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After the demise of a loved one in the family, a mountain of sorrow falls on the relatives. In such difficult times, if there is no legal information to withdraw the capital deposited in the bank account of the deceased person, then the family has to face many financial and administrative problems. Generally people think that withdrawing money from the account of a deceased person is a very complicated task and involves rounds of courts, but it is not so at all. Keeping in mind the convenience of common citizens, the Reserve Bank of India (RBI) has set very transparent, simple and time bound guidelines for settlement of bank accounts of deceased depositors. Whether the name of the nominee is registered in the account, the account is joint or the account is opened without any nominee – you can easily get the money by following the correct procedure as per RBI rules.
Do not do this even by mistake: Withdrawal of money from ATM or net banking after death is illegal
In most of the cases, it is seen that after the death of a family member, people immediately withdraw money through their ATM card, UPI or net banking. According to banking and legal experts, doing so can be considered completely illegal and a punishable offense. From the moment of death, the individual’s personal rights over the bank account cease to exist and the account formally becomes the property of the legal heirs. If any one member of the family secretly withdraws money through digital means without the consent of other legal heirs, then in the event of a property dispute in the future, legal action for fraud and embezzlement may be taken against him. The best and safest way is to duly inform the bank about the death of the account holder and make a claim as per the authorized process only.
Case 1: Easy process to get money when nominee is registered in the account
If the deceased account holder had made someone a nominee in his savings account, current account or fixed deposit (FD), then the process of withdrawing money is very easy and fast.
As per RBI rules, the nominee plays only the role of a trustee or custodian in the bank. After the death of the account holder the bank is obliged to hand over the entire deposit amount to the nominee. For this the nominee has to follow the following procedure:
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Get ‘Deceased Claim Form (For Nominee)’ by visiting the concerned bank branch or download it from the official website of the bank.
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Fill the form with the account number, date of death and complete details of the nominee of the deceased account holder.
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Attach a certified copy of the original death certificate of the account holder.
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The nominee will have to submit his/her identity proof (Aadhar Card, PAN Card, Voter ID) and address proof (KYC Documents).
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If the bank demands signatures of two witnesses, then get the signatures of the account holder or reputed persons in the format prescribed by the bank.
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As soon as the documents are submitted, the bank closes the account and transfers the entire amount to the nominee’s account or issues a demand draft (DD) in his name.
Case 2: ‘Leader or Survivor’ rule in case of joint bank account
If the account was in the name of two or more persons and the operation of the account was on ‘Either or Survivor’ or ‘Former or Survivor’ mode, the process becomes even simpler:
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If one of the two account holders passes away, the survivor has the full right to receive the entire balance of the account and continue the account.
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The surviving account holder simply has to visit the bank branch and submit a simple application form and the death certificate of the deceased.
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After this the bank removes the name of the deceased from the account and the account starts operating as a single in the name of the living person. No objection (NOC) from any other heir is not required for this, unless there is a restraining order of a competent court.
Case 3: What to do when there is no nominee in the account (Without Nomination)?
If the deceased account holder had not made anyone a nominee and the account was also single, then in such a situation the deposited amount in the bank account goes to his legal heirs. Any person who falls under the category of Class-1 legal heir (like wife, children, mother etc.) as per Hindu Succession Act, Muslim Personal Law or Indian Succession Act is entitled for it. In this situation RBI has set two different categories:
Simplified Procedure for Small Claims (Simplified Procedure for Threshold Limits): As per RBI instructions, every bank has set a certain limit (e.g. ₹ 50,000 to ₹ 5,00,000, depending on the board of the bank). If the amount deposited in the account is less than this prescribed limit, then the bank makes the payment on the basis of simple documents without visiting the court. For this, a claim form signed by all the legal heirs, an indemnity bond, signatures of two solvent sureties and a letter of disclaimer/NOC from all the other heirs have to be given, in which they agree to give up the claim in favor of one of the members.
Legal documents required in case of large amounts: If the amount deposited in the account exceeds the bank’s prescribed limit and there is no nominee, the bank may ask for legal proof for security reasons:
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Succession Certificate: It is issued by the concerned civil court, which certifies which heir has legal rights over the movable property and bank accounts of the deceased.
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Letter of Administration or Probate (Probate of Will): If the deceased had made a valid Will before his death, its probate can be obtained from the court and submitted to the bank.
Strict instructions from RBI: Bank will have to settle the claim within 15 days of receiving all the documents.
As per RBI Master Circular, if the nominee or legal heirs have submitted all the necessary and valid documents to the bank, it is mandatory for the bank to complete the claim settlement within a maximum of 15 days (15 Days Settlement Rule). Banks cannot unnecessarily harass customers or demand succession certificate without compelling reason, if the claim falls within the internal limits of the bank. If a bank branch is reluctant to settle the claim within 15 days, the customer can lodge a complaint directly with the bank’s nodal officer (Banking Ombudsman) or on the CMS Portal of RBI.
Unclaimed Deposits and ‘UDGAM’ portal of RBI
Many times it happens that family members do not know in which banks the deceased person had accounts or how much money was deposited in them. If there is no transaction in a bank account for 10 years, then the amount is transferred to the ‘Depositor Education and Awareness Fund’ (DEA Fund) of RBI.
To trace such unclaimed accounts and money, RBI has launched a centralized web portal ‘UDGAM’ (Unclaimed Deposits – Gateway to Access information). By registering for free on this portal, citizens can search the information about unclaimed accounts and unclaimed money in various banks across the country by entering the name of the deceased, date of birth, PAN card or Aadhaar number and then go to the concerned bank and claim it.
Complete checklist of documents required for filing claim in the bank
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Claim Application Form filled in the format prescribed by the bank.
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Original death certificate issued by Municipal Corporation, Gram Panchayat or competent authority.
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Original receipt of bank passbook, check book, debit card or fixed deposit (FD) of the deceased.
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Aadhar Card and PAN Card (KYC) of the nominee or legal heirs making the claim.
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In cases without nominee: Legal Heir Certificate, Letter of Indemnity, Affidavit and NOC form of other heirs
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Introduction and signature of two independent persons (witnesses) if required by the Bank