1. Introduction
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.
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 recognises
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.
While adopting this policy, the bank reiterates its commitments to
individual customers outlined in ‘Code of
Banks’ Commitment to Customers’. This document is a broad framework under
which the rights of common depositors are recognized. Detailed operational
instructions on various deposit schemes and related services will be issued
from time to time.
2. Definitions
The various deposit products offered by the Bank can be categorised broadly into the following types. Definitions
of major deposits schemes are as under:
2.1. “Demand deposits” means a
deposit received by the Bank which is withdrawable on demand;
2.2. “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
specified period;
2.3. “Term deposit” means a deposit received by the Bank for a fixed
period withdrawable only after the expiry of the
fixed period. At present term deposits are accepted under the following scheme.
- Fixed Deposit
- Abhyudaya Cash Certificate
- Soulabhya Deposit
- Cumulative Deposit
- Honey Deposit
2.4. “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;
3. Account Opening and Operation of
Deposit Accounts
3.1. 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. 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 the customer and the final decision of the Bank
will be conveyed at the earliest to the customer.
3.2. 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.
3.3. 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 Saving Bank Account, the Bank may also 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 passbook, 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.
3.4. Savings Bank
Accounts can be opened for eligible person/ persons and certain organizations/
agencies (as advised by Reserve Bank of India (RBI) from time to time)
3.5. Current
Accounts can be opened by individuals/ partnership firms/ Private and Public
Limited Companies/ HUFs/ Specified Associates/
Societies/ Trusts etc.
3.6.
Term Deposits Accounts can be
opened by individuals/ partnership firms/ Private and Public Limited Companies/
HUFs/ Specified Associates/ Societies/ Trusts etc.
3.7.
The minimum tenor of domestic
deposit is 7 days and maximum 120 months. However, in case of minors, the
deposit may be kept till the minor attains majority i.e. 18 years.
3.8. The due diligence process, while opening a
deposit account will involve satisfying about the identity of the person,
verification of address, satisfying about his occupation and source of income.
Obtaining introduction of the prospective depositor from a person acceptable to
the Bank and obtaining recent photograph of the person/s opening/ operating the
account are part of due diligence process.
3.9. In addition to the due diligence
requirements under KYC norms, the Bank is required by law to obtain Permanent
Account Number (PAN) or General Index Register (GIR) Number or alternatively
declaration in Form No. 60 or 61 as specified under the Income Tax Act/
Rules.
3.10. 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). Minors above the age of 12
will also be allowed to open and operate saving bank account independently.
3.11. 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. The Savings Bank
Account opened by minor jointly with natural guardian/ guardian can be operated
by natural guardian only till the minor attains majority.
3.12. The joint account holders can give any of the following mandates for the
disposal of balance in the above accounts:
3.12.1. 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 anyone of the
account holders.
3.12.2. 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 the survivor on death of any two
account holders.
3.12.3. 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.
The above mandates will be applicable to or become operational during
the tenure of the term deposit and on or after the date of maturity of term
deposits. This mandate can be modified by the consent of all the account
holders.
3.13. At the request of the depositor, the Bank
will register mandate/ power of attorney given by the customer authorizing another
person to operate the account on his behalf.
3.14. 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 on the
date of maturity. In absence of such mandate, the Bank will seek instructions
from the depositor/s as to the disposal of the deposit by sending intimation
once before 15 days of the maturity date of term deposit by post or courier at
the last known address of the depositor.
3.15. Nomination facility is available on all deposit accounts opened
by individuals. Nomination is also
available to a sole proprietary concern account. 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. While making nomination,
cancellation or change thereof, it is required to be witnessed by a third
party. Nomination can be modified by the consent of account holder/s. Nomination can be made in favour
of a minor also.
3.16. Bank recommends that all
depositors avail nomination facility. 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. The depositor will be informed of the advantages of the
nomination facility while opening a deposit account.
3.17. A pass book will be provided by the Bank to Savings Bank and a statement
of account to Current Deposit Account Holders periodically as per terms and
conditions of opening of the account.
3.18.
The deposit accounts may be
transferred to any other branch of the Bank at the request of the
depositor.
3.19.
If the dealings/ transactions
in the account are not satisfactory i.e. detrimental to the interest of the
Bank, the Bank reserve the right to close the account by giving 30 days notice.
3.20.
Bank reserves the right to
amend, delete, or add any rules at any time and such alterations in the rules
will be notified by affixtures to the notice Board which shall be deemed to be
sufficient notice to the customer.
4. Minors’ Accounts
4.1. The 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 12 years. The account can also be
opened jointly.
4.2. On attaining majority, the erstwhile minor
should confirm the balance in his/ her account and if the account is operated
by the natural guardian/ guardian, fresh specimen signature of erstwhile minor
duly verified by the natural guardian would be obtained and kept on record for
all operational purposes.
5. Senior
Citizens’ Accounts
Bank may consider higher rate of interest to Resident Indian Senior
citizens who have completed the age of 60 years on their fixed deposits as
specified by the bank from time to time. Presently, additional interest at 0.75
% and monthly interest without discounting factor is offered for deposit of 1
year and above.
6. NRI Services
Bank offers vide range of deposit
schemes for Non Resident Indians which includes Non Resident Rupee account (NR(E)RA), Foreign
Currency Non- Resident Account (FCNR),Non-Resident Ordinary Account (NRO),
Resident Foreign Currency (Domestic ) Account (RFCD).
Opening and maintaining of Bank Accounts of Non- Resident Indian is
guided by the Foreign Exchange Management Act-1999 (FEMA) and interest on terms
deposits are revised based on LIBOR rates from time to time.
7.
Account of Illiterate
The Bank may at its discretion open deposit accounts other than Current
Accounts of illiterate person. The account of such person may be opened
provided he/ she call on the Bank personally along with a witness who is known
to both the depositor and the Bank. Normally, no cheque-book
facility is provided for such Savings Bank Account. 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/ blind person.
8. Account of Visually Impaired Persons
All Banking facilities including cheque book
facility, operation of ATM/ locker, Internet Banking etc are offered to Visually challenged without any discrimination.
9. Dormant Accounts
Accounts which are not operated for two years will be reckoned as
dormant accounts. The depositor will be informed of charges, if any, which the
Bank will levy on dormant/ inoperative accounts. The depositor can request the
Bank to activate the account for operating it.
10. Directives on Interest Payment and Term Deposits
10.1 Interest Payments
10.1.1. Interest shall be paid on saving account at the rate specified by
Reserve Bank of India
directive from time to time. Interest on savings bank shall be calculated on
the minimum balance to the credit of the deposit during the period from 10th
to the last day each calendar month and credited to the account before 10th
of March and September every year.
10.1.2. Term deposit interest rates are decided by the Bank within the general
guidelines issued by the Reserve Bank of India from time to time. In terms
of Reserve Bank of India
directive, interest shall be calculated at quarterly intervals on term deposits
and paid at the rate decided by the Bank depending upon the period of deposit.
Interest at monthly interval at discounted rate is also offered. Bank will
adopt the “Code for Banking Practice” issued by the Indian Banks Association
for the purpose of calculation of interest on domestic term deposits.
10.1.3. The rate of interest on deposits will be prominently displayed in the
branch premises. Changes, if any, with regard to the deposit schemes and other
related services shall also be communicated upfront by prominently displaying
it at branch premises and on the website.
10.1.4. 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 Bank will issue a tax deduction certificate (TDS
Certificate) for the amount of tax deducted. The depositor, if entitled to
exemption from TDS can submit declaration in the prescribed format at the
beginning of every financial year.
10.2. Premature Withdrawal 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.
10.3. Premature
Renewal of Term Deposit
Incase the depositor desires to renew the
deposit by seeking premature closure of an existing term deposit account, the
bank will permit the 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 to the period for which the deposit remained
with the bank and not at the contracted rate.
10.4. Renewal of Overdue Term
Deposits
If request for renewal is received on or after the date of maturity,
such overdue deposits will be renewed with effect from the date of maturity at
interest rate applicable as on the due date, provided such request is received
within 30 days from the date of maturity. In respect of overdue deposits
renewed after 30 days from the date of maturity, interest for the overdue
period will be paid at the rate decided by the Bank from time to time.
10.5. Advances against Deposits
The Bank may consider request of the
depositor/s for loan/ overdraft facility against term deposits duly discharged
by the depositor/s on execution of necessary security documents. The Bank may
also consider loan against deposit standing in the name of minor for the
benefit / necessity of the minor only, on submission of undertaking letter/
affidavit by the guardian.
10.6.
Payment of interest on term deposit maturing on Sunday/holiday/non-business
working day
In respect of a term deposit maturing for payment on a Sunday or a
holiday or a non-business working day (or Saturday in case of NRE deposits),
the bank should pay interest at the originally contracted rate on the deposit
amount for the Sunday/holiday/non-business working day (as also Saturday in
case of NRE deposits) intervening between the date of the expiry of the
specified term of the deposit and the date of payment of the proceeds of the
deposit on the succeeding working day.
11. Deceased Depositors’ Account
11.1. Interest Payable on Term
Deposit in Deceased Depositors’ Account
11.1.1. In case of death of a depositor before or after the due date,
interest for the period from the due date till the date of settlement shall be
simple interest prevailing on due date or on the date of settlement of claim
whichever is less.
11.1.2. In the
