The death of a closed relative or loved ones is a time of great suffering for the family members, however, it is also the time when a lot of unresolved legal and financial issues have to be dealt with. One of the chief concerns of those involved is that what happens to the money deposited in the bank of the deceased through various means like cheque or other means. In this article we will see can we deposit a check into a deceased person’s account.
Current Legal Provisions
According to the current provisions, the Reserve Bank of India is the chief authority on deciding the modalities of how the bank functions. To ensure that the people close to the deceased are not subjected to undue difficulties and hardships the RBI has formulated certain guidelines for the banks which need to follow in case of the death of an account holder. The banks are then supposed to enact certain regulations on the basis of these guidelines.
The RBI Master circular dated July 1, 2014, is the latest guidelines according to which the accounts of the deceased are dealt with. Under this master circular section 6.5 deals with the flow of money to the deceased’s account.
The circular says that the bank, in order to avoid unnecessary trouble to the survivors, should get approval and inform the survivors or the nominees about how the issue of the flow of funds to the deceased account will be dealt with. There are two modalities which can be taken into consideration for the settlement of these flows. The first deals with the issue by the creation of another account in name of the deceased in the form of “ The Estate of Shri (name of the deceased)”. In this way, all the funds and flows in the name of the deceased will go to the estate account, however, in this method no intermittent withdrawals can be made by the survivors. This means that after the estate has received certainly expected credits the nominee can ask the bank to close the said estate and transfer the credits to an appropriate beneficiary. In the second method, whenever a payment is made in the name of the deceased the remitter will be intimated that the account holder is deceased and the survivors will be informed accordingly about the payment attempted by the remitter. The survivors can then approach the remitter regarding the payment which can be further made by other means.
In order to claim the account, however, there are multiple cases that can happen. In case the deceased had already appointed a nominee, the nominee just has to show the original copy of the death certificate and two witnesses to attest that the dues were passed on to the nominee by the bank. In case the deceased has a joint account with either or survivor then in such a case, the copy of application along with the photocopy of the death certificate needs to provide. In case of absence of both of the above, the dues pass on to the legal heir after the legal heir produces a copy of the will or succession certificate. In case there is no claimant to the deceased’s account the bank converts the account to a dormant one unless there is a claim and in such case, the bank transfers the proceeds to the claimant. The above-mentioned rules are specified in section 6.1 to 6.4 of the RBI master circular.
It should be kept in mind these are basic skeleton guidelines issued by the RBI and the banks have considerable leeway to specify the finer details according to their own policies.
Thus, from the above discussion, we can see that a person can indeed deposit a cheque into a deceased person’s account. This is, however, only possible in the cases where the survivor has opted for the creation of estate in the name of the deceased and not where the remitter is informed that the account holder is no longer alive. Therefore, though possible, it is not really prudent to transfer a cheque into a deceased person’s account for it would be not really useful for the survivor to claim the said amount, for it is not possible for the survivors or the nominee to claim amount form the estate intermittently.
This article is authored by Eashaan Agrawal, First-Year, B.A. LL.B (Hons.) student at National Law University, Delhi
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