Model
Policy on Bank Deposits have been recommended by the Committee
on Procedures and Performance Audit on Public Services
(CPPAPS) of Reserve Bank of India. Punjab National Bank
has adopted the Model Policy on Bank Deposits in its Board
meeting held on 11/09/2004.
Preamble
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.
The
contents of Model Policy on Bank Deposits are described
hereunder and can be viewed by clicking the following:
Types
of Deposit Accounts : -
While various deposit products offered by the Bank are assigned
different names. The deposit products can be categorised
broadly into the following types. Definition of major deposits
schemes are as under : -
i) “Demand deposits” means
a deposit received by the Bank which is withdrawable
on demand;
ii) “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;
iii) “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 / Double Benefit Deposits
/ Short Deposits / Fixed Deposits /Monthly Income Certificate
/Quarterly Income Certificate etc.
iv) Notice Deposit means term deposit
for specific period but withdrawable on giving at least
one complete banking day’s notice;
v) “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
A) 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 him and the final decision of the
Bank will be conveyed at the earliest to him.
B)
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.
C) 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 cheques books,
additional statement of accounts, duplicate pass book,
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.
D) 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 / partnership
firms / Private and Public Limited Companies / HUFs
/ Specified Associates / Societies / Trusts, etc.
Term Deposits Accounts can be opened by individuals
/ partnership firms / Private and Public Limited Companies
/ HUFs/ Specified Associates / Societies / Trusts, etc.
E) 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 and obtaining recent
photograph of the person/s opening / operating the account
are part of due diligence process.
F) 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.
G) Deposit accounts can be opened by
an individual in his own name (status : known as account
in single name) or by more than one individual in their
own names (status : known as Joint Account) . Savings
Bank Account can also be opened by a minor jointly with
natural guardian or with mother as the guardian (Status
: known as Minor’s Account). Minors above the
age of 10 will also be allowed to open and operate saving
bank account independently.
H)
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.
I) The joint account holders can give
any of the following mandates for the disposal of balance
in the above accounts :
i. 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.
ii. 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.
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.
J) At the request of the depositor,
the Bank will register mandate / power of attorney given
by him authorizing another person to operate the account
on his behalf.
K)
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
an intimation before 15 days of the maturity date of
term deposit.
L) Nomination facility is available
on all deposit accounts opened by the individuals. Nomination
is also available to a sole proprietory 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.
M) 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.
N)
The deposit accounts may be transferred to
any other branch of the Bank at the request of the depositor.
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INTEREST PAYMENTS
i)
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.
ii) 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.
iii) The rate of interest on deposits
will be prominently displayed in the branch premises.
Changes, if any, with regard to the deposit schemes
and other related services shall also be communicated
upfront and shall be prominently displayed.
iv) 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.
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MINORS’ ACCOUNTS
i) 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 10 years. The account can also be opened
jointly.
ii) On attaining majority, the erstwhile
minor should confirm the balance in his/her account
and if the account is operated by the natural guardian
/ guardian, fresh specimen signature of erstwhile minor
duly verified by the natural guardian would be obtained
and kept on record for all operational purposes.
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ACCOUNT
OF ILLITERATE / BLIND PERSON
The Bank may at its discretion open deposit
accounts other than Current Accounts of illiterate person.
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. Normally,
no cheque book 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. 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.
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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.
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CUSTOMER INFORMATION
The customer information collected from the customers shall
not be used for cross selling of services or products by
the Bank, their subsidiaries and affiliates. If the Bank
proposes to use such information, it should be strictly
with the consent of the accountholder.
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.
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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. The Bank shall make depositors
aware of the applicable rate along with the deposit rate.
PREMATURE RENEWAL OF TERM DEPOSIT
Incase 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 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.
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RENEWAL OF
OVERDUE TERM DEPOSITS
i) 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 request for renewal is received after the
date of maturity, such overdue deposits will be renewed
with effect from the date of maturity at 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, interest for the overdue period
will be paid at the rates decided by the Bank from time
to time. .
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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 minor, however,
a suitable declaration stating that loan is for the benefit
of the minor, is to be furnished by the depositor - applicant.
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SETTLEMENT OF DUES
IN DECEASED DEPOSIT ACCOUNT
i)
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, etc.
ii) The above procedure will be followed
even in respect of a joint account where nomination
is registered with the Bank.
iii) 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.
iv) 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 hardship on account of
delays in completing legal formalities
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INTEREST PAYABLE ON TERM DEPOSIT
IN DECEASED ACCOUNT
i) 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
at the applicable rate obtaining 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.
ii) 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
obtaining on the date of maturity from the date of maturity
till the date of payment.
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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.
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STOP PAYMENT FACILITY
The Bank will accept stop payment instruction
from the depositors in respect of cheques issued by them.
Charges, as specified, will be recovered.
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DORMANT ACCOUNTS
Accounts which are not operated for a considerable period
of time will be transferred to a separate dormant / inoperative
account status in the interest of the depositor as well
as the Bank. The depositor will be informed of charges,
if any, which the Bank will levy on dormant / inoperative
accounts. The depositor can request the Bank to activate
the account for operating it.
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SAFE DEPOSIT LOCKERS
This facility is not offered through
all bank branches and wherever the facility is offered,
allotment of safe deposit vault will be subject to availability
and compliance with other terms and conditions attached
to the service. Safe deposit lockers may be hired by an
individual ( being not a minor) singly or jointly with
another individual(s), HUFs, firms, limited companies,
associates, societies, trusts etc. Nomination facility
is available to individual(s) holding the lockers singly
or jointly. In respect of lockers held in joint names,
up to two nominees can be appointed. Joint locker holders
can give mandate for access to the lockers in the event
of death of one of the holders on the lines similar to
those for deposit accounts. In the absence of nomination
or mandate for disposal of contents of lockers, with a
view to avoid hardship to common persons, the bank will
release the contents of locker to the legal heirs against
indemnity on the lines as applicable to deposit accounts
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REDRESSAL
OF COMPLAINTS AND GRIEVANCES
Depositors having any complaint / grievance with regard
to services rendered by the Bank has a right to approach
authority(ies) designated by the Bank for handling customer
complaint / grievances. The details of the internal set
up for redressal of complaints / grievances will be displayed
in the branch premises. The branch officials shall provide
all required information regarding procedure for lodging
the complaint. In case the depositor does not get response
from the Bank within 60 days from date of complaint or
he is not satisfied with the response received from the
Bank, he has a right to approach Banking Ombudsman appointed
by the Reserve Bank of India.
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