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Friday, August 17, 2012

RBI directive on‘survivor’ clause

The Reserve Bank of India has directed banks to incorporate the “either or survivor” or “former or survivor” clause in their account opening forms.

The central bank has also asked banks to inform their existing as well as future term deposit holders about the availability of such an option.

“If such a mandate (“either or survivor” or “former or survivor”) is obtained, banks can allow premature withdrawal of term/fixed deposits by the surviving depositor without seeking the concurrence of the legal heirs of the deceased joint deposit holder,” said the RBI in a circular.

The RBI reiterated that premature withdrawal by the surviving joint depositor would not attract any penal charge.

The RBI observed that many banks have neither incorporated the “either or survivor” or “former or survivor” clause in the account opening form nor have they taken adequate measures to make the customers aware of the facility of such mandate. This has put the “surviving” deposit account holders to unnecessary inconvenience.


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