The Hindu Business Line : Trust banks to draw up your will and execute it too

Mumbai, Dec. 5 More and more banks are keen on offering services such as will drafting, execution and trusteeship for management of property of the deceased. These are largely considered the domain of legal practitioners.

For customers, it perhaps makes more sense to entrust their wealth to a bank, which already has experience in handling financial matters. For banks, it is an opportunity to earn fee income and also cross sell other investment products.

Latest entrant

Some banks such as Canara Bank and Bank of Maharashtra have been offering the service for quite some years now and the latest entrant in this segment is Centurion Bank of Punjab (CBoP). CBoP offers this service through its joint venture, Centurion Executorship, Trusteeship, Real Estate Management and Advisory Services Pvt Limited (CERMA) and Bank of Maharashtra through its fully-owned subsidiary, Maharashtra Executor and Trustee Company (METCO).

While CBoP caters to customers with a net worth of $1 million, Canara Bank and Bank of Maharashtra offer this service to everyone. The services include advising, drafting and safe keeping of wills, preparation of trust deeds, registering trusts and taking care of other trust related formalities, executorship services; real estate advisory and escrow and custodial services.

Charges for drafting range from Rs 3,000-Rs 5,000. For execution and management of trusts, banks charge about 1-2 per cent of the value of the assets as fees.

Low awareness

Senior bank officials said there is low awareness about this service. According to Ms Madhuri Kulkarni, Chief Executive Officer, METCO, “People need to be educated about such services. We are trying to increase awareness through NGOs like Rotary Club.”

A senior official of Canara Bank said, “Anyone who wants to make a will can approach the bank and appoint it as the co-executor for execution of the will, along with a family member.”

In case of CBoP, the law firm, S. N. Gupta & Co, its partner in the joint venture, takes care of any legal disputes arising out of property dispute or over execution of the will. In case of Canara Bank, the bank’s legal department handles the cases. The bank also has empanelled legal practitioners across the country whose services are availed as and when necessary.

New trends

“Will writing culture is not prevalent in India. But we have noticed trends like people wanting to set up trusts to manage money for religious or charitable activities after they die. Most people who avail this service belong to middle class or upper middle class,” the official from Canara Bank said.

Mr Harpreet Singh, business director, wealth management, distribution and loans, CBoP, also agreed that the increase in wealth has led to more money going for philanthropic services. Going ahead, the demand for such niche services will increase, he added.

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