accounts styled as ‘either or survivor’, or ‘anyone or survivor’, or ‘former or survivor’ or ‘latter or survivor’ or any other such clause. (2) ‘Apostille’ refers to a certificate that authenticates the origin of a public document (e.g., a birth, marriage or death certificate, a judgment, an extract of a register or a notarial attestation). Apostilles can only be issued for documents issued in one country party to the Hague Apostille Convention and that are to be used in another country which is also a party to the Convention. In India, such attestations are done by Ministry of External Affairs. (3) 'Bank Rate’ refers to the rate published by Reserve Bank in terms of Section 49 of the Banking Regulation Act, 1949. (4) ‘Customer’ refers to a person who may be a depositor or a locker hirer or has placed articles in safe custody with a bank. (5) ‘Depositor’ refers to an individual(s) who has any type of deposit account with a bank such as Savings account, Current account, Term Deposit account, etc. (6) ‘Equivalent e-document’ shall have the same meaning as defined Reserve Bank of India (Regional Rural Banks – Know Your Customer) Directions, 2025. (7) ‘Officially Valid Document’ refers to the documents as detailed in Reserve Bank of India (Regional Rural Banks – Know Your Customer) Directions, 2025. (8) ‘Threshold limit’ means ₹15 lakh or such higher limit as may be fixed by the bank. F.1 Settlement of Claims in Deposit Accounts of Deceased Depositor F.1.1 Accounts with nominee(s) / survivorship clause 294. A deposit account where a depositor had made nomination in terms of the provisions of the Banking Regulation Act, 1949 or where the account was opened with survivorship clause, the payment of the outstanding balance upon the death of the depositor(s) to the nominee(s) / survivor(s) shall be considered a valid discharge of a bank’s liability, provided: (1) the bank has exercised due care and caution in establishing the identity of the nominee(s) / survivor(s) and the deceased status of the account holder(s) by obtaining appropriate documentary evidence (physical or equivalent e-document); (2) there is no order from the competent court in the knowledge of the bank, as on the date of settlement / payment, restraining the nominee(s) / survivor(s) from receiving or the bank from making the payment from the account of the deceased depositor(s); and (3) it has been made clear in writing to the nominee(s) / survivor(s) that they would be receiving the payment from the bank as a trustee of the legal heirs of the deceased depositor(s), i.e., such payment to them shall not affect the right or claim which any person may have against the nominee(s) / survivor(s) to the extent of the payment made to them. 295. In the case of a joint deposit account with or without survivorship clause, the nominee's right arises only after the death of all the depositors. 296. Payment made to the nominee(s) / survivor(s), subject to the foregoing conditions, shall constitute a full and valid discharge of a bank's liability. Therefore, in such cases, while making payment to the nominee(s) / survivor(s) of the deceased depositor(s), the bank shall not insist on production of legal documents such as Succession Certificate, Letter of Administration, Probate of Will, etc., or seek any bond of indemnity / surety from the nominee(s) / survivor(s) / third-party, irrespective of the amount standing to the credit of the deceased account holder(s). The bank shall require submission of the following documents in such cases: (1) Claim form, as given in Annex V, duly signed by the nominee(s) / survivor(s); (2) Death certificate of the deceased depositor(s); and (3) Officially Valid Document of the nominee / survivor towards verifying her / his identity and address. F.1.2 Accounts without nominee / survivorship clause F.1.2.1 Simplified Procedure for settlement of claims 297. Keeping in view the imperative need to avoid inconvenience and undue hardship to the legal heir(s) / claimant(s), the bank shall follow a simplified procedure for settlement of claims in respect of deposit accounts where the aggregate amount payable, including accrued interest, as on the date of the application is less than the threshold limit, provided (1) a deceased depositor(s) had not made any nomination or in case of a joint account, the account was without nominee / survivorship clause, (2) there is no Will left behind by the deceased depositor(s), (3) there is no contesting claim, and (4) there is no order from a competent court in the knowledge of the bank, restraining the claimant(s) from receiving nor the bank from making the payment. 298. Claim amount up to the threshold limit (1) The bank shall settle the claim up to the threshold limit based on: (i) Claim form, as given in Annex VI, duly filled in and signed by the claimant(s) other than those who have signed the letter of disclaimer/ no objection; (ii) Death certificate of the deceased depositor(s); (iii) Officially Valid Document of the claimant(s) towards verifying his / her identity and address; (iv) Bond of indemnity, as given in Annex VII, signed by the claimant(s); (v) Letter of disclaimer / no objection, as given in Annex VIII, from non-claimant legal heir(s), if applicable; and (vi) Legal Heir Certificate issued by a competent authority; OR (vii) Declaration, as given in Annex IX, regarding the legal heir(s) of the deceased depositor(s) by an independent person who is well known to the family of the deceased, is not a party to the claim and is acceptable to the bank. (2) No bond of surety from a third-party shall be obtained in case of claims up to the threshold limit. 299. Claim amount above the threshold limit (1) In cases where claim amount is above the threshold limit, the bank shall settle the claim based on: (i) Succession Certificate and documents mentioned at paragraphs 298(1) (i) to (iii) above; OR (ii) Legal Heir Certificate issued by a competent authority; or; Affidavit, as given in Annex IX, sworn before a Notary Public / Judge / Judicial Magistrate regarding the legal heir(s) of the deceased depositor, by an independent person who is well known to the family of the deceased, is not a party to the claim and is acceptable to the bank. (2) In such cases, the bank shall call for the documents at paragraphs 298(1) (i) to (v) above. The bank may also call for a bond of surety, as given in Annex VII, from third-party individuals (which may include non-claimant legal heir(s)) who are acceptable to the bank and good for the claim amount. F.1.2.2 Settlement of Claims not falling under the Simplified Procedure 300. Claims involving ‘Will’ without any dispute (1) The bank shall settle claims involving ‘Will’ left behind by a deceased depositor on the basis of Probate of Will / Letter of Administration, as applicable, in addition to documents mentioned at paragraphs 298(1) (i) to (iii) above. In cases where a person other than a legal heir is named as a beneficiary in the Will, applicable documents shall also be obtained from her / him. (2) However, the bank is free to exercise discretion and act as per ‘Will’ of the deceased without requiring production of the probate of such Will, provided the same is not inconsistent with applicable laws, there is no dispute regarding the Will amongst the legal heir(s) and / or beneficiaries named in the Will and the bank is otherwise satisfied as to the genuineness of the Will. In such cases, the bank shall additionally call for the documents mentioned at paragraphs 298(1) (iv) and (v) above. 301. Cases involving contesting claims/ dispute: In case of contesting claims or dispute amongst the legal heir(s) and / or the beneficiaries named in the Will of the deceased depositor, the bank shall settle claims on the basis of Probate of Will or Letter of Administration or Succession Certificate or Court order / decree, as applicable, and the documents mentioned at paragraphs 298(1) (i) to (iii) above. Further, where there is an order from a Court restraining the bank from making the payment, the claim shall not be entertained during the period the order is in force. The settlement of claim shall be considered based on subsequent Court order to that effect. 302. No bond of surety shall be insisted from a third party in cases falling under either paragraph 300 or 301. F.1.3 Treatment of credits in the name of a deceased depositor post settlement 303. Post settlement of the deposit account(s), in case any credit is received in the name of a deceased depositor, the bank shall return the same to the remitter with the remark 'Account holder deceased' and intimate the nominee(s) / survivor(s) / legal heir(s). F.1.4 Premature termination of term deposit accounts in case of depositor’s death 304. The bank shall incorporate a clause in the account opening form itself to the effect that in the event of death of the depositor, premature termination of term deposits would be allowed without any penal charge, even if the deposit is within the lock-in-period. 305. Premature termination of term deposits opened jointly, with or without survivorship clause, shall require the consent of the surviving depositors and the legal heir(s) of the deceased joint holder, in case of death of one of the depositors. However, in case of joint accounts with survivorship clause, if a specific mandate is furnished by all the depositors jointly to the bank, either at the time of placing the term deposit or anytime subsequently during the tenure of the deposit, then premature withdrawal option shall be allowed to the survivors on the death of any of the depositors, without seeking the concurrence of the legal heir(s) of the deceased joint deposit holder. F.1.5 Settlement of claims in respect of missing persons 306. The nominee(s) / legal heir(s) of a missing person shall be required to get an order from the competent court under the provisions of Sections 110 or 111 of the Bharatiya Sakshya Adhiniyam, 2023. The claim in respect of such missing person shall be settled as per the procedure applicable for settlement of claims in respect of a deceased customer. In such cases, a copy of the court order declaring the civil death of the account holder shall be obtained in lieu of the death certificate. However, to avoid inconvenience and undue hardship to the common person where the aggregate amount payable, including accrued interest, as on the date of the application is less than ₹1 lakh or such higher amount as may be fixed by the bank, a copy of the First Information Report (FIR) and non-traceable report issued by police authorities shall be obtained in lieu of death certificate or an order from a competent court declaring the civil death of the account holder for settling the claim. F.2 Settlement of Claims in Safe Deposit Locker and Articles in Safe Custody by Deceased Customer F.2.1 Claims with Nominee(s)/ Survivor(s) 307. If a sole locker hirer nominates an individual(s) to receive the contents in the locker in case of her / his death, the bank shall give access of the locker to such nominee(s) with liberty to remove the contents of the locker. 308. In case the locker was hired jointly with the instructions to operate it under joint signatures, and the locker hirers nominate any other individual(s), in the event of death of any of the locker hirers, the bank shall give access of the locker and the liberty to remove the contents jointly to the nominee(s) and the survivor(s). 309. In case the locker was hired jointly with survivorship clause and the hirers instructed that the access of the locker should be given to "either or survivor", "anyone or survivor" or "former or survivor" or according to any other survivorship clause permissible under the provisions of the Banking Regulation Act, 1949, the bank shall follow the mandate in the event of death of one or more of the joint locker hirers. 310. In case of a minor nominee, the bank shall ensure that, the contents of locker, when sought to be removed on behalf of the minor nominee, are handed over to the guardian whose details have been provided in the nomination form. If the details of the guardian have not been provided in the nomination form, the bank shall hand over the contents of the locker to a person who is, in law, competent to receive the contents of safe deposit locker on behalf of such minor. 311. The following documents shall be obtained by a bank for processing the claim in cases falling under paragraphs 307 and 308 above: (1) Claim form, as given in Annex V, duly signed by the nominee(s) / survivor(s); (2) Death certificate of the safe deposit locker hirer(s); and (3) Officially Valid Document of the nominee / survivor towards verifying her / his identity and address. 312. The bank shall, however, ensure the following before giving access to the contents to the nominee(s) / survivor(s): (1) Exercise due care and caution in establishing the identity of the nominee(s)/ survivor(s) and deceased status of the locker hirer(s) by obtaining appropriate documentary evidence (physical or equivalent e-document); (2) There is no order or direction as on date from a Court / Forum in the knowledge of the bank, restraining the nominee(s) / survivor(s) from having access or the bank from giving access to the locker of the deceased hirer(s) and liberty to remove the contents of such locker; and (3) Make it clear to the nominee(s)/ survivor(s) that access and liberty to remove the contents of the locker is given to them only as a trustee of the legal heir(s) of the deceased locker hirer(s), i.e., such access and liberty to remove the contents given to them shall not affect the right or claim which any person may have against the nominee(s) / survivor(s) to whom the access is given. 313. After receipt of the documents mentioned at paragraph 311 above and being satisfied to the genuineness of the claim, the bank shall correspond with the nominee(s) / survivor(s) in writing and fix a date and time for making an inventory of the contents of the safe deposit locker. The same shall be undertaken in the presence of the nominee(s) and / or survivor(s) and / or their authorised representatives, two independent witnesses (should not be employee or ex-employee of the bank), the safe deposit vault custodian and another employee of the bank not associated with locker operations, and recorded as per the inventory form given in Annex X. The bank shall then hand over the possession of the contents of the locker to the nominee(s) / survivor(s) / the person competent to receive the contents on behalf of the minor, as the case may be, and obtain an acknowledgment, as given in Annex X, that all the contents in the locker of the deceased hirer(s) have been removed and the locker is empty, and they have no objection to allotment of the locker to any other locker hirer as per norms of the bank. 314. Production of legal documents, viz., Succession Certificate, Letter of Administration, Probate of Will, etc., or Bond of indemnity from the nominee(s)/ survivor(s) shall not be required unless there is any discrepancy in nomination. 315. Procedure, as prescribed in paragraphs 307 to 314 above, shall be followed mutatis mutandis for return of articles kept by the deceased customer in the safe custody of the bank. However, inventory form given in Annex XI shall be used in such cases. F.2.2 Cases without nominee / survivorship clause F.2.2.1 Settlement of claims falling under the simplified procedure 316. Keeping in view the imperative need to avoid inconvenience and undue hardship to the legal heir(s) / claimant(s), the bank shall adopt a simplified procedure for settlement of claims in safe deposit lockers provided there is no dispute amongst the legal heir(s) / claimant(s) and (1) the deceased locker hirer(s) had not made any nomination, or (2) the joint hirers had not given any mandate that the access may be given to one or more of the survivors by a clear survivorship clause, or (3) there is no ‘Will’ left behind by the deceased locker hirer. 317. In cases falling under the simplified procedure, the bank shall obtain the following documents to settle the claim without obtaining any legal documents such as Succession Certificate, Letter of Administration, Court order, etc. (1) Claim form, as given in Annex VI, duly filled and signed by the claimant legal heir(s); (2) Death certificate of the safe deposit locker hirer(s); (3) Officially Valid Document of the claimant(s) towards verifying her / his identity and address; (4) Letter of disclaimer / no objection, as given in Annex VIII, from non-claimant legal heir(s), if applicable; and (5) Legal Heir Certificate issued by a competent authority or Affidavit, as given in Annex IX, sworn before a Notary Public / Judge / Judicial Magistrate regarding the legal heir(s) of the deceased locker hirer(s) by an independent person who is well known to the family of the deceased, is not a party to the claim and is acceptable to the bank. F.2.2.2 Settlement of Claims not falling under the Simplified Procedure 318. Claims involving ‘Will’ without any dispute (1) The bank shall settle claims involving ‘Will’ left behind by a deceased safe deposit locker hirer on the basis of Probate of Will / Letter of Administration, as applicable, in addition to documents mentioned at paragraphs 317 (1) to (3) above. In cases where a person other than a legal heir is named as a beneficiary in the Will, applicable documents shall also be obtained from her / him. (2) However, the bank may exercise discretion and act as per ‘Will’ of the deceased without requiring production of the probate of such Will, provided the same is not inconsistent with applicable laws, there is no dispute regarding the Will amongst the legal heir(s) and/ or beneficiaries named in the Will and the bank is otherwise satisfied as to the genuineness of the Will. In such cases, the bank shall additionally call for the documents mentioned at paragraphs 317 (4) and (5) above. 319. Cases involving contesting claims / dispute: Cases involving dispute amongst the legal heir(s) and / or beneficiaries named in the Will, as applicable, shall be settled based on Probate of Will or Succession Certificate or Letter of Administration or Court order / decree, as the case may be, and the documents mentioned at paragraphs 317 (1) to (3) above. F.2.2.3 Procedure for taking inventory of contents of safe deposit locker 320. After receipt of the required documents in claims falling under categories at paragraphs 316 to 319 above and being satisfied to the genuineness of the claim, the bank shall correspond with the claimant(s) in writing and fix a date and time for making an inventory of the contents of the safe deposit locker, as given in form prescribed in Annex X, in the presence of all claimant(s) or their duly authorised representatives, two independent witnesses (should not be employee or ex-employee of the bank), the safe deposit vault custodian and another employee of the bank not associated with locker operations. Valuation of the contents of the safe deposit locker shall be carried out by an independent valuer and recorded in the Bond of Indemnity as given in Annex XII. The claimant(s) or their duly authorised representative(s) may remove the contents of the locker subsequent to submission of the Bond of Indemnity. Bond of Indemnity shall not be required to be given in cases of claims settled on the basis of legal documents such as Probate of Will or Succession Certificate or Letter of Administration or Court order / decree, etc. 321. Procedure, as prescribed in paragraphs 316 to 320 above, shall be followed mutatis mutandis for return of articles kept by the deceased customer in the safe custody of the bank. However, inventory form given in Annex XI shall be used in such cases. F.3 Operational and Compensation related aspects F.3.1 Standardisation of procedure for submission of claims 322. The bank shall use the standardised forms for receiving the claims and other documents as per the formats provided in Annex V to Annex XII. 323. The standardised forms and other documents required for settlement of claims with respect to the deposit accounts / safe deposit locker / articles in safe custody kept by a deceased customer shall be made available in all the branches as well as on the bank’s website for the convenience of the claimant(s). Further, the bank shall also display on its website, the list of documents to be submitted by a claimant and the procedure to be followed for settlement of claims in various scenarios. 324. A claimant shall be allowed to lodge the claim at any of the branches against acknowledgment. In case all required documents for processing of the claim have been submitted by the claimant, the bank shall also issue a confirmation in this regard. However, in case of any pending or incomplete / incorrect documents, the bank shall intimate the claimant about the list of such documents while acknowledging the receipt of claim. On subsequent submission of all the required documents, the bank shall issue a confirmation to the claimant that all required documents have been received for processing of the claim. 325. The bank may provide the facility for online lodgement of such claims. Upon a claimant uploading the claim form along with the required documents, the bank shall send acknowledgement / confirmation through appropriate channels and also make available the provision for online tracking of the status of the claim. In such cases, if the bank requires the claimant to produce original documents for submission / verification, the same shall be allowed to be done at any of its branches. F.3.2 Time limit for settlement of claims 326. The bank shall settle a claim in respect of deposit accounts of a deceased customer within a period not exceeding 15 calendar days from the date of receipt of all the required documents associated with the claim. 327. In case of safe deposit locker / articles in safe custody, the bank shall, within 15 calendar days of receipt of all the required documents, process the claim and communicate with the claimant(s) for fixing the date for making inventory of the locker / articles in safe custody. F.3.3 Compensation for delay in settlement of claims 328. If any deposit related claim is not settled within the timeframe stipulated at paragraph 326 above, then the bank shall communicate the reasons for such delay to the claimant(s). Further, in cases of delay attributable to the bank, compensation shall be paid by the bank in the form of interest, at a rate not less than the prevailing Bank Rate + 4 percent per annum, on the settlement amount due for the period of delay. The reference date for reckoning the amount due and the prevailing Bank Rate shall be the date of receipt of all required documents from the claimant. 329. For claims related to safe deposit locker / articles in safe custody, the bank shall be required to pay compensation to the claimant(s) at the rate of ₹5,000 for each day of delay, in cases where it doesn’t adhere to the timeline prescribed in paragraph 327 above. F.4 Miscellaneous F.4.1 Settlement of claims in respect of deposit accounts of a sole proprietary concern 330. Nomination facility is also available in respect of deposits held in the name of a sole proprietary concern. Accordingly, the bank shall follow the procedure for settlement of claims in respect of such accounts as has been prescribed above for the accounts with / without nominee / survivorship clause, as applicable. F.4.2 Modes for Certification of ‘proof of death’ document issued outside India 331. In cases involving death of a customer outside India, ‘proof of death’ document is issued by an authority outside the country. In such cases, the bank shall accept the original certified copy of the document issued for ‘proof of death’, certified in the country of its issuance in any one of the following modes: (1) authorised officials of overseas branches of Scheduled Commercial Banks registered in India; or (2) branches of overseas banks with whom Indian banks have correspondent banking relationships; or (3) a Court Magistrate or Judge or Notary Public; or (4) consularised by Indian Embassy/ Consulate General in the country of issuance; or (5) apostilled. F.4.3 Customer Awareness and Publicity 332. The bank shall continue to spread awareness among its customers about the benefits of the nomination facility / survivorship clause and give wide publicity to these facilities along with the procedure for settlement of claims. Chapter VIII – Responsible Lending Conduct A. Fair Practices Code for lenders A.1 Disclosing all Information relating to Processing Fees / Charges 333. The bank shall ensure that all information relating to charges / fees for processing are invariably disclosed in the loan application forms. Further, the bank must inform 'all-in-cost' to the customer to enable him / her to compare the rates charged with other sources of finance. A.2 Applications for Loans and their Processing 334. Fees and Other Terms - Loan application forms applicable to all categories of borrowers irrespective of loan amount, will contain information about the fees / charges payable, if any, for processing, the amount of such fees refundable in the case of non-acceptance of application, pre-payment options and any other matter which affects the interest of the borrower, to facilitate informed decision by the borrower. 335. Acknowledgement - Acknowledgement will be issued for receipt of all applications. 336. Time Frame for Disposal - The loan applications will be verified within a reasonable period of time and if additional details / documents are required, the same will be intimated to the borrowers immediately. The time frame for disposal of loan applications shall be as under: (1) For loans up to ₹25,000/- within a fortnight's time. (2) For loans above ₹25,000/- within 4 weeks. 337. Communication of Rejection with Reasons - Applicants for all categories of loans irrespective of any threshold limits shall be conveyed in writing within the stipulated time, the main reason / reasons which, in the opinion of the bank have led to rejection of loan applications in the prescribed format. (Each bank has to prepare its own list of standard reasons for rejection and make available / circulate / display the same for the information of the bank's customers in the notice Boards of their branches). A.3 Loan Appraisal and Terms and Conditions 338. Communication of Sanction - Sanction of the credit limit will be conveyed to the borrower along with the terms and conditions thereof, for which the borrower's acceptance of the said terms and conditions given with their full knowledge will be obtained and kept on record. 339. Terms and Conditions of Sanction - The letter of sanction containing the terms and conditions and other caveats governing credit facilities will be issued to the borrower signed by the authorised official. A copy of the loan agreement along with a copy each of all enclosures quoted in the loan agreement will also be furnished against a request in writing received from the borrower for the same. A.4 Disbursement of Loans including Changes in Terms and Conditions 340. Timely disbursement of loans sanctioned in conformity with the terms and conditions governing such sanctions will be ensured. Notice will be given in respect of any change in the terms and conditions including interest rates, service charges, etc. For this purpose, a notice on the Notice Board of the bank's branches and offices shall be deemed to be sufficient notice aside of the notices sent individually. Changes in interest rates and charges will be effected only prospectively. A.5 Post Disbursement Supervision 341. Post-disbursement Supervision - Post-disbursement supervision shall be constructive with a view to taking care of any "lender related" genuine difficulty that the borrower may face. 342. Recall / Accelerated Payment - Decision to recall / accelerate payment or performance under the agreement or seeking additional securities, lenders shall be preceded by notice to borrowers, as specified in the loan agreement or a reasonable period, if no such condition exists in the loan agreement. 343. Release of Securities - On receiving payment of loan or realisation of loan subject to any legitimate right or lien for any other claim against the borrower, all securities will normally be released to the borrower. Where right of set off is to be exercised, borrowers will be given notice about the same with full particulars about the remaining claims and the documents under which bank is entitled to retain the securities till the relevant claim is settled / paid. A.6 General 344. Non-interference - The bank shall not interfere in the affairs of the borrowers except for what is provided in the terms and conditions of the loan sanction documents, unless new information, not earlier disclosed by the borrower, has come to the notice of the bank. 345. No Discrimination - The bank shall not discriminate on the grounds of sex, caste and religion in the matter of lending. However, the bank may participate in credit-linked schemes framed for weaker sections of society. 346. No Unfair Measures for Recovery - In the recovery of loans, the bank shall not resort to undue harassment viz., persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans, etc. 347. Issue of No-Objection Certificate - In case of receipt of request for transfer of borrowal account, either from the borrower or from a bank, which proposes to take over the account, the consent or otherwise, i.e., objection of the bank, if any, will be conveyed within 21 days from the date of receipt of request. A.7 Borrowers' Covenants 348. To be entitled to the above provisions of the Fair Practices Code, the borrower agrees that: (1) Abide by the assessment of credit application carried out by the bank and shall not expect the use of margin and security stipulations as a substitute for due diligence on credit worthiness of the borrower. (2) The limits sanctioned and other terms and conditions are purely at the discretion and subject to modification as may be prescribed by the bank. (3) The interest rate stipulated for the limit is as per the existing guidelines. Appropriate interest will be charged taking into account the changes that may be effected by the bank from time to time. (4) The sanction of loan does not vest with anyone the right to claim any damages against any reason whatsoever. (5) Allowing drawings beyond the sanctioned limits, honouring of cheques issued for the purpose other than specifically agreed to in the credit sanction remain at the discretion of the bank. (6) The bank does not have an obligation to meet further requirements of the borrower on account of growth in business etc. without proper review of credit limits. (7) The bank does not have the obligation to nurse / finance the account in the case of sickness. (8) In the event of account becoming NPA, full details of the account can be disclosed to public and the borrowers undertake to sign the disclosure clause. B. Fair Lending Practice - Penal Charges in Loan Accounts 349. The bank shall adhere to following instructions for charging penal charges on loans. These instructions shall be applicable to all credit facilities including Cash Credit, Overdraft, securitisation and co-lending portfolios, etc. However, these instructions shall not apply to Credit Cards, External Commercial Borrowings, Trade Credits (rupee / foreign currency export credit) and Structured Obligations which are covered under product specific directions, as also other foreign currency loans. (1) Penalty, if charged, for non-compliance of material terms and conditions of loan contract by the borrower shall be treated as ‘penal charges’ and shall not be levied in the form of ‘penal interest’ that is added to the rate of interest charged on the advances. There shall be no capitalisation of penal charges, i.e., no further interest computed on such charges. However, this will not affect the normal procedures for compounding of interest in the loan account. Therefore, the bank may charge interest on unpaid interest (including on unpaid EMI) at the contracted rate of interest till the date of remediation, and not at the penal rate of interest. Notes: (i) The material terms and conditions shall be defined, if not already done, as per the credit policy of the bank and they may vary from one category of loan to another, and also, from lender to lender based on their own assessment. (ii) Default in repayment by the borrower is also a type of non-compliance of material terms and conditions of loan repayment contract by the borrower and penalty, if charged, for such default shall only be levied in the form of penal charges and not penal interest. Such penal charges shall be reasonable and levied by the lenders only on the amount under default in a non-discriminatory manner as per their Board approved policy. Further, it shall be ensured that there is no capitalization of the penal charges i.e., no further interest computed on such charges. (iii) Additional / Fresh penal charges cannot be levied on the earlier outstanding amount of penal charges. (iv) In case of the funded facility created on account of invocation of BG / devolvement of LC, the bank may charge an appropriate rate of interest on the devolved amount taking into account the associated credit risk premium as per the bank's credit underwriting policy. However, penalty, if any, on that funded facility on account of non-repayment by the borrower within the due date may only be levied in the form of penal charges and not penal interest. (v) In respect of NPA accounts, penal charges shall be reversed to the extent it remains uncollected for the specific purpose of non-recognition of income. However, the same shall be part of the total liability of the borrower to the bank, unless it is waived as per the bank's Board approved policy. (vi) The bank shall disclose fees and charges, including penal charges, recovered from customers in 'Schedule 14: Other Income'. (2) The bank shall not introduce any additional component to the rate of interest and ensure compliance to these guidelines in both letter and spirit. (3) The bank shall formulate a Board approved policy on penal charges or similar charges on loans, by whatever name called. (4) The quantum of penal charges shall be reasonable and commensurate with the non-compliance of material terms and conditions of loan contract without being discriminatory within a particular loan / product category. Notes: (i) The penal charges can be different within the same product category depending upon the amount of loan and the bank may adopt a suitable structure of penal charges subject to adherence to the above stipulations. The structure of penal charges within a particular loan / product category shall have to be uniform irrespective of the constitution of the borrower. (ii) Although no upper limit / cap for penal charges has been prescribed, the bank, while formulating its Board approved policy on penal charges, should keep in mind that the intent of levying penal charges is essentially to inculcate a sense of credit discipline and such charges are not meant to be used as a revenue enhancement tool. (5) The penal charges in case of loans sanctioned to ‘individual borrowers, for purposes other than business’, shall not be higher than the penal charges applicable to non-individual borrowers for similar non-compliance of material terms and conditions. (6) The quantum and reason for penal charges shall be clearly disclosed by the bank to the customers upfront in the loan agreement and Most Important Terms & Conditions (MITC) / Key Fact Statement (KFS) as applicable, in addition to being displayed on the bank’s website under Interest rates and Service Charges. Further, providing a reference to the schedule of penal charges displayed on the website of the bank in the sanction letter and loan agreement shall not suffice. (7) Whenever reminders for non-compliance of material terms and conditions of loan are sent to borrowers, the applicable penal charges shall be communicated. Further, any instance of levy of penal charges and the reason therefor shall also be communicated. (8) In the case of existing loans, the switchover to new penal charges regime shall be ensured on next review or renewal date. C. Pre-payment charges on loans 350. The bank shall not charge foreclosure charges/ pre-payment penalties on any floating rate loans term loans and advances, for purposes other than business, to individual borrowers with or without co-obligant(s). 351. The below paragraphs 352 and 353 shall be applicable to all loans and advances sanctioned or renewed on or after January 1, 2026. 352. The bank shall adhere to the following Directions regarding levy of pre-payment charges on all floating rate loans (including term loans and demand loans) and advances: (1) For all floating rate loans granted for purposes other than business to individuals, with or without co-obligant(s), the bank shall not levy pre-payment charges (2) The bank shall not levy any pre-payment charges on all floating rate loans/advances, sanctioned or renewed on or after January 1, 2026, granted for business purpose to individuals and MSEs, with or without co-obligant(s), with sanctioned amount/ limit up to ₹50 lakh. (3) The instructions at paragraph 352(1) and 352(2) above shall be applicable irrespective of the source of funds used for pre-payment of loans, either in part or in full, and without any minimum lock-in period. (4) Applicability of above Directions for dual/ special rate (combination of fixed and floating rate) loans will depend on whether the loan is on floating rate at the time of pre-payment. 353. In addition to the instructions at paragraph 352, the following shall be applicable to all loans (including term loans and demand loans) and advances sanctioned or renewed on or after January 1, 2026: (1) In cases other than those mentioned at paragraphs 352(1) and 352(2) above, pre-payment charges, if any, shall be as per the approved policy of the bank. However, in case of term loans, pre-payment charges, if levied by the bank, shall be based on the amount being prepaid. In case of cash credit/ overdraft facilities, pre-payment charges on closure of the facility before the due date shall be levied on an amount not exceeding the sanctioned limit. (2) In case of cash credit/ overdraft facilities, no pre-payment charges shall be applicable if the borrower intimates the bank of his / her / its intention not to renew the facility before the period as stipulated in the loan agreement, provided that the facility gets closed on the due date. (3) The bank shall not levy any charges where pre-payment is effected at the instance of the bank. (4) The applicability or otherwise of pre-payment charges shall be clearly disclosed in the sanction letter and loan agreement. Further, in case of loans and advances where Key Facts Statement (KFS) is to be provided as specified in paragraph 358, the same shall also be mentioned in the KFS. No pre-payment charges which have not been disclosed as specified herein shall be charged by the bank. (5) The bank shall not levy any charges/ fees retrospectively at the time of pre-payment of loans, which were waived off earlier by the bank. D. Reset of Floating Interest Rate on Equated Monthly Instalments (EMI) based Personal Loans 354. The bank has the freedom to offer all categories of advances either on fixed or on floating interest rates basis. 355. The bank shall put in place an appropriate policy framework meeting the following requirements for implementation and compliance: (1) At the time of sanction, the bank shall clearly communicate to the borrowers about the possible impact of change in benchmark interest rate on the loan leading to changes in EMI and / or tenor or both. Subsequently, any increase in the EMI/ tenor or both on account of the above shall be communicated to the borrower immediately through appropriate channels. (2) At the time of reset of interest rates, the bank may, at its option, provide a choice to the borrowers to switch over to a fixed rate as per its Board approved policy. The policy, inter alia, may also specify the number of times a borrower will be allowed to switch during the tenor of the loan. (3) The borrowers shall also be given the choice to opt for (i) enhancement in EMI or elongation of tenor or for a combination of both options; and, (ii) to prepay, either in part or in full, at any point during the tenor of the loan. Levy of foreclosure charges / pre-payment penalty shall be subject to extant instructions. Note: Whenever there is a reset of interest rates for an entire class of borrowers in a particular loan category, say home loan, due to increase in the reference benchmark; the bank shall provide the following options to the borrowers: (i) Either enhancement in EMI or elongation of number of EMIs, keeping the EMI unchanged or a combination of both options; (ii) Switch to fixed interest rate for the remaining portion of the loan, where such an option is provided by the bank; and (iii) To prepay, either in part or in full, at any point during the residual tenor of the loan. (4) All applicable charges for switching of loans from floating to fixed rate and any other service charges / administrative costs incidental to the exercise of the above options shall be transparently disclosed in the sanction letter and also at the time of revision of such charges / costs by the bank from time to time. The applicable charges shall be as approved by the Board and shall be displayed on the bank’s website. (5) The bank shall ensure that the elongation of tenor in case of floating rate loan does not result in negative amortisation. (6) The bank shall share / make accessible to the borrowers, through appropriate channels, a statement at the end of each quarter which shall at the minimum, enumerate the principal and interest recovered till date, EMI amount, number of EMIs left and annualised rate of interest / Annual Percentage Rate (APR) for the entire tenor of the loan. The bank shall ensure that the statements are simple and easily understood by the borrower. 356. Apart from the equated monthly instalment loans, these instructions would also apply, mutatis mutandis, to all equated instalment based loans of different periodicities irrespective of whether they are linked to an external benchmark or an internal benchmark. The instructions in paragraph 355 above are not applicable to other types of loans. In case of loans linked to an external benchmark under the External Benchmark Lending Rate (EBLR) regime, the bank shall follow extant instructions and also put in place adequate information systems to monitor transmission of changes in the benchmark rate to the lending rate. 357. The bank shall ensure that the above instructions are extended to the existing as well as new loans. All existing borrowers shall be sent a communication, through appropriate channels, intimating the options available to them. The content of communication to the borrower shall be as follows: (1) At the time of sanction: (i) Annualised rate of interest/ Annual Percentage Rate (APR), as applicable, shall be disclosed in the Key Fact Statement (KFS) and the loan agreement. (ii) The possible impact of change in benchmark interest rate on the loan. (2) During the tenure of the loan: (i) Subsequently, any increase in the EMI / tenor on account of the external benchmark rate shall be communicated; and (ii) Quarterly statements shall be provided disclosing at the minimum, the principal and interest recovered till date, EMI amount, number of EMIs left and annualised rate of interest for the tenor of the loan. E. Key Facts Statement (KFS) for Loans & Advances 358. The following instructions shall be applicable in cases of all retail and MSME term loan products extended by the bank. Credit card receivables are exempted from the provisions given below: (1) The bank shall provide a KFS to all prospective borrowers to help them take an informed view before executing the loan contract, as per the standardised format given in the Annex XIII. The KFS shall be written in a language understood by such borrowers. Contents of KFS shall be explained to the borrower and an acknowledgement shall be obtained that they have understood the same. (2) The KFS shall be provided with a unique proposal number and shall have a validity period of at least three working days for loans having tenor of seven days or more, and a validity period of one working day for loans having tenor of less than seven days. Explanation: Validity period refers to the period available to the borrower, after being provided the KFS by the bank, to agree to the terms of the loan. The bank shall be bound by the terms of the loan indicated in the KFS, if agreed to by the borrower during the validity period. (3) The KFS shall also include a computation sheet of annual percentage rate (APR), and the amortisation schedule of the loan over the loan tenor. APR will include all charges which are levied by the bank. Illustrative examples of calculation of APR and disclosure of repayment schedule for a hypothetical loan are given below: (i) Illustration for computation of APR for Retail and MSME loans Sr. No. | Parameter | Details | 1 | Sanctioned Loan amount (in Rupees) (Sl no. 2 of the KFS template – Part 1 of Annex XIII) | 20,000 | 2 | Loan Term (in years / months / days) (Sl No.4 of the KFS template – Part 1 of Annex XIII) | | a) | No. of instalments for payment of principal, in case of non-equated periodic loans | - | b) | Type of EPI
Amount of each EPI (in Rupees) and
nos. of EPIs (e.g., no. of EMIs in case of monthly instalments)
(Sl No. 5 of the KFS template – Part 1 of Annex XIII) | Monthly
970
24 | c) | No. of instalments for payment of capitalised interest, if any | - | d) | Commencement of repayments, post sanction (Sl No. 5 of the KFS template – Part 1 of Annex XIII) | 30 days | 3 | Interest rate type (fixed or floating or hybrid) (Sl No. 6 of the KFS template – Part 1 of Annex XIII) | Fixed | 4 | Rate of Interest (Sl No. 6 of the KFS template – Part 1 of Annex XIII) | 15% | 5 | Total Interest Amount to be charged during the entire tenor of the loan as per the rate prevailing on sanction date (in Rupees) | 3,274 | 6 | Fee/ Charges payable (in Rupees)
Note: Where such charges cannot be determined prior to sanction, the bank may indicate an upper ceiling | 400 | A | Payable to the bank (Sl No.8A of the KFS template - Part 1 of Annex XIII) | 240 | B | Payable to third-party routed through the bank (Sl No.8B of the KFS template – Part 1 of Annex XIII) | 160 | 7 | Net disbursed amount (1-6) (in Rupees) | 19,600 | 8 | Total amount to be paid by the borrower (sum of 1 and 5) (in Rupees) | 23,274* | 9 | Annual Percentage rate- Effective annualized interest rate (in percentage) (Sl No.9 of the KFS template - Part 1 of Annex XIII)
Note: Computed on net disbursed amount using IRR approach and reducing balance method | 17.07% | 10 | Schedule of disbursement as per terms and conditions | Detailed schedule to be provided | 11 | Due date of payment of instalment and interest | DDMMYYYY | * The difference in repayment amount calculated from the total of instalments given under the detailed repayment schedule i.e., ₹23,280 (=970*24) vis-à-vis the amount of ₹23,274 (₹20,000 (loan amount) + ₹3,274 (Interest charges) mentioned under (11) is due to rounding off the instalment amount of ₹969.73 to ₹970 under the detailed repayment schedule. (ii) Illustrative Repayment Schedule under Equated Periodic Instalment for the above-mentioned hypothetical loan: Instalment No. | Outstanding Principal (in Rupees) | Principal (in Rupees) | Interest (in Rupees) | Instalment (in Rupees) | 1 | 20,000 | 720 | 250 | 970 | 2 | 19,280 | 729 | 241 | 970 | 3 | 18,552 | 738 | 232 | 970 | 4 | 17,814 | 747 | 223 | 970 | 5 | 17,067 | 756 | 213 | 970 | 6 | 16,310 | 766 | 204 | 970 | 7 | 15,544 | 775 | 194 | 970 | 8 | 14,769 | 785 | 185 | 970 | 9 | 13,984 | 795 | 175 | 970 | 10 | 13,189 | 805 | 165 | 970 | 11 | 12,384 | 815 | 155 | 970 | 12 | 11,569 | 825 | 145 | 970 | 13 | 10,744 | 835 | 134 | 970 | 14 | 9,909 | 846 | 124 | 970 | 15 | 9,063 | 856 | 113 | 970 | 16 | 8,206 | 867 | 103 | 970 | 17 | 7,339 | 878 | 92 | 970 | 18 | 6,461 | 889 | 81 | 970 | 19 | 5,572 | 900 | 70 | 970 | 20 | 4,672 | 911 | 58 | 970 | 21 | 3,761 | 923 | 47 | 970 | 22 | 2,838 | 934 | 35 | 970 | 23 | 1,904 | 946 | 24 | 970 | 24 | 958 | 958 | 12 | 970 | (4) Charges recovered from the borrowers by the bank on behalf of third-party service providers on actual basis, such as insurance charges, legal charges etc., shall also form part of the APR and shall be disclosed separately. In all cases wherever the bank is involved in recovering such charges, the receipts and related documents shall be provided to the borrower for each payment, within a reasonable time. (5) Any fees, charges, etc. which are not mentioned in the KFS, cannot be charged by the bank to the borrower at any stage during the term of the loan, without explicit consent of the borrower. (6) The KFS shall also be included as a summary box to be exhibited as part of the loan agreement. F. Guidelines on conduct towards Microfinance borrowers F.1 General 359. A fair practices code (FPC) based on these directions shall be put in place by the bank with the approval of its Board. The FPC shall be displayed by the bank in all its offices and on its website. The FPC should be issued in a language understood by the borrower. 360. There shall be a standard form of loan agreement for microfinance loans in a language understood by the borrower. 361. The bank shall provide a loan card to the borrower which shall incorporate the following: (1) Information which adequately identifies the borrower; (2) Simplified factsheet on pricing; (3) All other terms and conditions attached to the loan; (4) Acknowledgements by the bank of all repayments including instalments received and the final discharge; and (5) Details of the grievance redressal system, including the name and contact number of the nodal officer of the bank. 362. All entries in the loan card shall be in a language understood by the borrower. 363. Issuance of non-credit products shall be with full consent of the borrowers and fee structure for such products shall be explicitly communicated to the borrower in the loan card itself. F.2 Conduct aspects in Pricing of Loans 364. There shall be no pre-payment penalty on microfinance loans. Penalty, if any, for delayed payment shall be applied on the overdue amount and not on the entire loan amount. 365. The bank shall prominently display the minimum, maximum and average interest rates charged on microfinance loans in all its offices, in the literature (information booklets / pamphlets) issued by it and details on its website. This information shall also be included in the supervisory returns and subjected to supervisory scrutiny. 366. Any change in interest rate or any other charge shall be informed to the borrower well in advance and these changes shall be effective only prospectively. 367. As part of their awareness campaigns, SROs/ other industry associations may publish the range of interest rates on microfinance loans charged by their members operating in a district. SROs/ other industry associations may also sensitise their members against charging of usurious interest rates. 368. RBI would also make available information regarding interest charged by banks on microfinance loans. F.3 Training of Staff 369. The bank shall have a Board-approved policy regarding the conduct of employees and system for their recruitment, training and monitoring. This policy shall, inter alia, lay down minimum qualifications for the staff and shall provide necessary training tools to deal with the customers. Training to employees shall include programs to inculcate appropriate behaviour towards customers. Conduct of employees towards customers shall also be incorporated appropriately in their compensation matrix. 370. Field staff shall be trained to make necessary enquiries regarding the income and existing debt of the household. 371. Training, if any, offered to the borrowers shall be free of cost. F.4 Guidelines related to Recovery of Loans 372. The bank shall put in place a mechanism for identification of the borrowers facing repayment related difficulties, engagement with such borrowers and providing them necessary guidance about the recourse available. 373. Recovery shall be made at a designated / central designated place decided mutually by the borrower and the bank. However, field staff shall be allowed to make recovery at the place of residence or work of the borrower if the borrower fails to appear at the designated / central designated place on two or more successive occasions. 374. The bank or its agent shall not engage in any harsh methods towards recovery. Without limiting the general application of the foregoing, following practices shall be deemed as harsh: (1) Use of threatening or abusive language (2) Persistently calling the borrower and / or calling the borrower before 9:00 a.m. and after 6:00 p.m. (3) Harassing relatives, friends, or co-workers of the borrower (4) Publishing the name of borrowers (5) Use or threat of use of violence or other similar means to harm the borrower or borrower’s family / assets / reputation (6) Misleading the borrower about the extent of the debt or the consequences of non-repayment. 375. The bank shall have a dedicated mechanism for redressal of recovery related grievances. The details of this mechanism shall be provided to the borrower at the time of loan disbursal. F.5 Engagement of Recovery Agents 376. Recovery agents shall mean agencies engaged by the bank for recovery of dues from its borrowers and the employees of these agencies. 377. The bank shall have a due diligence process in place for engagement of recovery agents, which shall, inter alia, cover individuals involved in the recovery process. The bank shall ensure that the recovery agents engaged by it carry out verification of the antecedents of its employees, which shall include police verification. The bank shall also decide the periodicity at which re-verification of antecedents shall be resorted to. 378. To ensure due notice and appropriate authorisation, the bank shall provide the details of recovery agents to the borrower while initiating the process of recovery. The agent shall also carry a copy of the notice and the authorisation letter from the bank along with the identity card issued to him / her by the bank or the agency. Further, where the recovery agency is changed by the bank during the recovery process, in addition to the bank notifying the borrower of the change, the new agent shall carry the notice and the authorisation letter along with his / her identity card. 379. The notice and the authorisation letter shall, among other details, also include the contact details of the recovery agency and the bank. 380. The up-to-date details of the recovery agencies engaged by the bank shall also be hosted on its website. G. Conduct related aspects in Lending Against Gold and Silver Collateral G.1 Standardisation of Procedure for Assaying and Valuation of Gold and Silver collateral 381. The lender (meaning a bank which provides or intends to provide loans against eligible collateral) shall ensure that a standardised procedure is put in place to assay the purity of gold and silver collateral, its weight (gross as well as net), etc. This procedure shall be adopted uniformly across all its branches for all assaying procedures, without any deviation. 382. The lender shall display on its website the methodology adopted by it for determination of net weight of the gold and silver content of the eligible collateral and the price used to value the gold and silver content of the eligible collateral for determination of LTV ratio. 383. The lender shall ensure presence of the borrower(s) while assaying the collateral at the time of sanctioning the loan. The deductions relating to stone weight, fastenings, etc., as part of the assaying procedure shall be explained to the borrower(s) and details incorporated in the certificate to be issued (as per paragraph 387 below). 384. Post pledging, cases involving loss of gold or silver collateral and any deterioration or discrepancy in quantity or purity observed during internal audit or otherwise including at the time of return or auction of collateral shall be recorded and communicated promptly to the borrower(s)/ legal heir(s). The process for making reimbursement or compensation as per the policy or SOP shall also be communicated to the borrower(s)/ legal heir(s). G.2 Standardisation of Documents and Communication 385. Documentation shall be standardised across all branches of the bank. 386. The loan agreement shall cover the description of the eligible collateral taken as security, value of such collateral, details of auction procedure and the circumstances leading to the auction of the eligible collateral, the notice period which shall be allowed to the borrower for repayment or settlement of loan before the auction is conducted, timelines for release of pledged eligible collateral upon full repayment or settlement of loan, refund of surplus, if any, from the auction of the pledged eligible collateral and other necessary details. All applicable charges payable by the borrower, including those related to assaying, auction, etc., shall be clearly included in the loan agreement and Key Fact Statement (KFS). 387. The lender, while accepting the eligible collateral, shall prepare a certificate or e-certificate in duplicate on its letterhead regarding the assay of the collateral and state therein the purity (in terms of carats); gross weight of the eligible collateral pledged; net weight of gold or silver content therein and deductions, if any, relating to weight of stones, lac, alloy, strings, fastenings, etc.; damage, breakage or defects, if any, noticed in the collateral; image of the collateral; and the value of collateral arrived at the time of sanction (As per the instructions on Valuation and Assaying of Gold and Silver collateral specified in the Reserve Bank of India (Regional Rural Banks – Credit Facilities) Directions, 2025). One copy of the certificate or e-certificate shall be kept as part of the loan documents and the other copy be given to the borrower under their acknowledgement. 388. All communication with the borrower, especially, the terms and conditions of the loan, or other important communication which affects the interest of the borrower or the lender, shall be in the language of the region or in a language as chosen by the borrower. For an illiterate borrower, important terms and conditions shall be explained in the presence of a witness, who shall not be an employee of the lender. G.3 Handling and Storage of Collateral 389. The lender shall ensure that necessary infrastructure and facilities are put in place and appropriate security measures taken in each of its branches where loans are sanctioned against gold or silver collateral. It shall ensure that the gold and / or silver collateral is handled only in its branches and only by its employees. 390. The lender shall store the collateral only in its branches which are manned by its employees and having safe deposit vaults fit for storing gold and silver. Normally, such loans shall not be extended by branches that do not have appropriate secured facility for storage of the pledged eligible collateral. 391. The pledged eligible collateral may be transported from one branch to another branch, only as permitted under paragraph 400 below or in case of shifting or closure of branch(es) or exceptional reasons as per the process laid down by the bank in terms of its policy. 392. The lender shall periodically review the adequacy of systems for storage of the eligible collateral, conduct training of the concerned staff and carry out internal audit of all procedures to ensure that these are strictly adhered to. 393. As part of internal audit, the lender shall carry out periodic surprise verification of the gold and silver collateral pledged with it and shall maintain a record thereof. A clause in the loan agreement shall be included for obtaining consent of the borrower(s) to carry out surprise verification including assay of the pledged eligible collateral even in their absence during the tenor of the loan. This aspect shall be specifically communicated to the borrower at the time of sanctioning the loan. G.4 Release of Collateral after Repayment 394. The lender shall release or return the pledged eligible collateral held as security to the borrower(s) / legal heir(s) on the same day but in any case, not exceeding a maximum period of seven working days upon full repayment or settlement of the loan. 395. At the time of release of pledged eligible collateral to the borrower(s) / legal heir(s), the collateral shall be verified for correctness as per details in the certificate (as per paragraph 387) to the borrowers’ satisfaction. G.5 Transparency in Auction Procedure 396. The lender shall give adequate notice to the borrower(s) / legal heir(s), as applicable, through available means of communication to repay or settle the loan dues prior to initiating the auction procedure. A copy of the notice and acknowledgement thereof shall be kept on record in both scenarios. In case the lender is unable to locate the borrower(s) / legal heir(s) despite best efforts and even after issuance of a public notice, it may proceed with the auction, provided that a period of one month has lapsed from the date of the public notice. 397. The lender shall implement a transparent auction procedure, which shall include, inter alia, announcement of the auction to the public by issue of advertisements in at least two newspapers, one in the regional language and another in a national daily. 398. The pledged eligible collateral shall be auctioned by a lender only through its employee having necessary experience and / or training or an auctioneer empanelled by the lender as per its policy. In cases where auctions are conducted by a lender through its employees, necessary safeguards such as surprise visits by regional/ controlling officials on periodic basis, coverage under internal audit, etc., shall be put in place. 399. The lender shall declare a reserve price for the gold and silver collateral at the time of auction, which shall not be less than 90 per cent of its current value. Provided that in case auctions fail twice, a reserve price not less than 85 per cent of its current value shall be adopted. 400. The first auction shall be conducted physically in the same district in which the lending branch is located. However, in case of failure of first auction, a lender may conduct the auction in an adjoining district or conduct online auction. 401. As a matter of policy, the lender or its related parties shall not participate in the auctions to ensure that there is no potential conflict of interest. 402. After the auction, the lender shall mandatorily provide full details of the value fetched at the auction and the dues adjusted to the borrower(s) / legal heir(s). The surplus, if any, from the auction of the gold or silver collateral, shall be refunded to the borrower(s) / legal heir(s) within a maximum period of seven working days from the date of receipt of the full auction proceeds. The lender may recover shortfall, if any, as per terms of the loan agreement. G.6 Compensation 403. In case of any damage to the pledged eligible collateral by the lender during the tenor of loan, the cost of repair shall be borne by the lender. 404. In case of loss of the pledged eligible collateral and / or any loss emanating from deterioration or discrepancy in quantity or purity observed during internal audit or otherwise including at the time of return or auction of collateral, lender shall suitably compensate the borrower(s) / legal heir(s). 405. In case of delay in release of the pledged collateral after full repayment or settlement of loan by the borrower, where reasons for delay are attributable to the lender, the lender shall compensate the borrower(s) / legal heir(s) at the rate of ₹5,000 for each day of delay beyond the timeline prescribed at paragraph 394 above. If the delay is not attributable to the bank, it shall communicate reasons for such delay to the borrower(s) / legal heir(s). Further, where the borrower(s) / legal heir(s) has not approached the bank for release of pledged eligible collateral after full repayment or settlement of loan, the bank shall issue periodic reminders to borrower(s) / legal heir(s) through letters, email or SMS if the email and mobile number are registered with the bank. 406. The compensation provided under paragraphs 403 to 405 shall be without prejudice to the rights of a borrower to get any other compensation as per any applicable law. G.7 Unclaimed Gold and Silver collateral 407. The pledged gold or silver collateral lying with the lender beyond two years from the date of full repayment or settlement of loan shall be treated as unclaimed. The bank shall periodically undertake special drives to ascertain the whereabouts of the borrower(s) / legal heir(s) in respect of such unclaimed gold and silver collateral. 408. A report on unclaimed gold and silver collateral shall be put up to the Customer Service Committee or the Board, as the case may be, at half-yearly intervals for a review. G.8 Other Instructions 409. The lender shall refrain from issuance of misleading advertisements containing unrealistic claims to promote loans against gold or silver collateral. 410. The lender shall generally disburse loans into borrower’s bank accounts. All lenders shall comply with the Reserve Bank of India (Regional Rural Banks – Know Your Customer) Directions, 2025 as updated from time to time. Provisions of Sections 269 SS and 269 T of the Income Tax Act, 1961, and associated rules shall be complied with, as may be applicable. 411. In case of bank transfers, the lender shall ensure that: (1) Loan disbursals are made to the borrower’s account and not to a third-party account (except for disbursals covered exclusively under statutory or regulatory mandate (of RBI or of any other regulator), flow of money between lenders for co-lending transactions and disbursals for specific end use, provided the loan is disbursed directly into the bank account of the end-beneficiary); and (2) Loan servicing, repayment, etc. is executed by the borrower directly in the lenders’ bank account without any pass-through account or pool account of any third party. 412. Running multiple loans simultaneously to a single borrower or a group of related borrowers may be prone to misuse and susceptible to fraud. Consequently, such practices shall be subject to stricter internal audit and supervisory examination. H. Release of Movable / Immovable Property Documents on Repayment/ Settlement of Personal Loans H.1 Release of Movable / Immovable Property Documents 413. The bank shall release all the original movable / immovable property documents and remove charges registered with any registry within a period of 30 days after full repayment / settlement of the loan account. 414. The borrower shall be given the option of collecting the original movable / immovable property documents either from the banking outlet / branch where the loan account was serviced or any other office of the bank where the documents are available, as per her / his preference. 415. The timeline and place of return of original movable / immovable property documents shall be mentioned in the loan sanction letters issued on or after the effective date. 416. In order to address the contingent event of demise of the sole borrower or joint borrowers, the bank shall have a well laid out procedure for return of original movable / immovable property documents to the legal heir(s). Such procedure shall be displayed on the website of the bank along with other similar policies and procedures for customer information. H.2 Compensation for delay in release of Movable / Immovable Property Documents 417. The bank shall communicate to the borrower reasons for delay in releasing of original movable / immovable property documents or failing to file charge satisfaction form with relevant registry beyond 30 days after full repayment / settlement of loan. In case where the delay is attributable to the bank, it shall compensate the borrower at the rate of ₹5,000/- for each day of delay. 418. In case of loss / damage to original movable / immovable property documents, either in part or in full, the bank shall assist the borrower in obtaining duplicate / certified copies of the movable / immovable property documents and shall bear the associated costs, in addition to paying compensation as indicated at paragraph 417 above. However, in such cases, an additional time of 30 days will be available to the bank to complete this procedure and the delayed period penalty will be calculated thereafter (i.e., after a total period of 60 days). 419. The compensation provided under these directions shall be without prejudice to the rights of a borrower to get any other compensation as per any applicable law. I. Outsourcing of Financial Services - Responsibilities of regulated entities employing Recovery Agents 420. The bank shall strictly ensure that they or their agents do not resort to intimidation or harassment of any kind, either verbal or physical, against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude upon the privacy of the debtors' family members, referees and friends, sending inappropriate messages either on mobile or through social media, making threatening and / or anonymous calls, persistently calling the borrower and / or calling the borrower before 8:00 a.m. and after 7:00 p.m. for recovery of overdue loans, making false and misleading representations, etc. This direction shall not be applicable to microfinance loans provided as per Reserve Bank of India (Regional Rural Banks – Credit Facilities) Directions, 2025. Guidelines on Conduct towards Microfinance Borrowers is specified under paragraphs 359 to 380 of this direction. Chapter IX - Miscellaneous A. Sunday banking 421. In predominantly residential areas, the bank may keep its branches open for business on Sundays by suitably adjusting the holidays. 422. The bank shall keep rural branches open on weekly market day. B. Accepting standing instructions of customers 423. Standing instructions shall be freely accepted on all current and savings bank accounts. The scope of standing instructions service should be enlarged to include payments on account of taxes, rents, bills, school / college fees, licences, etc. C. Clean Overdrafts for small amounts 424. Clean overdrafts for small amounts may be permitted at the discretion of branch manager to customers whose dealings have been satisfactory. The bank may work out schemes in this regard. D. Rounding off of transactions 425. All transactions, including payment of interest on deposits / charging of interest on advances, should be rounded off to the nearest rupee i.e., fractions of 50 paise and above shall be rounded off to the next higher rupee and fraction of less than 50 paise shall be ignored. Issue prices of cash certificates should also be rounded off in the same manner. However, the bank should ensure that cheques / drafts issued by clients containing fractions of a rupee are not rejected or dishonoured by them. The bank shall ensure that appropriate action is taken against members of its staff who are found to have refused to accept cheques / drafts containing fractions of a rupee. E. Co-ordination with officers of Central Board of Direct Taxes 426. The bank shall extend necessary help / co-ordination to tax officials whenever required for greater co-ordination between the income-tax department and the banking system. Further, the bank will have to view with serious concern cases where its staff connives / assists in any manner with offences punishable under the Income Tax Act. In such cases in addition to the normal criminal action, such staff member shall also be proceeded against departmentally. F. Declaration of Holiday under the Negotiable Instruments Act, 1881 427. In terms of Section 25 of the Negotiable Instruments Act, 1881, the expression "public holiday" includes Sunday and any other day declared by the Central Government by notification in the Official Gazette to be a public holiday. However, this power has been delegated by the Central Government to State Governments vide the Government of India, Ministry of Home Affairs' Notification No. 20-25-56-Pub-I dated June 8, 1957. While delegating the power to declare public holidays within concerned States under Section 25 of the Negotiable Instruments Act, 1881, the Central Government has stipulated that the delegation is subject to the condition that the Central Government may itself exercise the said function, should it deem fit to do so. This implies that when Central Government itself has notified a day as "public holiday" under Section 25 of the Negotiable Instruments Act, 1881, there is no need for the bank to wait for the State Government notification. G. Various Working Groups / Committees on Customer Service in Banks -Implementation of the Recommendations 428. In order to keep a watch on the progress achieved by the bank in the implementation of the recommendations of various working groups / Committees on customer service, the bank may examine the recommendations which have relevance in the present day banking and continue to implement them. The bank may consider submitting a progress report on the steps / measures taken in that regard, periodically to its Customer Service Committee of the Board. Chapter X – Repeal and Other Provisions A. Repeal and saving 429. With the issue of these Directions, the existing Directions, instructions, and guidelines relating Responsible Business Conduct as applicable to Regional Rural Banks stand repealed, as communicated vide notification dated XX, 2025. The Directions, instructions and guidelines repealed prior to the issuance of these Directions shall continue to remain repealed. 430. Notwithstanding such repeal, any action taken or purported to have been taken, or initiated under the repealed Directions, instructions, or guidelines shall continue to be governed by the provisions thereof. All approvals or acknowledgments granted under these repealed lists shall be deemed as governed by these Directions. B. Application of other laws not barred 431. The provisions of these Directions shall be in addition to, and not in derogation of the provisions of any other laws, rules, regulations, or directions, for the time being in force. C. Interpretations 432. For the purpose of giving effect to the provisions of these Directions or in order to remove any difficulties in the application or interpretation of the provisions of these Directions, the RBI may, if it considers necessary, issue necessary clarifications in respect of any matter covered herein and the interpretation of any provision of these Directions given by the RBI shall be final and binding. |