Bank Accounts

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Opening of deposit accounts :

  • All time deposit accounts shall be properly introduced. For all subsequent deposit, a simple Application-cum-Deposit slip is to be filled.

Period and minimum amount of different types of deposits:

  • Minimum period:-  90 days
  • Maximum period : - 36 months
  • The minimum amount accepted for fixed/short deposit is Rs.1, 000/-.

Operational instructions :

Term deposit accounts can be opened with instructions payable to ’either or Survivor', payable jointly, payable to any one of the depositors etc. It can also be opened with instructions payable to "Former or Survivor" or "Former, Survivors Jointly or Last Survivor" or "Latter or Survivor" in which case operational/ payment instructions at the time of opening the account or subsequent variations, if any, in these instructions, should be signed by all the joint depositors.
For premature deposits, signatures of all the holders are mandatory.

Deposit accounts of minors :

  • In sole name – if the minor is 10 years and above and can read and write.
  • In joint name with natural guardian if minors are less than 10 years of age.
  • There is no limit for accepting deposits from minors.
  • Renewal of deposits :

    • Submit duly discharged fixed/short deposit receipt along with request for renewal.
    • Without production of deposit receipt following  the procedure detailed here under:-

    i)   Letter of request to be given in prescribed format on a stamp paper.
    ii)  Duplicate receipt will be issued.
    iii) Renewal of the deposit will be as on date.
    iv) Fresh receipt is issued.

    Deposit receipt Payment on due date :

    • Deposit receipt/s duly discharged by all the depositors (on revenue stamp in  case of cash payment up to 20,000/-) with clear  payment instructions is to be given.
    • The amount of maturity value in case of deposit under simple interest deposit scheme, and the principal amount along with the residual interest, if any will be paid by:-
      • Credit of depositors account with the Bank.
      • Credit of depositors account with any other Bank through NEFT / RTGS.
      • Issuance of DD / Bankers Cheque as per instruction of the depositor.

    Third party/nominee/legal heir payment of deposit :

    • The proceeds of a deposit receipt is not payable to a third party or to a collecting bank unless the receipt is discharged and is accompanied by a separate letter of authority signed by all depositors authorising payment to the third party or to the Bank, as the case may be.

    Nominee vis-à-vis legal heirs :

    • If on the death of the depositor, both the nominee and the legal heir make their claims simultaneously in respect of the deposit, the bank would take note of the legal heir holding succession certificate.
    • However, such legal heirs are advised to bring from the court an injunction restraining the bank from effecting payment to the nominee/s.
    • The Bank will get valid discharge by paying the nominee so far as any legal heir has not produced, in the meanwhile, any decree, order, certificate or other authority from a court of competent jurisdiction.

    Prematured deposit Payment :

    • The deposit receipt duly discharged and the letter of request for prepayment signed by all the depositors is required.
    • Premature receipt date if less than 6 months, then no interest is applicable.
    • Premature receipt date if above  6 months, 3.50% interest is applicable.

    Rules regarding payment of interest on time deposits :

    • Interest accrued on a time deposit, would ordinarily be paid, only on maturity. However, at the request of the depositor,  interest on deposits of  6 months and over, can be paid before  maturity on the following basis:-
      • Monthly, quarterly or half yearly interest on completion of the month/quarter/half year calculated from the date of deposit or end of each calendar month / quarter / half year, whichever is later.
    • Standing Instructions are accepted for credit of periodical interest in case of monthly / quarterly / half yearly interest on deposits to customers Current / Savings Bank account.

    Procedure in case of lost receipts :

    • a. An application from the depositor is to be given.
      b. Applicants must be properly identified.
      c. An indemnity bond on stamp paper is to be obtained in the prescribed form  in all cases.
      d. One or two surety/ies considered good for the amount involved, must
      execute the indemnity along with the depositor/s.

    Addition of name in fixed deposit receipts & recurring deposit accounts:

    • If the existing depositors makes a request either to add the name of a close relative (his consent should be obtained) the name of one of the existing joint accountholders (he should also sign the letter of request), the same are allowed, as per under mentioned procedure –
    • A letter signed by the depositor/all the joint depositors should be given requesting the Bank to add the name of a relative/ friend the name of one of the existing joint depositors. However, a substitution of name is not permitted.
    • Fresh account opening form and KYC documents incorporating revised operational instructions, signed by the following should be obtained:-
    • In case of addition, the existing depositor/s and the person whose name is to be added.
    1. The fact of addition of the name or deletion of the name of one of the joint depositors will be noted on the relative deposit receipt under authentication along with the date of such addition / deletion.
    2. Fresh deposit receipt will not be issued.
    3. In case of demise of one of the depositors, the request for deletion of his name should be in writing supported by the death certificate, signed by all the surviving depositors giving revised operational instructions. If the surviving depositor/s’ request/s to add name/s of relative/s, such request may be acceded to and the additions may be made on the receipts.
    4. Deletion of name of joint accountholder/s in case of operational instruction - Payable to Former or Survivor, latter or Survivor or Former, Survivors jointly or the Last Survivor is not permitted.
    • Mode of repayment of time deposits.
    • In terms of Income Tax Act, 1961 as amended, where aggregate  amount of all deposits repayable after notice or repayable after  a period (i.e. all time deposits including matured time deposits) held by a person singly or jointly with others at a branch of the Bank together with interest to be paid on such deposits (i.e. excluding interest already paid) is  Rs. 20,000/- or more, the repayment will be made by means of "A/c  Payee" Banker's Cheque/draft or by crediting the account of such depositor.
    • Payment of periodical interest can be made in cash. (subject to RBI guideline & Income Tax act)

    Safe custody of deposit receipts :

    • At the request of depositor/s, account holders, FDRs / SDRs can be accepted in safe custody by obtaining specific written instructions from all the depositors regarding payment of interest, disposal of proceeds on the due date etc.
    • Deduction of Income Tax at source from payment of interest on time deposits (Section 194A of Income Tax Act 1961) (Sec.194A):
    • The Income Tax Act has been amended w.e.f. 1st July 1995 and as per provision of the Income Tax, TDS is applicable in case of Time deposits made  from 1st July 1995 and onwards.
    • The salient provisions of this section are as under-
      • Income tax is to be deducted in cases where the total interest paid or credited on all time deposits with a branch in the name of a depositor, whether singly or  jointly  (as first named person) exceeds Rs. 40,000/- in a financial year.
      • For this purpose time deposit means deposits repayable on the expiry of a fixed period i.e. Short Deposit, Fixed Deposit.
      • Recurring deposit, savings deposit and current deposit are excluded for this purpose.
      • Tax is to be deducted either at the time of credit to the account or payment of interest to the depositor whichever is earlier.
    • In case the depositor submits following Form before end of June every year, no tax may be deducted.
    • Non-corporate customers other than Senior Citizens - Form No.15G along with PAN (w.e.f. 1st April 2010)
    • Senior Citizens i.e. individuals of the age of 65 years or more - Form No.15H  along with PAN (w.e.f. 1st April 2010)
    • w.e.f. 1st April 2010 I.T. Department has made it mandatory to quote Permanent Account No. (PAN) by deductees in all cases where TDS is applicable, failure of which would attract the TDS at a higher rate of 20% (against normal rate of 10%) or normal rate whichever is higher. Further it has also been made compulsory to mention PAN on form No.15G / 15H w.e.f. 1st April 2010.
    • Thus, TDS is deducted where total interest exceeds Rs. 40,000/- on all time deposits as under -

    For Individuals:
    1. Where Form No.15G / 15H along with PAN submitted by the customer – NO TDS. Subject to individual income exempted under Income Tax for that year.
    2. Where Form No.15G / 15H without PAN is submitted by the customer – TDS @20%
    3. Where PAN is submitted by the customer – TDS @10%

    For others - TDS is deducted @20%
    Issue of certificate
    A consolidated TDS certificate will be issued at the end of financial year/quarterly.
    Treatment of Joint Deposits-
    For accepting deposits of senior citizens jointly, with other persons below the age of sixty years, under the special scheme for senior citizens, it should be ensured that the name of the senior citizen is given as the first name in the application.

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