POLICY ON DEPOSITORS’ RIGHT
One of the important functions of the Bank is to accept deposits from the public for the purpose of lending. In fact, depositors are the major stakeholders of the Banking System. The depositors and their interests form the key area of the regulatory framework for banking in India and this has been enshrined in the Banking Regulation Act, 1949. The Reserve Bank of India is empowered to issue directives / advices on interest rates on deposits and other aspects regarding conduct of deposit accounts from time to time. With liberalization in the financial system and deregulation of interest rates, banks are now free to formulate deposit products within the broad guidelines issued by RBI.
RBI has advised banks to formulate a transparent and comprehensive policy setting out the rights of the depositors in general and small depositors in particular. The policy should cover all aspects of operations of deposit accounts, charges leviable and other related issues to facilitate interaction of depositors at branch levels. The policy should also be explicit in regard to secrecy and confidentiality of the customers. Accordingly, this policy document on deposits outlines the guiding principles in respect of formulation of various deposit products offered by the Bank and terms and conditions governing the conduct of the account. The document recognizes the rights of depositors and aims at dissemination of information with regard to various aspects of acceptance of deposits from the members of the public, conduct and operations of various deposits accounts, payment of interest on various deposit accounts, closure of deposit accounts, method of disposal of deposits of deceased depositors, etc., for the benefit of customers. It is expected that this document will impart greater transparency in dealing with the individual customers and create awareness among customers of their rights. The ultimate objective is that the customer will get services they are rightfully entitled to receive without demand.
Types of Deposit Accounts: -
While various deposit products offered by the Bank are assigned different names, the deposit products can be categorized broadly into the following types:-
I) "Demand deposits" means a deposit received by the bank which is withdrawable on demand,
a) "Savings deposits" means a form of demand deposit which is subject to restrictions as to the number of withdrawals as also the amounts of withdrawals permitted by the Bank during any specific period.
b) 'Basic Savings Bank Deposit Account' means a demand deposit account opened for greater financial inclusion. Such accounts, opened on the basis of simplified KYC norms are additionally treated as a ‘Small Account’ subject to conditions stipulated by RBI.
c) "Current Account" means a form of demand deposit wherefrom withdrawals are allowed any number of times depending upon the balance in the account or up to a particular agreed amount and will also include other deposit accounts which are neither Savings Deposit nor Term Deposit.
II) "Term deposits" means a deposit received by the Bank for a fixed period withdrawable only after the expiry of the fixed period and includes deposits such as Recurring Deposits/ Flexi Deposits, Term Deposits / Special Term Deposits etc.
Deposits in account can be made by way of cash, cheques, electronic transfers, ECS, or through any other means which may come into usage after giving due notice on the Bank’s web-site. Cash Deposits at non home branches are subject to certain restrictions and may also involve payment of charges.
Withdrawals in account can be by way of Cheques, Withdrawal forms, through the use of ATM’s, POS machines, by means of electronic transfer through Internet, by use of biometric cards, by giving Standing Instructions to the Bank, ECS Instructions or through any other means which may come into usage after giving due notice on the Bank’s web-site. Cash withdrawal should be in round rupees. Bank does not carry out any financial transactions requested by the Customers through e-mail even if the request is made by a letter scanned as an attachment.
Account Opening and Operation of Deposit Accounts :
A) The Bank before opening any deposit account will carry out due diligence as required under "Know Your Customer" (KYC) guidelines issued by RBI and or such other norms or procedures adopted by the Bank. The status of KYC in accounts will be updated periodically depending upon the Risk Category of customers. For financial inclusion, Bank opens Basic Savings Bank Deposit accounts which have certain restrictions. Savings Bank accounts opened on the basis of simplified KYC norms are named as Small Accounts. Small Accounts remain operational initially for a period of twelve months and thereafter for a further period of 12 months, if the account holders provide an evidence of having applied for any of the officially valid documents for KYC/AML within 12 months of the opening of the account.
B) Salary package Savings accounts for employees of Defence, Paramilitary, Railways, State and Central Govt. employees can also be opened with Liberalised KYC norms. Children accounts under our Scheme ‘Pehla Kadam’ and ‘Pehli Udan’ are also opened with liberalized KYC norms.
C) The Bank will undertake due diligence as per as per the applicable FATCA/CRS rules as notified by RBI/CBDT. The customer has to declare and agree to disclose the material facts at the time of opening and in also future, failing which the Bank would be within its right to put restrictions in the operations of the account or close it or report to any regulator and/or any authority designated by GOI/RBI or take any other action as may be deemed appropriate by the Bank if the deficiency is not remedied within the stipulated period.
D) The account opening forms and other material would be provided to the prospective depositor by the Bank. The same will contain details of information to be furnished and documents to be produced for verification and or for record. It is expected of the Bank official opening the account, to explain the procedural formalities and provide necessary clarifications sought by the prospective depositor when he approaches for opening a deposit account. Bank has a simplified account opening form for Basic Savings Bank accounts and Small accounts. These accounts can also be opened on-line. Bank is in the process of developing other channels for opening of accounts like ATM,Mobiles,etc.
E) For deposit products like Savings Bank Account and Current Deposit Account, the Bank will normally stipulate certain minimum balances to be maintained as part of terms and conditions governing operation of such accounts. Failure to maintain minimum balance in the account will attract levy of charges as specified by the Bank from time to time. For Savings Bank Account, the Bank may place restrictions on number of transactions, cash withdrawals, etc., for given period. Similarly, the Bank may specify charges for issue of cheque books, additional statement of accounts, duplicate pass book, folio charges, etc. All such details, regarding terms and conditions for operation of the accounts and schedule of charges for various services provided will be communicated to the prospective depositor while opening the account.
F) Savings Bank Accounts can be opened for eligible person / persons and certain organizations / agencies as per eligibility criteria advised by Reserve Bank of India (RBI) from time to time. Current Accounts can be opened by individuals / partnership firms / Private and Public Limited Companies / HUFs / Specified Associates / Societies / Trusts, etc. Term Deposits Accounts can be opened by individuals / partnership firms / Private and Public Limited Companies / HUFs/ Specified Associates / Societies / Trusts, etc.
G) The due diligence process, while opening a deposit account will involve satisfying about the identity of the person, verification of address, and compiling a customer profile. Obtaining recent photograph of the person/(s) opening / operating the account is part of due diligence process.
H) In addition to the due diligence requirements, under KYC norms, the Bank is required by law to obtain Permanent Account Number (PAN) or alternatively declaration in Form No. 60 or 61 as specified under the Income Tax Act / Rules.
I) Deposit accounts can be opened by an individual in his own name (status: known as account in single name) or by more than one individual in their own names (status: known as Joint Account). Savings Bank Account can also be opened by a minor jointly with natural guardian or with mother as the guardian (Status: known as Minor's Account). Mothers as guardians will be only for operation of the account on behalf of minors. Minors above the age of 10 will also be allowed to open and operate Savings Bank account independently. Deposits in the account of minors/minors with Natural Guardian will have restrictions as per Govt./RBI guidelines.
J) KYC once done by one branch of the bank will be valid on transfer of the account within the Bank as long as full KYC has been done for the concerned account. The customers are allowed to transfer their account from one branch to another branch without insisting on fresh proof of address and on the basis of a self-declaration from the account holder about his / her current address, subject to submitting proof of address within a period of six months. Periodical updation of KYC data would continue to be done by the Bank as per prescribed periodicity.
K) Operation of Joint Account - The Joint Account opened by more than one individual can be operated by single individual or by more than one individual jointly. The mandate for operating the account can be modified with the consent of all account holders.
L) The joint account holders can give any of the following mandates for the disposal of balance in the above accounts:
i. Either or Survivor: If the account is held by two individuals say, A & B, the final balance along with interest, if applicable, will be paid to survivor on death of any one of the account holders.
ii. Anyone or Survivor/s: If the account is held by more than two individuals say, A, B and C, the final balance along with interest, if applicable, will be paid to any one of the joint account holders or to the survivor(s) on death of any one/two account holders.
iii. Former or Survivor: If the account is held by two individuals say, A & B, the final balance along with interest, if applicable, will be paid to A on death of B. Similarly in case of death of A it will be paid to B.
iv. Latter or Survivor : : If the account is held by two individuals say, A & B, the final balance along with interest, if applicable, will be paid to B on death of A. Similarly, in case of death of A it will be paid to B.
The above mandate for opening joint accounts/disposal of balances become operational from the date deposit account is opened. This mandate can be modified by the consent of all the account holders. In case of joint accounts, the premature withdrawal of Term Deposits will depend on the mandate given by the depositors jointly at the time of opening the Term Deposit or at any time subsequently during the term/ tenure of deposit. If such a mandate has been obtained, premature withdrawal of Term Deposits by the surviving depositor is allowed without seeking the concurrence of the legal heirs of the deceased joint deposit holder.
M) The Term Deposit account holders at the time of placing their deposits can give instructions with regard to closure of deposit account or renewal of deposit for further period from the date of maturity. If no mandate is received till the date of maturity, the amount will be reinvested for the same period i.e. the period of original deposit, at the rate of interest prevalent on the date of maturity.
N) At the request of the NRI depositors, the Bank will register mandate / power of attorney given by him (in Bank’s format), authorizing another person (resident Indian) to operate the account on his behalf.
O) In the case of operative accounts, viz. Savings Bank and Current accounts, photographs of persons authorised to operate the account are obtained. In case of other deposits, viz., Fixed, Recurring, Cumulative, etc., photographs of all depositors in whose names the deposit receipt stands may be obtained except in the case of deposits in the name of minors where guardians' photographs should be obtained. Fresh photographs are not obtained when an additional account is desired to be opened by the account holder.
P) Customer may write cheques in Hindi, English or in the concerned regional language. Cheques bearing date in Hindi as per the National Calendar (Saka Samvat) are accepted for payment, if otherwise in order.
Q) NOMINATION FACILITY –
i) Nomination facility is available on all deposit accounts opened by the individuals in their individual capacity. This is not available in the name of an institution or society or in any representative capacity as the holder of an office or otherwise. e.g. M.D. of a company, Secretary of an Association, partner of a firm, Karta of a HUF, etc. However, the facility of nomination is available in respect of deposits held in the name of a sole proprietary concern also. Nomination can be made in favour of one individual only. Nomination so made can be cancelled or changed by the account holder/(s) any time.
ii) In case of depositors putting his/her thumb impressions on the prescribed Forms for making nomination, cancellation or change thereof, the form is required to be attested by two witnesses. Nomination can be made in favour of a minor also.
iii) Printing of name of Nominee is available in the Passbook/Term Deposit advices/statement of accounts, if a customer opts for this.
iv) Nomination facility is available for joint deposit accounts with operating instructions as 'E' or 'S' also. In the case of joint accounts, the nominee’s right arises only after the death of all the depositors. Bank recommends that all depositors avail of the nomination facility for smooth settlement of claim by the legal heirs in unforeseen circumstances. The nominee, in the event of death of the depositor/s would receive the balance outstanding in the account as a trustee of legal heirs.
v) Bank recommends that all depositors avail Nomination facility. If depositors do not want to give nomination, they will give in writing that they do not want nomination in the account. The depositor will be informed of the advantages of the nomination facility while opening a deposit account.
vi) An acknowledgment of Nomination details will be issued to the depositor/s.
R) Pass Book/ Statement of accounts :
A statement of account will be provided by the Bank to Current Account depositors periodically as per terms and conditions of opening of the account. The Bank will issue a Pass Book to Savings Bank account holders or alternatively a statement of account will be provided on request. E-mail statements will be sent to the customers who have registered their e-mail address at the Home Branch. If the current account customers do not provide their e-mail address nor request for a printed statement, they will not receive statements.
S) Transfer of Accounts :
The deposit accounts may be transferred to any other branch of the Bank at the request of the depositor. After the accounts are transferred, the account holder has to provide local address proof or submit a declaration to provide the new address proof within six months at the transferee branch, if the transfer is at a different centre.
T) Closure of Accounts :
i) Accounts can be closed on written request of the depositor. Request for closure of account should state the reason for closure. The pass book, unused cheque leaves and ATM cum Debit card (after cutting into two pieces across the magnetic strip) must accompany such request. Joint accounts can be closed only at the request of all such joint signatories.
ii) Under normal circumstances, we will not close depositors account without giving at least 30 days’ notice indicating the reasons for such closure. In such cases, account holder will be required to make alternate arrangements for cheques already issued and desist from issuing any fresh cheques on such account.
i) A minor can open Savings Bank Account and the same can be operated by the natural guardian or by minor himself / herself, if he/she is above the age of 10 years and can sign uniformly. Accounts can also be opened jointly with the guardian. No overdraft facility or loans/advances will be provided to minors.
ii) On attaining majority, the erstwhile minor should confirm the balance in his/her account, submit a fresh specimen signature, recent photograph, and PAN (Form 60/61 as applicable). He will also provide a declaration with proof of majority for activation of account as a major account. In absence of completion of these formalities, debits in the accounts are not permitted.
ACCOUNTS OF ILLITERATE PERSON
An illiterate person may open a Savings Bank account in his sole name or jointly with other person(s). The Bank may at its discretion open deposit accounts other than Current Accounts of illiterate person. At the time of withdrawal/ repayment of deposit amount and/or interest, the account holder should affix his / her thumb impression or mark in the presence of the authorized officer who should verify the identity of the person. The Bank will explain the need for proper care and safe keeping of the passbook etc. given to the account holder. The Bank official shall explain the terms and conditions governing the account to the illiterate person.
ACCOUNTS OF PHYSICALLY IMPAIRED PERSON
A physically impaired person may open an account in his sole name or jointly with other person(s). The Bank may at its discretion open deposit accounts other than Current Accounts. The account of such person may be opened provided he/she calls on the Bank personally along with a witness who is known to both the depositor and the Bank.
ACCOUNTS OF VISUALLY IMPAIRED PERSON
A visually impaired person may open Savings Bank account in his sole name or jointly with other person(s). The Bank may at its discretion open deposit accounts other than Current Accounts of visually impaired person. The account of such person may be opened provided he/she calls on the Bank personally along with a witness who is known to both the depositor and the Bank. All banking facilities such as cheque book, ATM facility, INB, lockers, retail loans etc. are offered to visually challenged persons without any discrimination.
ACCOUNTS OF DISABLED PERSONS WITH AUTISM, CEREBRAL PALSY, MENTAL RETARDATION AND MULTIPLE DISABILITIES
Guardianship certificate issued either by the District Court under Mental Health Act, 1987 or by the Local Level committees under the National Trust for the welfare of persons with Autism, Cerebral Palsy, Mental retardation and Multiple Disabilities Act, 1999 is required for the purpose of opening / operating accounts of such disabled persons. Branches give proper guidance to the guardians/managers of the disabled persons with autism, cerebral palsy, mental retardation and multiple disabilities so that they do not face any difficulties in opening of an account.
ADDITION OR DELETION OF THE NAME/S OF JOINT ACCOUNT HOLDERS
The Bank may at the request of all the joint account holders allow 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, the name of one of the original account holder must be retained after addition/deletion of name/(s).
The customer information collected from the customers shall not be used for cross selling of services or products by the Bank, their subsidiaries and affiliates. If the Bank proposes to use such information, it should be strictly with the consent of the account holder.
SECRECY OF CUSTOMERS ACCOUNTS
The Bank shall not disclose details / particulars of the customer's account to a third person or party without the expressed or implied consent from the customer. However, there are some exceptions, viz. disclosure of information under compulsion of law, where there is a duty to public to disclose and where interest of the Bank requires disclosure.
i) Interest shall be paid on Savings Bank/Term Deposit accounts of residents Indians and Non-resident (External) Rupee Deposits (NRE) and Ordinary Non-Resident Deposit (NRO) accounts of the NRIs, at the rate decided by the Bank within the general guidelines issued by the Reserve Bank of India from time to time. Interest is calculated on daily product basis. Interest rate on NRE and NRO deposits cannot be higher than those offered on comparable resident deposits. Interest rates on FCNR (B) deposits are linked to LIBOR/SWAP rates and subject to a ceiling prescribed by RBI.
ii) In Savings Bank, interest is payable at Quarterly intervals. In Term Deposits these are payable either quarterly, monthly at discounted rate or at calendar quarter basis as per the choice of customer.
iii) Interest on Term Deposits are calculated at quarterly intervals and paid at the rate decided by the Bank depending upon the period of deposits. In case of monthly payment, the interest shall be calculated for the quarter and paid at discounted value. For any broken period i.e. remaining days after completed quarters and deposits of less than a quarter, interest is calculated on daily product basis and a year comprises of 365 days. The interest on term deposits is calculated by the Bank in accordance with the formulae and conventions advised by Indian Banks' Association. Interest on term deposits are also paid on calendar quarter basis at the request of depositors for the accounts opened under this scheme.
iv) For FCNR (B) deposits the interest is calculated and paid at intervals of 180 days each and thereafter for the remaining actual number of days, on the basis of 360 days to a year. The depositor also has the option to receive interest on maturity with compounding effect.
v) The rate of interest on deposits are displayed in the branch premises. Changes, if any, with regard to the deposit schemes and other related services shall also be communicated upfront and shall be prominently displayed. These will also be displayed in the Bank’s website.
vi)The Bank has statutory obligation to deduct tax at source if the total interest paid / payable on all term deposits held by a person exceeds the amount specified under the Income Tax Act. The depositor, if entitled to exemption from TDS can submit declaration in the prescribed format at the beginning of every financial year. The declaration filed in Form 15G and 15H u/s 197A shall not be valid unless the person filing the declaration furnishes his PAN in such declaration. In case of failure to do the same, tax is deducted at the rate mentioned in the relevant provisions of the IT Act or at the rate in force or at the rate of 20%, whichever is higher. An acknowledgement of Form 15G/15H will be issued. Bank provides TDS Certificate in Form 16A, to their customers in respect of whom Income Tax has been deducted at source, well within the time-frame prescribed under the Income Tax Rules. Depositors can opt for deduction of TDS (on interest of Term Deposits) from either SB or CA maintained in the Bank and maintain sufficient balance for the same.
PREMATURE WITHRAWAL OF TERM DEPOSIT
The Bank on request from the depositor, at its discretion may allow withdrawal of term deposit before completion of the period of the deposit agreed upon at the time of placing the deposit. The Bank shall declare their penal interest rates policy for premature withdrawal of term deposit. The Bank shall make depositors aware of the applicable rate along with the deposit rate. In case of joint accounts, premature withdrawal of Term Deposit will depend on the mandate given by the depositors jointly at the time of opening the Term Deposit or any time subsequently during the term/ tenure of deposit as per mandate. In the event of the death of the depositor, premature termination of the term deposits would be allowed.
PREMATURE RENEWAL OF TERM DEPOSIT
In case the depositor desires to renew the deposit by seeking premature closure of an existing term deposit account, the Bank will permit renewal at the applicable rate on the date of renewal, provided the deposit is renewed for a period longer than the balance period of the original deposit. While prematurely closing a deposit for the purpose of renewal, interest on the deposit for the period it has remained with the bank will be paid at the rate applicable on the date of deposit to the period for which the deposit remained with the bank and not at the contracted rate. Further, the bank may levy penalty for pre-mature closure of an existing deposit at such rates as may be decided by the bank from time to time.
ADVANCES AGAINST DEPOSITS
The Bank may consider request of the depositor/s for loan / overdraft facility against term deposits on execution of necessary security documents.
SETTLEMENT OF DUES IN DECEASED DEPOSIT ACCOUNT
i) If the depositor has registered a Nomination with the Bank, the balance outstanding in the account of the deceased depositor will be paid to the nominee after the Bank satisfies itself about the identity of the nominee.
ii) The above procedure will be followed even in respect of a joint account where nomination is registered with the Bank. In the case of joint accounts, the nominee’s right arises only after the death of all the depositors.
iii) In a joint deposit account, when one of the joint account holders dies, the Bank is required to make payment jointly to the legal heirs of the deceased person and the surviving depositor(s). However, if the joint account holders had given mandate for disposal of the balance in the account in the forms such as "either or survivor, former / latter or survivor, anyone of survivors or survivor; etc., the payment will be made as per the mandate to avoid delays in production of legal papers by the heirs of the deceased.
iv) In the absence of nomination and when there are no disputes among the claimants, the Bank will pay the amount outstanding in the account of deceased person against joint application and indemnity by all legal heirs or the person mandated by the legal heirs to receive the payment on their behalf without insisting on legal documents up to the limit approved by the bank's board. This is to ensure that the common depositors are not put to hardship on account of delays in completing legal formalities.
v) Bank may call for Succession Certificates from the legal heirs of deceased depositors in cases a) where there are disputes and all the legal heirs do not join in indemnifying the Bank and b) in certain other exceptional cases where the Bank has a reasonable doubt about the genuineness of the claimant(s) being the only legal heir(s) of the depositor.
INTEREST PAYABLE ON TERM DEPOSIT IN DECEASED ACCOUNT
In the event of death of the depositor before the date of maturity of deposit and amount of the deposit is claimed after the date of maturity, the Bank shall pay interest at the contracted rate till the date of maturity. From the date of maturity to the date of payment, the Bank shall pay rate applicable on the date of maturity, for the period for which the deposit remained with the Bank beyond the date of maturity, as per the Bank's policy in this regard.
Insurance Cover for Deposits
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.
STOP PAYMENT FACILITY
The Bank will accept stop payment instruction from the depositors in respect of cheques issued by them. The acceptance will be in cases where the Cheque in question has not been paid by the Bank. Charges, as specified, will be recovered.
Accounts which are not operated for a considerable period of time will be transferred to a separate inoperative account status in the interest of the depositor as well as the Bank. The Bank will inform customers when there is no transactions in the account and the account is going to become in-operative. The depositor can request the Bank to activate the In-operative account after completing certain formalities. We do not charge for activation of Inoperative accounts.
At present Savings Bank and Current accounts are treated as ‘inoperative’ if there are no debit as well as credit transactions induced at the instance of customers in the account for a period of over two years. Customer mandated transactions are treated as customer induced transactions and the accounts are treated as operative. The list of unclaimed accounts where there is no transaction for more than 10 years is displayed on Bank’s website. The list contains names of the account holder(s) and their address. If claimants, find their name and address in the list they may visit their branch with available records as per the process given in the Bank’s website, to claim the amount.
RBI has established “Depositors Education and Awareness Fund (DEAF-2014)” under Section 26 of Banking Regulation Act 1949, where all the credit balance lying in the unclaimed accounts of the customers are transferred. The Bank is liable to pay the amount to the depositor/claimant and claim refund of such amount from the Fund.
REDRESSAL OF COMPLAINTS AND GRIEVANCES
Depositors have right to register his complaints/grievance if he is not satisfied with the service provided by the Bank. There are various channels a customer can lodge his grievance: in person, by telephone, by mail/post or by email/internet or by sending an SMS. If a complaint received by any of the above channels are not resolved within the prescribed time frame or he/she is not satisfied with the resolution provided by the Bank, he can approach Banking Ombudsman with his complaint or resort to other legal avenues for grievance redressals. Bank’s policy on Customer Service Grievance Redressal is available at Bank’s website: www.sbi.co.in
The Bank will levy service charges as approved by IBA/RBI/Bank’s Board. The applicable Service Charges will be displayed on the Bank’s website www.sbi.co.in and a notice of one month will be given in case of any upward revision in Service Charges.
INTIMATION TO CUSTOMERS ON CHANGES EFFECTED
The depositors will be informed of a change in the policy by either of the following:
The Bank reserves the right to amend/modify this Policy, as and when deemed fit and proper, at its sole discretion. Bank shall also endeavor, to review the Policy at annual intervals.