With my own money, I opened a joint FD account with my father in the bank. And his accountant was the nominee. His father died and left no will.
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Suppose a person used to take care of his old father. Whereas, his brothers lived in other cities. With his money, he opened a joint FD account with his father in the bank. And his accountant was the nominee. His father died and left no will. Then that person tried to withdraw money from FD before maturity under either or survivor clause. However, his brothers sent him a legal notice. After this, he also got a stay from the district court, in which his brothers demanded a share in their father’s FD and demanded a ban on withdrawal.
For whom is it difficult?
Since his father was considered a joint holder in the documents, the bank had to comply with the court order. Many FD joint holders face this difficulty. Fixed deposits in all banks come with standard operating instructions. These also include either or survivor. At the same time, clauses like former or survivor and letter or survivor are given in some banks.
Banks ask customers to choose either or survivor clause. They explain to them that if the joint holder dies, the survivor will get the money. However, this is misleading. According to a circular issued by RBI in the year 2005, legal heirs of FD joint account can follow the procedure to recover the amount if there is no nomination.
RBI told what to do
Apart from this, it has been told in the campaign of RBI 1636738 that in case of joint deposit account, the nominee has the right only after the death of all the account holders. The difficulty arises when the FD holder wants to withdraw before maturity and one of the joint holders dies. This is because premature withdrawal requires the signatures of all the joint holders.
According to RBI, if the account was opened with survivorship clause, it will be the responsibility of the bank to pay the balance to the nominee after the death of the deceased account holder. However, banks are not working on the claims of the surviving joint holders. RBI had said in its notification that if one of the joint holders dies and premature withdrawal is to be done, then the consent of the legal heirs is necessary. However, if banks have already given permission for this from the depositors, then they can allow premature withdrawal.
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