How to select Nominees for bank accounts? | The actions to be required by nominee after death of Account holder

August 20th, 2010| How To.

How to select Nominees for bank accounts? | The actions to be required by nominee after death of Account holder

More than 1100 crore rupees are lying in the bank accounts in our country.  With no people to claim the money, the banks are also facing problems.

According to the report RBI has released recently, nearly 1100 crore rupees in lying in the banks in India.  These accounts mainly belong to individual persons and undivided Hindu families.  The main reason behind this is the death of the account holders.

These problems are arising because the account holders are not mentioning the names of the nominees in their applications.  The Indian Government Banking law 1983 is being revised to solve such problems.  It has advised to provide the nomination facility to the account holders.  So banks have made it compulsory to mention the name of nominee in the application form.  The problems are coming with the existing accounts.  Existing account holders are not paying any interest to the advice of the banks to name a nominee.  Some account holders are not even aware of this matter.  If something is happened to the account holder, his heirs are facing problems because of this.  So it is very important to utilize the nomination facility provided by the banks, so that the dependents do not face any problems.

Consult the banks for nomination facilitity for new accounts or existing accounts.  Form DA-1 has to be submitted for this.  If the name of the nominee is mentioned, the amount can be claimed by the nominee if something happens to the account holder.

Nomination facility is available for savings, recurring, fixed and current accounts.  Some times the name of the nominee may have to be changed.  Submit form DA-3 to change the name of the nominee.  Form DA-2 is to be submitted to cancel the name of the nominee.  All these forms are available in the banks.  Take a receipt for the applications submitted. Record the details of the nominee with all the other details of the bank.

Joint accounts

If one of the account holders of a joint account is dead, inform the bank about this with proofs.  The bank will allow the other account holder to run the account individually.  He can nominate a person later on.

Fixed deposits

If fixed deposits are there in joint accounts the nominee has to be decided by all the account holders.  Any single account holder cannot decide the nominee.  The nominee will continue till the end of the deposit term.

The nominees also have to take some precautions.  He becomes the rightful heir to the account if the account holder dies.  Consult the banks immediately.  Submit the proofs to the banks.  Then it would be possible to claim the amount in the account.  The nominee is the rightful heir to the amount in the accounts as per the banks.  The legal heirs have no right over the amount in the accounts.

If the nominee does not claim the money with in three months of the death of the account holder, the bank will send a notice to him.  The fixed deposits can also be claimed before the end of the term.  Death certificate is to be submitted along with the application form.  It is not possible to take loans on the fixed deposits by the nominee.

Legal heirs can file a case against the nominee.  But the Banks cannot be made a necessary party.

Accounts of minors

Nominee for a minors account can be named by the guardian of the minor.  If the nominee is a minor another guardian is to be appointed to work for him.  Nominee can claim the amount, if he becomes a major.

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