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 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.
While adopting this policy, the bank reiterates its commitments to individual customers outlined in Bankers' Fair Practice Code of Indian Banks' Association. 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
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:
- "Demand deposits" means a deposit received by the Bank, which is withdrawable on demand;
- "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;
- "Term deposit" means a deposit received by the Bank for a fixed period withdrawable only after the expiry of the fixed period and include deposits such as Recurring / Reinvestment Income Certificate / Encash 24 / Short Term Deposits / Fixed Deposits / Monthly Income Certificate / Quarterly Income Certificate, etc.
- "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;
Account Opening and Operation of Deposit Accounts
- 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 to the customer at the earliest.
- 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.
- 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 chequebooks, 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 or from time to time as the case may be.
- 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)
- Current Accounts can be opened by individuals / proprietorship firms / partnership firms / Private and Public Limited Companies / Hindu Undivided Family (HUFs) / Associations / Societies / Trusts, etc.
- Term Deposits Accounts can be opened by individuals / proprietorship firms / partnership firms / Private and Public Limited Companies / HUFs/ Associations / Societies / Trusts, etc.
- 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 or through self introduction by way of production of certain documentary evidence and obtaining recent photograph of the person/s opening / operating the account are part of due diligence process.
- 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.
- Deposit accounts can be opened by an individual in his own name (known as account in single name) or by more than one individual in their own names (known as Joint Account). Savings Bank Account can also be opened by a minor jointly with the natural guardian or with mother as the guardian (known as Minor's Account). Minors above the age of 12 will also be allowed to open and operate saving bank account independently.
- For deposits below Rs 1 crore: 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 to the mailing address of the depositor. In the absence of such instruction from the account holder, the deposit after maturity shall be automatically renewed for a further period equal to the original period of the deposit.
- For deposits of Rs 1 crore and above: The Bank will seek instructions from the depositor/s as to the disposal of the deposit by sending intimation 7 days prior to the maturity date of term deposit by post or courier to the mailing address of the depositor. The depositor will be requested to contact the branch to convey disposal instructions latest by the maturity date of the deposit. If no intimation is received from the account holder regarding renewal, the deposit will continue as an overdue deposit. No renewal is to be carried out without the Bank's Treasury Department approval.
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.
- The joint account holders can give any of the following mandates for the disposal of balance in the above accounts:
- Either or Survivor: If the account is held by two individuals say, A & B, the final balance alongwith interest, if applicable, will be paid to survivor on death of anyone of the account holders.
- Anyone or Survivor/s: If the account is held by more than two individuals say, A, B and C, the final balance alongwith interest, if applicable, will be paid to the survivor on death of any two account holders.
- Former or Survivor: First named account holder can alone operate and has full rights over the account balances. The final balance alongwith interest, if applicable, will be paid to the survivor steps only on the death of the former.
- Latter or Survivor: Second named account holder can alone operate and has full right over the account balances. The final balance alongwith interest, if applicable, will be paid to the survivor only on the death of the latter.
- The above mandates will be applicable to or become operational only on or after the date of maturity of term deposits. This mandate can be modified by the consent of all the account holders.
- 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.
- Nomination facility is available on all deposit accounts opened by the 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.
- 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.
Statement of account
- A statement of account will be provided by the Bank to Savings Bank as well as Current Deposit Account Holders periodically as per terms and conditions of opening of the account. Alternatively, the Bank may issue a Pass Book to these account holders on request.
- The deposit accounts may be transferred to any other branch of the Bank at the request of the depositor.
- Interest shall be paid on saving account at the rate specified by Reserve Bank of India directive from time to time. However, 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 directives, interest shall be calculated at quarterly intervals on term deposits and paid at the rate decided by the Bank depending upon the period of deposits. In case of monthly deposit scheme, the interest shall be calculated for the quarter and paid monthly at discounted value. The interest on term deposits is calculated by the Bank in accordance with the formulae and conventions advised by Indian Banks' Association.
- The rate of interest on deposits will be displayed in the branch premises. Changes, if any, with regard to the deposit schemes and other related services shall also be communicated upfront to the deposit account holder.
- 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.
- 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.
- On attaining majority, the erstwhile minor should confirm the balance in his/her account. A Balance Confirmation Letter signed by the erstwhile minor (and the guardian, if the account was operated by the guardian singly or jointly with the minor) would be obtained. Fresh account opening forms with the operational mandate, photograph and fresh specimen signature of the erstwhile minor, duly verified by the natural guardian would be obtained and kept on record for all operational purposes.
Account of illiterate / blind person
- The Bank shall not discriminate while opening accounts for illiterate / blind and follow the guidelines of RBI from time to time.
- 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.
- 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.
- For illiterate persons only, the Bank may open a deposit account (except a current account). Normally, no chequebook 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.
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 customer information collected from the customers shall not be used for cross selling of services or products by the Bank, their subsidiaries and affliates. If the Bank proposes to use such information, it should be strictly with the consent of the account holder.
Secrecy of Customer's 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.
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. At present, the Bank charges a premature withdrawal penalty of 1.00% on the applicable rate for which the deposit has run with the Bank for deposits of Rs 5 crore and above. With regard to inter-bank deposits, premature withdrawal is not permitted. The rate applicable on premature withdrawal shall be the rate for that particular bucket of the amount-tenor matrix on the date of placement.
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 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 the existing 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
Renewal of overdue term deposits
- When a term deposit is renewed on maturity, on renewed deposit interest rate for the period specified by the depositor as applicable on the date of maturity would be applied.
- If the request for renewal is received after the date of maturity, such overdue deposits will be renewed with effect from the date of maturity at the interest rate applicable as on the due date, provided such request is received within 14 days from the date of maturity.
- In respect of overdue deposits renewed after 14 days from the date of maturity, the interest for the overdue period will be paid at the rates decided by the Bank from time to time.
- For deposits of below Rs 15 lakh, the deposit must run for a minimum tenor of 15 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.
- For deposits of Rs 15 lakh and above, the 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
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 the minor; however, a suitable declaration stating that loan is for the benefit of the minor is to be furnished by the depositor-applicant.
Settlement of dues in deceased depositor's account
- If the depositor has registered nomination with the Bank, the balance outstanding in the account of the deceased depositor will be transferred to the account of / paid to the nominee after the Bank satisfies about the identity of the nominee and on submission of documentary evidence of the death of depositor, etc.
- The above procedure will be followed even in respect of a joint account where nomination is registered with the Bank.
- 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.
- 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.
Interest payable on term deposit in deceased depositor's 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 simple interest rate at the applicable rate obtained 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.
- However, 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 prevailing on the date of maturity from the date of maturity till the date of payment.
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. The details of the insurance cover in force will be made available to the depositor.
- The DICGC insures all deposits such as savings, fixed, current, recurring, etc. deposits except the following types of deposits:
- Deposits of foreign Governments
- Deposits of Central/State Governments
- Inter-bank deposits
- Deposits of the State Land Development Banks with the State co-operative bank
- Any amount due on account of and deposit
Click here Banker's Fair Practice Code
Click here Cheque Collection Policy
The debt collection policy of the Bank is based on principle of dignity and respect to customers. The Bank believes in following fair practices with regard to collection of dues and repossession of security thereby fostering customer confidence and long-term relationship and thereby ensures that there is no coercive practice followed while collecting the dues.
The repayment schedule for any loan sanctioned by the Bank is fixed taking into account repayment capacity and cash flow pattern of the borrower. The Bank explains to the customer upfront the method of calculation of interest and how the Equated Monthly Installments (EMI) or payments through any other mode of repayment are appropriated against interest and principal due from the customers. The Bank expects the customers to adhere to the repayment schedule agreed to and approach it for assistance and guidance in case of genuine difficulty in meeting repayment obligations.
The Bank's Security Repossession Policy aims at recovery of dues in the event of default and is not aimed at whimsical deprivation of the property. The policy recognizes fairness and transparency in repossession, valuation and realization of security. All the practices adopted by the Bank for follow-up and recovery of dues and repossession of security are in consonance with the Law. The security repossession procedure is set in motion only after all attempts by the Bank to discuss with the borrower the ways and means to overcome the financial hurdles/default in payment have failed. As an exception, it is to be noted that the Bank has the right to possess the financed asset, as a preventive measure, even in instances where there has been no default but violation of the terms and conditions of the Loan Agreement.
The policy is based on the following guidelines:
- All communications to the customer are in writing, by telephone or through personal visit. The customer is contacted by telephone on the numbers (residence/work place/mobile) provided by him/her in the application form filled in at the time of taking the loan/modified subsequently as intimated to the Bank. If the customer is not responding/not reachable over telephone, or not paying even after telephonic request, the Bank's representatives make personal visits to the customer's residence/workplace during reasonable hours of the day.
- The Bank staff or any person authorized to represent the Bank in collection of dues or/and security repossession identifies himself / herself and displays the authority letter issued by the Bank upon request.
- The Bank respects privacy of its borrowers.
- The Bank is committed to ensure that all written and verbal communication with its borrowers are in simple business language and the Bank adopts civil manners for interaction with borrowers.
- Normally the Bank's representatives will contact the borrower between 0700 hours and 1900 hours, unless the special circumstance of his/her business or occupation requires the Bank to contact at a different time.
- Borrower's requests to avoid calls at a particular time or at a particular place are honoured as far as possible.
- The Bank documents the efforts made for the recovery of dues, as far as possible and the copies of communication sent to customers, if any, are kept on record.
- All assistance is given to resolve disputes or differences regarding dues in a mutually acceptable and in an orderly manner.
- Inappropriate occasions such as bereavement in the family or such other calamitous occasions are avoided for making calls/visits to collect dues.
- Up-to-date details of the recovery agency engaged by the Bank are displayed at its website.
- The Bank provides the loan account statement to its customers on request basis when changes in period of loan, quantum of EMI etc. take place. Changes in the rate of interest are communicated to the customers as and when they are effected.
- The Bank bears the cost of getting duplicate sale deed in case the original furnished to it is misplaced at its end on account of any eventuality.
Giving notice to borrowers
- While written communications, telephonic reminders or visits by the Bank's representatives to the borrowers place or residence are being used as follow up measures, the Bank does not initiate any legal or other recovery measures including repossession of the security without giving due notice in writing to the borrower for recovery of dues.
- The Bank follows all such procedures as required under law for recovery / repossession of security.
- The notice mentions the number of days within which the payment is to be made and also stipulates the minimum time that is given to the borrower to pay the debt, failing which the Bank will proceed to take possession of the asset.
- In the case of sale of an asset, a notice is issued to the borrower before proceeding with the sale of the asset.
Repossession of Security
- Repossession of security is aimed at recovery of dues and not to deprive the borrower of the property. The recovery process through repossession of security involves repossession, valuation of security and realization of security through appropriate means. All these are carried out in a fair and transparent manner.
- Repossession of security is done only after issuing the notice as detailed above in para 3.
- Due process of law is followed while taking repossession of the property. The Bank takes all reasonable care for ensuring the safety and security of the property after taking custody in the ordinary course of the business.
Valuation and Sale of Property
- Valuation and sale of property repossessed by the Bank is carried out as per legal provisions, if any, and in a fair and transparent manner.
- The Bank has a right to recover from the borrower the balance due, if any, after sale of property. Excess amount, if any, obtained on sale of property is returned to the borrower after meeting all the related expenses provided the Bank is not having any other claims against the customer.
Opportunity for the borrower to take back the security
- As indicated earlier in the policy document, the Bank resorts to repossession of security only for the purpose of realization of its dues as a last resort and not with the intention of depriving the borrower of the property. Accordingly, the Bank indicates its willingness to consider handing over possession of property to the borrower any time after repossession and before concluding the sale transaction of the property provided the Bank dues are cleared in full.
- If satisfied with the genuineness of the borrower's inability to pay the loan installments as per the schedule, which resulted in the repossession of security, the Bank may consider handling over the property after receiving the installments in arrears and all overdue and penal interest and expenses incurred on repossession of the security. However, this is subject to the Bank being convinced of the arrangements made by the borrower to ensure timely repayment of remaining installments in future.
- The Bank returns the repossessed security within 15 days to the borrower after settlement of all claims.