Covid banking. Banks review settlement processes for deposit accounts of deceased customers in view of Covid-19

Banks are reviewing their processes relating to the settlement of deposit accounts of deceased customers in view of the adverse impact of the Covid-19 pandemic, which as per official figures has claimed about 4.18 lakh lives so far.

They are weighing the possibility of quick settlement of partial deposit amount to provide an immediate relief to family members of the deceased and extending a helping hand in filing insurance claims if the deceased was covered by a life insurance scheme sold through them, among others.

In an advisory, the Indian Banks’ Association emphasised that banks need to sensitise their staff at various levels and particularly at the branch level, to handle death settlement cases sympathetically in the light of the pandemic.

The Association said all possible steps should be taken to mitigate sufferings of survivors of the family of the deceased depositor.

Quick settlement

Through the review, banks are expected to make their processes flexible and smooth by stipulating shorter settlement time. This could accelerate the process of settlement of the deposit accounts of the deceased.

Banks may also consider higher delegation to the branch level managerial staff or the delegation power may be reviewed for enabling quick settlement of a partial/limited amount of, say, up to ₹1 lakh to provide immediate relief to the family members of the deceased in cases where all the required compliances are in place.

In cases where nomination is available and there are no challenges in KYC (know your customer) compliance of the nominee, banks can make the claim format brief and compact. As per the advisory, production of legal representation from nominee may not be insisted upon up to a limit of ₹2 lakh.

Banking expert V Viswanathan underscored that when a nominee is available, there should be no delay in the settlement of the deposit account.

“Only two documents — death certificate of depositor and KYC document of the nominee for identity verification — are needed to credit the amount,” he said.

Further, an evidence of the nominee maintaining an account with a bank — a cancelled cheque leaf or passbook (this is to avoid credit to the wrong account) — to credit the money to his/her account is required.

Minor survivors

In case of the unfortunate death of both the parents or account holder and the nominee, branch managers may make discreet enquiries to ensure genuineness of the claimants/natural guardian. This is aimed at helping the minor survivors.

In the aforementioned case, banks may devise Standard Operating Procedures for extending some immediate help within the legal framework depending on the degree of reliance on the circumstances.

Viswanathan observed that in cases where minors lose their parents, one of the relatives of one of the parents can step in as an administrator and receive the money as guardian for them. Legal heirship certificate will be the only requirement.

If there are other legal heirs to the deceased, they should give a no-objection certificate (NOC) for releasing the money to children, he added.

Insurance claim

While handling cases of settlement of deposit accounts of deceased customers, banks can check whether a customer was covered under any insurance policy facilitated by them so that the family members can be advised suitably and necessary help can be extended in filing of insurance claims.

Banks have facilitated insurance cover under the Pradhan Mantri Swasthya Bima Yojana/ Pradhan Mantri Jeven Jyoti Bima Yojana and also under many schemes launched by the respective State governments and annual premiums in such cases are paid by debiting savings accounts of customers.

Grievance redressal

Appointing grievance redressal officers at Administrative Offices (AOs) and displaying their contact details on website can help in reducing the visits of the claimants to the branches and AOs for knowing the status of their requests, as per the advisory.

Banks can also explore introduction of non face-to-face processes like ‘Video-based Customer Identification Process’ to accommodate claims made by nominees unable to visit the branch.

Further, they can consider putting in place digital applications for processing, monitoring and accelerating the process of settlement. This can help in keeping the claimants informed about the claim status.

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