ESAF Small Finance Bank (hereinafter referred to as “the Bank”), in furtherance of the objectives for which it is set up, shall primarily undertake basic Banking activities of acceptance of deposits in addition to lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries and unorganised sector entities. 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.
This policy 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.
While adopting this policy, the Bank reiterates its commitments to individual customers outlined in BCSBI Code of Commitment to Customers, Bankers' Fair Practice Code of Indian Banks' Association and applicable regulatory requirements.
2. Objectives of the Policy
The key objectives of this policy are as under:
- Provide greater transparency in dealing with individual customers and create awareness among customers of their rights with regards to deposit account.
- Lay down the framework on the types of deposits offered by the Bank and operations permitted in these deposits.
- Disseminate information with regard to various aspects of acceptance of deposits from the members of the public, conduct of various deposits accounts, permissible operations in various deposit 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.
- Ensure that the customer will get services they are rightfully entitled to receive without demand.
- Institutionalise a mechanism for disposal of deposits in case of death of the depositor/s.
This policy shall be applicable to all its employees and officers as well as Business Correspondent agents/ sub-agents across all branches/ business segments of the Bank. While the provisions of this policy are directly applicable to the staff that are facing clients, all employees of the Bank shall be guided by the principles of this policy.This policy shall be applicable to all deposits offered/ accepted or proposed to be offered/ accepted by the Bank and lays down a framework for accepting, operations, servicing and closure of all time and demand deposits held with the Bank.
4. Governance Structure
The Bank shall have the following governance structure for the approval and implementation of this policy.
The Management Committee shall comprise of the MD&CEO of the Bank, EVP Business and the Head of Departments/ Business, as required depending on the agenda of the meeting. This Committee shall, inter alia, perform the following functions
- Review the policy and make recommendations to the Board
- Review the implementation of this policy and periodically align it to the leading market practices and regulatory requirements
- Review business initiatives and strategy and business performance.
- Set targets for overall business and review the achievements on an ongoing basis
- Review the key regulatory and risk concerns as well as the adequacy of the risk management process and upgradation thereof
- Review the broad concerns in customer servicing and complaints.
New Product Approval Committee
The Committee shall approve any new product or product variant which forms part of the policy in alignment with this policy and other regulatory requirements. The Committee shall approve such products keeping into view the suitability and appropriateness of the customers for such product. Any product/ product variant in alignment with the policy shall be approved by the New Product Approval Committee.
The MD&CEO shall act as a chairperson for PAC. In his absence, the senior most official shall be the chairperson. The quorum for a meeting shall be 3 members including the Chairperson of the meeting.
All PAC members are required to be in consensus for the Product Concept Note to be approved with mandatory sign off to be provided by Head Risk & Compliance, Head of Information Technology and EVP Operations.Apart from the members above, special invitees may be included depending upon the subject and the proponents of the Product or its variant, for approvals. PAC members may delegate people as appropriate depending on the product presented in the committee.
The EVP Business shall prepare the Deposit policy in consultation with the Process Excellence & QMS, Risk & Compliance, Operations and IT Departments, which shall be put forward to the Management Committee and thereafter to the Board for approval. This policy shall seek to cover the broad types of deposits and shall not deal with each individual product/ product variant. The EVP Business shall ensure the review of the policy on an annual basis.
5. Types of Deposit Accounts
The Bank may choose to offer the following types of deposit products:
Demand Deposit means a deposit received by the Bank which is payable on demand. There are two types of Demand Deposits:
Savings deposits 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 the Bank during any specified period.
Current depositmeans a form of non-interest bearing demand deposit where from withdrawals are allowed any number of times depending upon the balance in the account or up to a particular agreed amountand shall also be deemed to include other deposit accounts which are neither Savings Deposit nor Time Deposit.
Time depositmeans an interest bearing deposit accepted by the Bank for a fixed period and shall also include deposits such as Recurring/Cumulative/Annuity /Reinvestment deposits and Cash Certificates. They are also referred to as Term Deposits.
Within these categories, there are specific accounts that can be opened, based on the requirements of the account holder.The Bank shall pay interest at quarterly rests to the depositor or compounded quarterly. The Bank shall pay interest at the specific request of the depositor at monthly rests also, but at a discounted rate.
The following are the illustrative types of Term Deposits:
The deposits are held for a particular tenor at a contracted rate but interest is paid at a fixed frequency.
- Deposits can be accepted for a period as prescribed by RBI from time to timecurrently ranging from 7 days to 10 years.
- Interest shall be payable quarterly/ monthly (at discounted rate).
- Interest may paid by cash (subject to certain conditions of Income Tax Act, 1961) or credited to operative account or as instructed
- Premature withdrawal of the Fixed Deposit is allowed subject to the penalty guidelines in force from time to time.
- The Bank is obliged to advise the requesting Depositor of such penalties as may be applicable and advise the actual impact of the request in financial terms, before acting upon such requests for premature withdrawals.
The deposits are held for a particular tenor at a contracted rate but interest is accumulated on quarterly compounding basis and the consolidated amount is paid at the time of maturity.
- Deposits can be accepted for a period as prescribed by RBI from time to time ranging from 7 days to 10 years.
- Interest is calculated on quarterly compounded rests. Interest on cumulative deposits is deemed as reinvested and paid at maturity.
- No interest outflow is allowed under this scheme till the maturity of the Term Deposit.
- Premature withdrawal of the Fixed Deposit is allowed subject to the penalty guidelines in force from time to time.
- The Bank is obliged to advise the requesting Depositor of such penalties as may be applicable and advise the actual impact of the request in financial terms, before acting upon such requests for premature withdrawals.
Flexi- Fixed Deposit (FFD) also known as Sweep in Term Deposit.This term deposit provides facility to link the term deposit to a saving account.
Whenever the balance in a savings account (that is linked to a FFD) falls short to clear any debits in the operative account, the FFD can be broken as per the set process of the Bank. Such breakages would be considered a premature withdrawal of the deposit and be subject to the guidelines governing the same.
This Term Deposit can be either Traditional Fixed Deposit or Cumulative Term Deposit. No Loans are permissible under the FFD.
Tax savings Term Deposit is a term deposit wherein the customer gets a tax benefit under Income Tax Act 1961 on the amount invested, although the interest paid on these deposits is taxable. This deposit is maintained for a fixed tenor of 5 years and cannot be prematurely withdrawn. No loans are permitted against such deposits.
The Bank has special deposit product for Senior Citizens which permits additional interest in respect of such deposits. These deposits can be traditional fixed deposits or cumulative fixed deposits
The Bank shall launch any new deposit mobilisation with the approval of the Board after ensuring compliance with the regulatory requirements.
The Bank shall provide its customers details of various types of Bank accounts that can be opened and highlight the key features for each type of account. The Bank shall ensure that the product material, brochures or any literature highlighting the terms and conditions as well as service charges/ fees of the product, is fair, clear and not misleading.
- The branch staff/ BC agents or sub-agents of the Bank shall 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 before opening any deposit account as defined in the KYC/AML Policy of the Bank.
- The Bank shall open accounts providing basic banking services to unbanked / disadvantaged sections of the society with relaxed customer acceptance norms as per regulatory guidelines as elaborated in the KYC/AML policy of the Bank.
- The Bank shall undertake due diligence process, while opening a deposit account which involves identification of the person, verification of address, satisfying about his occupation and source of income. The Bank shall obtain fresh photographs from the customer proposing to open the account.
- The Bank shall categorize customers based on the risk perception and prepare profiles of customers for the purpose of transaction monitoring.
- The Bank shall communicate to the customer the timeframe within which the account shall be opened. In case, if the account opening requires clearance at higher level, the Branch staff shall communicate the reasons for delay in opening of account.
- The Bank shall provide the prospective depositor with account opening forms and other material such as brochures indicating service charges, Code of Commitment to Customers. The Bank official opening the account shall explain the procedural formalities and provide necessary clarifications sought by the prospective depositor when he/she approaches for opening a deposit account.
- The Bank shall communicate to the prospective depositor all details regarding terms and conditions for operation of the accounts and schedule of charges and fees for various services provided while opening the account or from time to time as the case may be. The applicants can reach out to the branch or a Bank executive for any queries or clarification that they may have in relation to account opening.
- The Bank staff shall have the right to decline the opening of account if the account holder is not able or willing to provide necessary information regarding his address or identity.
- The Bank reserves the right, at its sole discretion, to open the bank account upon receipt of an application, and at such terms, as the Bank may prescribe from time to time.
The Bank shall instruct their branches to allow minors above the age of ten to open accounts independently. The Bank shall allow natural (mother or father) or legal guardians of the minor to operate the minor’s account.
The Bank shall not grant overdraft /loan to such minors.The Bank shall ensure that minor accounts are not overdrawn and always remain in credit.
The Bank shall permit minors above 10 years of age to open and operate independently savings bank account and use other facilities like ATM and cheque books. The Bank may however keep in view its risk management, fix limits in terms of age and amount up to which minors may be allowed to operate the deposit accounts independently. On obtaining majority, the minor shall confirm the balance in his/her account.
The Bank shall obtain from the account holder (erstwhile minor) on attaining majority, specimen signature, identification documents and his/her latest photograph to commence operations of the account.
Accounts for illiterate persons
The Bank shall allow a person to open any accounts provided the applicant shall be accompanied along with a witness, who is known to the Bank. The Bank shall not discriminate while opening accounts for illiterate/ blind and follow the guidelines of RBI from time to time.
The Bank official shall be present in case of persons with disabilities/illiterate persons/visually impaired person visits the branch for withdrawals/ repayment of term deposit and the account holder is required to affix his/ her thumb impression/mark. The Bank shall allow operations in the account as elaborated in the Code of Commitment to Customers/ Customer Service Policy of the Bank.
Disabled persons who are unable to write
The Bank shall open bank account for persons with disabilities and unable to write but capable of affixing thumb impression/ toe mark or any other mark or impression. The Bank shall allow the account holder/ any other person to operate the account subject to the conditions as mentioned in the Code of Commitment to Customers/ Customer Service Policy of the Bank.
Blind/Visually Impaired Person
The Bank shall ensure that there is no discrimination in offering any facility to a blind/ visually impaired person and shall allow 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 be offered to such customers.
Accounts under guardianship for Disabled (adult) persons with autism, cerebral palsy, mental retardation and multiple disabilities:
The Bank shall allow opening of accounts of persons with Autism, Cerebral Palsy, after appointing guardian/managers and shall also take note of the legal position and orders/certificates issued by the competent authority, under the acts applicable to such account holders, on a case to case basis. The opening of the accounts for such categories of persons would be allowed only under a specific approval from the Head Risk & Compliance of the Bank, who may avail of appropriate legal support to ensure that there are no violations by the Bank.
The Bank shall allow the deposit accounts to be opened by the account holder singly or jointly with any other eligible person.Joint accounts can be opened by more than one individual and can be operated either singly or jointly, as specified by the all the account holders. The operating rules in a joint account can be modified only with the consent of all account holders.
The joint account holders can give any of the following mandates for operations of the account:
Either or Survivor: This is applicable for accounts with 2 holders. The account can be operated by any one of the account holders during the lifetime of the account holders and the survivor in case of death of any of the account holders.
Anyone or Survivors: This is applicable for accounts with more than 2 account holders. The account can be operated by any one of the account holders during the lifetime of all the account holders and the survivors in the case of the death of any of the account holders.
Former or Survivor: This is applicable for accounts with more than 2 account holders. The account can be operated by the first holder of the account and the survivors in the case of death of any of the account holders.
Joint signatories: This is applicable for accounts with 2 or more account holders. The account shall be operated by all the account holders during the lifetime of all the account holders.
6.1.4 Addition / Deletion of 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 or allow an individual depositor to add the name of another person as a joint account holder. However, such ‘name change requests’ should not result in the total change of the original depositor / one of the original depositors. This is required to ensure that no unfair transfer of property is resorted to through the use of this mechanism.
The Bank shall allow the account holders to split the joint deposit amount in case of fixed deposit, if the period and aggregate amount of the deposit do not undergo any change. The percentage of split has to be advised in writing and signed by both/all the account holders and the bank be indemnified for any potential conflicts/legal issues arising out of such split up of the deposit.
The Bank shall register mandate/ power of attorney given by the customer authorizing anotherperson to operate the account on his/her behalf at the specific request of the depositor subject to adequate due diligence of the person being authorized to operate the account.
While obtaining such mandates/POA, it should be specified that the same will continue to remain in force, until any revocation of the same is specifically advised to the Branch of the Bank where such account resides. The Bank will be absolved of any liability arising from the actions of the mandate/POA holder till such time a revocation advice/notice is received by the authorized official of the Bank at the Branch (normally the Branch Manager, but will be specified for each branch considering other parameters like size of the Branch, etc., from time to time).
6.1.6. Additional Interest Rate on Domestic Deposits:
The Bank may offer an additional interest rate over and above the prevailing rate of interest in the Bank to bank’s staff subject to
- Additional interest rate is applicable only during the tenure of employment
- If employees are taken on deputation from another bank, the bank from which they are deputed may allow additional interest in respect of the savings or term deposit account opened
- Additional interest paid to the spouse/ joint holder/ association where the staff is a member after obtaining a declaration from the staff(depositor) that the money deposited is that of his own.
The Bank may also give additional rates to their retired senior citizen staff by virtue of them being retired members.
The Bank shall open savings and current accounts for eligible persons in line with the applicable regulatory requirements, which shall be elaborated in the Product note on savings accounts and current accounts.
In respect to the BSBDA accounts, the Bank shall not stipulate any minimum balance to be maintained. In accounts other than BSBDA, the Bank shall stipulate the minimum balance to be maintained on a monthly/ quarterly/ annual basis, which shall be communicated upfront to the customer by way of the Schedule of Charges.
The Bank shall levy penal charges in the event of non-maintenance of minimum balance, which shall be notified to the customer clearly by SMS/ email/ letter etc. If the customer does not restore the minimum balance within 1 month from the date of notice of the shortfall, the Bank shall recover the penal charges after due intimation to the customer. However, if the account is inoperative, the Bank shall not charge penal charges for minimum balance.
Information on other charges, where applicable, for services rendered by the Bank are provided in the Schedule of Charges that are included as part of terms and conditions governing operation of such accounts, which shall be explained by the Bank staff and also given to the customer at the time of account opening.
The Bank shall offer monthly statement of account at the option of its savings bank account holders (individuals). The statement of accounts shall have full address, telephone number, MICR and IFSC codes of the branch.
The Bank shall regularly update the monthly statement of account with brief, informative and intelligible entries.
The Bank shall ensure that the statement of accounts in respect of current accounts shall be sent in a staggered manner.
The Bank will accept stop payment instruction from the account holders in respect of cheques issued by them within the specified time frame. Charges, as specified in the Schedule of Charges, will be applied. In case of loss of the cheques in transit or clearing or at the branch, the Bank staff shall immediately inform the customer so that he/ she can place the stop payment instructions in respect of such cheques. Such stop payment of instruction shall not be subject to any charges.
The Bank shall pay interest on savings account and term deposits at the rates as decided by the Bank within the general guidelines issued by the RBI from time to time. The Asset Liability Management Committee has the responsibility to arrive at the interest rates on deposits, from time to time.
The Bank shall display the rate of interest on deposits in the branch premises/website. The Bank shall communicate upfront to the deposit account holder of any changes, if any, with regard to the deposit schemes and other related services.
The Bank shall determine the rate of interest on savings account on a daily product basis. The interest should be credited on regular basis whether the account is operative or not. The Bank shall pay thecustomerinterest on his savings balance on quarterly basis.
For the purpose of interest calculation for actual number of days (in case interest is calculated for incomplete month), the denominator is taken as 365 days and 366 days in case if it is a leap year.
Interest on overdue fixed deposits remaining unclaimed shall be calculated on savings bank interest rate till the date of payment to the depositor.
The Bank shall publicise the nomination facility by printing compatible message on cheque books, and any other literature reaching the customers as well as by launching periodical drives to publicise the Nomination Facility and its benefits.
The Bank shall recommend nomination in respect of deposit accounts opened by individuals or sole proprietary concerns. The Bank shall ensure that the nomination is made only in favour of individuals.No association, trust or society shall be permissible as a nominee. The Bank staff shall communicate to the customer that there cannot be more than 1 nominee per deposit account, at any point in time. Nominations can be cancelled during the tenure of the deposit account and re-nominations effected.
The Bank shall ensure that the account opening form provides for the nomination related fields. 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 official shall follow the procedure as elaborated in the Code of Customer’s Commitment to Customers.
The Bank shall have a proper system of acknowledging the receipt of the duly completed form of nomination, cancellation and/ or variation of the nomination, which shall be given to all the customers irrespective of whether the same is demanded by the customers.
The Bank shall indicate the name of the Nominee in the Statement of Accounts/ FDRs, in case the customer agrees for the same, in addition to the legend “Nomination Registered”.
The Bank shall inform the customers that all bank deposits are covered under the insurance scheme offered by Deposit Insurance and Credit Guarantee Corporation of India (DICGC) subject to a maximum of Rs 1 lakh. The Bank shall communicate to the customer that the limit of Rs 1 lakh is inclusive of both the principal and accrued interest on such deposit held by the customer in the same capacity and right in all branches of the Bank.
However,deposits held by banks, central and state governments (including quasi government bodies, local autonomous bodies, Government Corporation) and foreign government are not covered under the scheme.
The Bank shall calculate interest at quarterly intervals on term deposits (of tenor >90 days) and paid at the rate decided by the Bank relevant to the period of deposits. In case of time deposits with monthly interest pay-outs, the Bank shall calculate the interest for the quarter and pay the interest monthly at discounted value.
The rate of interest on deposits will be prominently displayed in the branch premises and also on the Bank’s website. Changes, if any, with regard to the deposit schemes and other related services shall also be communicated upfront and shall be prominently displayed as mentioned in the Code of Commitment to Customers.
The Bank shall compute interest based on the actual number of days in a year. In case, the Deposit is spread over a leap and a non-leap year, the interest is calculated based on the number of days i.e., 366 days in a leap year & 365 days in a non-leap year.
The Bank shall round off transactions including payment of interest on deposits to the nearest rupee i.e., fractions of fifty paise and above shall be rounded off to the next higher rupee and fractions of less than fifty paise shall be ignore.
Payment of interest on term deposit maturing on Sunday/holiday/non-business working day
The Bank shall pay interest at the originally contracted rate on the original principal deposit amount for the Sunday/ holiday/ non-business working day, 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.
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 shall give an acknowledgement at the time of receipt of Form 15G/15H submitted by customers for non-deduction of tax. The Bank shall put in place systems that will enable it to provide Form 16A to customers, pertaining to Tax Deducted at Source (TDS) as per time-frame prescribed under the Income Tax Rules.
The Bank shall deduct TDS at the applicable rates as directed by the Government of India under provisions of the Income Tax Act, 1961. TDS amounts collected during the course of a calendar month shall be deposited with the tax-authorities before the 5th of the succeeding month with due particulars of the individual depositors on whose account the TDS has been recovered.
The Bank is not authorized to effect any refund, and shall advise depositors who seek such refunds to effect a claim of the same from the Income Tax Authorities. The Bank shall provide all relevant documents to enable the Depositor to make such a claim.
At the time of opening of the deposit, the Bank shall inform the customer of the premature withdrawal option, if available for the deposit being opened and the penal charges in respect of such withdrawal. The Bank shall also publicise this information by way of its website and the notice board at branches.
The Bank shall incorporate a clause in the account opening form for term deposit account itself to the effect that in the event of the death of the depositor, premature termination of term deposits would be allowed. The conditions subject to which such premature withdrawal would be permitted may also be specified in the account opening form. Such premature withdrawal would not attract any penal charge.
The Bank has the option to disallow premature withdrawal of large fixed deposits (fixed deposits over Rs 15lakh) held by account holders including individuals and HUFs provided it was made known to the customer at the time of opening of the account. The Bank shall ensure that all fixed deposits under Rs. 15 lakh have the premature withdrawal option.
The Bank at its discretion shall allow withdrawal of term deposit beforecompletion of the period of the deposit agreed upon at the time of placing the deposition request from the depositor/s. Such premature withdrawal shall be subject to the penalty applicable on premature withdrawal.
The term deposit must run for a minimum tenor of 7 days from the date of depositor request in order to earn any interest. Premature withdrawals before this minimum tenor will result in zero interest payment to the client.
In case the depositor desires to renew the deposit by seeking premature closure of an existing term deposit account, the Bank shall 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.
When a term deposit is renewed on maturity, the Bank shall apply the interest rate as applicable on the date of maturity on the maturity amount.
If a Term Deposit matures and proceeds are unpaid, the amount left unclaimed with the Bank shall attract rate of interest as applicable to savings deposits.
If a customer has a Savings Account and has linked it to the Term Deposit then the maturity proceeds can be swept to his/her Savings Account as on the Date of Maturity.
The term deposit holders shall give specific instructions to the Bank with respect to the disposal of the deposits at the time of account opening. If such mandate is not available, then the Bank will intimate depositors of term deposits by post, courier, email or SMS at the registered contact details of the depositor 15 days prior to the date of maturity of the deposit.
The Bank may offer advances against term deposits to depositor/s provided such term deposits receipts duly discharged by the depositor/s are available with the Bank along with the necessary security documents. Such Advances against Term Deposits (AATD) shall not be more than 75% of the Deposit Amount. Such AATD shall be for a period that matches the balance period of the tenor of the underlying deposit. To clarify, if the Deposit is to run for a further period of 8 months (of its original contracted period of say 1 year), then the AATD shall also run only for 8 months and the Advance shall be co-terminus with the underlying deposit.The Bank shall charge such advances without reference to the marginal cost of funds based on lending rate – but at 3% above the rate of interest applicable to the underlying deposit - if the advance is given against the term deposits and the deposit stands in the name of either singly or jointly:
- the borrower, either singly or jointly;
- one of the partners of a partnership firm and the advance is made to the said firm;
- the proprietor of a proprietary concern and the advance is made to such a concern;
- a minor who is below the age of 10 years whose guardian is competent to borrow on behalf of the minor and where the advance is made to the guardian of the ward and only if it is the necessity of the minorand a minor who is between the age of 10-18 years (account being operated jointly with guardian), whose guardian is competent to borrow on behalf of the minor and where the advance is made to the guardian of the ward and only if it is the necessity of the minor.
The Bank shall not lend advances against Term Deposit for minors if a minor (for age of above 10 years to 18 years) operates his/her account independently.
The Bank shall not
- pay interest/ countervailing interest on current accounts or margin money maintained in current accounts in any form or manner or accept any interest-free deposits except in current accounts
- pay interest on “deposit at call” receipts issued by it to the tenderers (contractors) for submission to Government Departments/Semi-Quasi Government bodies, local bodies, etc. against the money held in current account.
- employ/ engage any individual, firm, company, association, institution or any other person for collection of deposit or for selling any other deposit linked products on payment of remuneration or fees or commission in any form or manner except the use of Business Correspondents
- pay brokerage in the form of commission or gift or incentives on deposits in any manner or in any other form to any individual, firm, company, association, institution or any other person except:
- reasonable commission paid to agents employed to collect door-to-door deposits under a special scheme such as the use of services of intermediaries/ Business Correspondents in providing financial and banking services including collection of deposits
- inexpensive gifts to customers costing not more than Rs. 250 and
- incentives granted to staff members as approved by RBI from time to time.
- launch prize/lottery/free trips (in India and/or abroad), etc. oriented deposit mobilisation schemesincluding online remittance schemes
- resort to unethical practices of raising of resources through agents/third parties to meet the credit needs of the existing/prospective borrowers or to grant loans to the intermediaries based on the consideration of deposit mobilisation
- issue any advertisement/literature soliciting deposits from public highlighting only the compounded yield on term deposits without indicating the actual rate of simple interest offered for the particular period
- accept deposits from/at the instance of private financiers or unincorporated bodies under any arrangement which provides for either issue of deposit receipt/s favouring client/s of private financiers or giving of an authority by power of attorney, nomination or other-wise, for such clients receiving such deposits on maturity
- grant advances against fixed deposit receipts or other term deposits of other banks.
- open savings accounts in the name of Government departments/bodies depending upon budgetary allocations for performance of their functions/Municipal Corporations or Municipal Committees/ PanchayatSamitis/State Housing Boards/Water and Sewerage/Drainage Boards/State Text Book Publishing Corporations/ Societies/Metropolitan Development Authority/ State/ District Level Housing Co-operative Societies, etc. or any political party or any trading/business or professional concern, whether such concern is a proprietary or a partnership firm or a company or an association.
8.Dormant/ Unclaimed Deposits/ Inoperative Accounts
A savings as well as current account, which are not operated for a period of two years, would be treated as a dormant/ account. Inoperative accounts are those in which there are no customer induced transactions for one year or more. The depositor can request the Bank to activate the account for operating it.
The Bank shall conduct an annual review of accounts in which there are no customer induced transactions including credits or debits other than levy of service charges of credit of interest,for the last one year. The Bank shall send letters to the customers advising them to transact in the account, failing which the account would be classified as inoperative if there are no transactions for the succeeding one year.If the letters are returned undelivered, they may immediately be put on enquiry to find out the whereabouts of customers or their legal heirs in case they are deceased.
In case the account has turned inoperative due to shift of address of the customer, the branch officials shall assist the customer in transferring the account to any branch which is within the proximity of the customer. The branch officials shall try to contact any other persons related to the customer such as introducer, employer or any other persons whose contact details are available with the Bank.
The Bank shall not levy any charges for activation of the accounts. The Bank shall credit the interest on savings bank accounts on regular basis whether the account is operative or not.
The standardised Customer Request Form for activating an inoperative account should be available at the branches. The customer is expected to submit the same citing the reasons for not operating the account along with the documents for proof of identity and address. The Bank shall ensure that the branch officials do not inconvenience the customers whose accounts are inoperative, in any form.
Operation in such accounts may be allowed after due diligence as per risk category of the customer. Due diligence would mean ensuring genuineness of the transaction, verification of the signature and identity, etc.
The Bank shall ensure that the amounts lying in inoperative accounts ledger are properly audited by the internal auditors/ statutory auditors of the Bank.
Unclaimed deposit accounts mean accounts, which have not been operated upon the last ten years. In the case of money deposited for a fixed period, the said term of ten years would be reckoned from the date of the Maturity of such fixed deposits.
The Bank shall display the list of unclaimed deposits/inoperative accounts which are inactive/ inoperative for ten years or more on its website. The list so displayed on the websites shall contain only the names of the account holder(s) and his/her address in respect of unclaimed deposits/inoperative accounts
9. Closure of Account
In absence of a mandate by 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, the Bank shall retain the proceeds of the fixed deposit in a separate account on which savings bank rate of interest shall be paid to the depositor.
The Bank shall close the accounts either based on written instruction from the customer or suomoto by the Bank, where necessary, in line with the Code of Commitment of Customers and the KYC/AML Policy of the Bank.
The Bank shall close the current/savings account upon customer’s request within 3 working days of receiving instructions, subject to the customer completing all formalities and submitting all required documents.
The Bank shall maintain complete confidentiality of the customers’ information and shall not disclose details/ particulars of the customer's account to a third person or party. The Bank shall not share any such information for the purposes of cross-selling. In certain exceptions, the Bank shall share the customer information:
- Where disclosure is under compulsion of law
- Where there is duty to the public to disclose
- Where interest of bank requires disclosure and
- Where the disclosure is made with the express or implied consent of the customer.
The Bank shall obtain necessary information from the customer in order to ascertain the identity of the customer. Any additional information sought by the Bank shall only be on a voluntary basis and the Bank official shall explain to the customer the reasons on why such information is necessary/ required.
Accounts with survivor/nominee clause
In the case of deposit accounts where the depositors had utilised the nomination facility and made a valid nomination, the Bank shall make the payment of the balance in the deposit account to the survivor(s) and the nominee of the deceased deposit account holder jointly: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, the payment will be made as per the mandate to avoid delays in production of legal papers by the heirs of the deceased account holder.
The Bank shall exercise due care and caution in establishing the identity of the survivor(s)/ nominee and the fact of death of the account holder, through appropriate documentary evidence such as KYC for nominees and Death Certificate for the Account Holder.The Bank shall desist from insisting on production of succession certificate, letter of administration or probate, etc., or obtain any bond of indemnity or surety from the survivor(s)/nominee, irrespective of the amount standing to the credit of the deceased account holder.
The Bank shall confirm that there is no order from the competent court restraining the Bank from making the payment from the account of the deceased. The Bank shall inform the survivor(s)/ nominee that he/ she would be receiving the payment from the bank as a trustee of the legal heirs of the deceased depositor and that such payment to him shall not affect the right or claim which any person may have against the survivor(s) / nominee.
Accounts without the survivor/ nominee clause
In case where the deceased depositor had not made any nomination or for the accounts other than those styled as "Either or Survivor" (such as single or jointly operated accounts),theBank shall, keeping in view their risk management systems, fix a minimum threshold limit, for the balance in the account of the deceased depositors, up to which claims in respect of the deceased depositors could be settled without insisting on production of any documentation other than a letter of indemnity. The Bank shall release the balances of the deceased depositor to their legal heirs upto Rs ____ without any letter of indemnity or any other documentation.
Premature Termination of term deposit accounts
The Bank shall permit premature closure of a joint deposit only if all the deposit holders sign a request to that effect. In the case of Term deposits with operating instructions Either or Survivor, Former Or Survivor, Latter Or Survivor and Anyone Or Survivor. In the event of death of one of the joint holders and in the absence of relevant mandate, premature closure of such deposit will be allowed only if the legal heirs of the deceased agree for such premature closure. In cases where relevant mandate is available with the Bank, premature closure of such deposits shall be allowed in the favour of survivors.
Treatment of flows in the name of the deceased depositor
In order to avoid hardship to the survivor(s) / nominee of a deposit account, with regard to the treatment of flows in the name of the deceased account holder, the Bank shall consider adopting either of the following approaches:
The Bank, if authorized by the survivor(s)/ nominee of a deceased account holder, shall open an account styled as 'Estate of Shri ________________, the Deceased' where all the pipeline flows in the name of the deceased account holder could be allowed to be credited, Debits to such accounts are not permitted.
Alternatively, the Bank,if authorised by the survivor(s)/ nominee, shall return the pipeline flows to the remitter with the remark "Account holder deceased" and shall intimate the survivor(s) / nominee accordingly
Payment of interest in case of death of depositor
In the case of balances lying in current account standing in the name of a deceased individual depositor/sole proprietorship concern, interest should be paid from the date of death of the depositor till the date of repayment to the claimant/s at the rate of interest applicable to savings deposit as on the date of payment.
The Bank shall pay interest on term deposits in the name of the deceased depositor/s at the contracted rate till the date of maturity in the event of death of the depositor takes place before the date of maturity of deposit and amount of the deposit is claimed by survivor/ nominee after the date of maturity.The Bank shall pay interest at savings deposit rate obtaining on the date of maturity from the date of maturity till the date of payment in the case of death of the depositor after the date of maturity of the deposit, the Bank shall pay interest at savings deposit rate obtaining on the date of maturity from the date of maturity till the date of payment
Time limit for settlement claims
The Bank shall settle the claims in respect of deceased depositors and release payments to survivor(s)/ nominee(s) within a period not exceeding 15 days from the date of receipt of the claim subject to the production of proof of death of the depositor and suitable identification of the claim(s), to the Bank's satisfaction
The Bank shall provide the claim forms on its Bank’s website to facilitate timely settlement of deceased claims.
With respect to claims for persons missing for more than 7 years, the Bank shall obtain legal opinion and settle such claims by survivors/ nominees as detailed in para 11.1 of this policy subject to production of evidence/ documentation such as FIR or police complaint and letter of indemnity of the missing person as deemed adequate by the Bank.
If the customer is unhappy or has any complaint regarding the products/ services offered to him/ her, the designated authority of the Bank shall handle customer complaint/ grievances raised by depositors.
The Bank shall display the names of the nodal officers for redressal of complaints/ grievances in the branch premises and internal set up for redressal of complaints shall be displayed on the Bank’s website. The branch officials shall provide all required information regarding procedure for lodging the complaint. The customer’s grievance shall be handled in the manner as elaborated in the Customer’s Grievance Redressal Policy of the Bank
13. Reporting requirements
The following matters shall be reported to the Management Committee by the EVP Business:
- Details of the deposit strategy with the review on its performance
- Details of frequent non-compliances to regulatory/ statutory framework and measures undertaken to ensure compliance
- Details of all frauds above Rs 1 lakh with the modus operandi and corrective action taken
- Details of the categories of customer complaints and customer initiatives taken in that regard
- Minutes of the previous meetings and action on the suggested matters
The Bank shall, within 30 days after close of each calendar year submit a return in the prescribed form as included in the Regulatory Reporting Framework and Calendar of the Bank, to RBI as at the end of each calendar year (i.e., 31st December) of all accounts in India which have not been operated upon for 10 years.
The Bank shall retain all customer records at least for a period of 8years from the date of the transaction so as to permit the reconstruction of the customer transaction. The Bank shall also retain the KYC records of the customer at least for a period of 8years from the date of cessation of the relationship with the customer.
15.Policy Review and Updates
The policy shall be reviewed by the Board as and when required or at least annually for incorporating regulatory updates and changes, if any.
Last date of review: DDMMYYYY
- RBI Master Direction – Interest Rate on Deposits dated March 3, 2016
- RBI Master Circular on Interest Rates on Domestic, NRO and NRE Accounts dated July 1, 2015
- RBI Master Circular on Customer Service in Banks dated July 1, 2015
- RBI guidelines on Small Finance Banks dated November 27, 2014
- IBA Model Deposit Policy
- IBA Model Customer Rights Policy
- IBA Code of Banking Practice