New Repayment Norm For Fixed-Deposits : RBI

Some banks insist on signatures of both the joint depositors for repayment of the amount on maturity of fixed/term deposits which are opened with instructions “either or survivor” or “former or survivor” clause. But the recent notification from RBI in Nov 2011, has made it easier for depositors. According to the new regulation, signatures of both depositors are not required for repayment of the proceeds of fixed/term deposits on maturity.

However, in case of premature withdrawals of Fixed Deposits, signatures of both the depositors are mandatory. If one of the depositors dies and the other intends to close the account, banks are allowed to make payment only after obtaining the consent of legal heirs of the deceased. But such permissions need not be required in case of maturity of FD.

The object of the norm is to address the issue of inordinate delays and the alleged poor customer service. Also it aims to provide a better customer service by banks to mobilize deposits.

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