RBI/2006-2007/330
UBD.CO.BPD.Cir
No: 36 /13.01.000/2006-0
April 19, 2007
To
The
Chief Executive Officers of
Primary
(Urban) Cooperative Banks
Dear
Sir,
Nomination
Facility in Single Deposit Accounts - UCBs
Please
refer to Para 9 of our Circular UBD.BPD.Cir
No: 4/13.01.00/2005-06 dated July 14, 2005 on the above subject wherein banks
were advised to give wide publicity and provide guidance to deposit account holders
on the benefits of nomination facility and the survivorship clause. We feel that
despite the best efforts in this regard, banks might still be opening single deposit
accounts without nomination.
2.
In a case which came up before the Allahabad High Court, the Honourable Court
has observed that 'it will be most appropriate that the Reserve Bank of India
issues guidelines to the effect that no Savings Account or Fixed Deposit in single
name be accepted unless name of the nominee is given by the depositors. It will
go a long way to serve the purpose of the innocent widows and children, who are
dragged on long drawn proceedings in the Court for claiming the amount, which
lawfully belongs to them'.
3.
Keeping in view the above, banks are advised to 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 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,
a bank should refuse to open an account solely on the ground that the person opening
the account refused to nominate.
4.
Further, banks are advised to follow the procedure outlined above in respect of
deposit accounts in the name of Sole Proprietary Concern also.
5.
Please acknowledge receipt to the Regional Office concerned.
Yours
faithfully,
(A.K.Khound)
Chief
General Manager