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DEPOSIT POLICY 2017-18

PREAMBLE :

One of the important functions of the Bank is to accept deposits from the public for the purpose of lending. In fact, depositors are the major stakeholders of the Banking System. The depositors and their interests form the key area of the regulatory framework for banking in India and this has been enshrined in the Banking Regulation Act, 1949. The Reserve Bank of India is empowered to issue directives / advices on interest rates on deposits and other aspects regarding conduct of deposit accounts from time to time. With liberalization in the financial system and deregulation of interest rates, banks are now free to formulate deposit products within the broad guidelines issued by RBI.

This policy document on deposits outlines the guiding principles in respect of formulation of various deposit products offered by the Bank and terms and conditions governing the conduct of the account. The document recognizes the rights of depositors and aims at dissemination of information with regard to various aspects of acceptance of deposits from the members of the public, conduct and operations of various deposit accounts, payment of interest on various deposit accounts, closure of deposit accounts, method of disposal of deposits of deceased depositors, etc., for the benefit of customers. It is expected that this document will impart greater transparency in dealing with the individual customers and create awareness among customers of their rights. The ultimate objective is that the customer will get services they are rightfully entitled to receive without demand.

While adopting this policy, the bank reiterates its commitments to individual customers outlined in Bankers’ Fair Practice Code of Indian Banks’ Association. This document is a broad framework under which the rights of common depositors are recognized.

1.1 KNOW YOUR CUSTOMER (KYC) POLICIES/ GUIDELINES:

Know Your Customer (KYC) is the platform on which banking system operates to avoid the pitfalls of operational, legal and reputation risks and consequential losses by scrupulously adhering to the various procedures laid down for opening and monitoring of accounts. The Bank shall follow appropriate Know Your Customer Policies/ guidelines, procedures and internal control mechanism designed to:

  • Establish and document the true identity and address of the customers who maintain/establish relationships, open accounts or conduct business transactions.
  • Obtain background information on existing and/or new customers.
  • Safeguard the Bank from the risks of doing business with any individual or entity whose identity cannot be determined.
  • Protect the Bank from the risks of having business relationship with any individual or entity who refuses to provide information, or who has provided information that contains significant inconsistencies which cannot be resolved after due verification.
  • 1.2 IDENTIFICATION THROUGH DOCUMENTS PROVIDED BY THE CUSTOMER:

    The Bank shall establish customers’ identity (true name, residential and mailing address) with the help of certain Officially Valid Documents (OVDs) as may be provided by the customer concerned in original.

    A.Officially Valid Documents (OVDs):Government of India has made amendment to the “Prevention of Money-Laundering (Maintenance of Records) Rules, 2005” and has published the same in the extraordinary official gazette Notification No. 439 dated June 01, 2017. In terms of the notification, “Officially valid document” means:-

  • The Passport,
  • The Driving License,
  • The Voter’s Identity Card issued by Election Commission of India,
  • Job Card issued by NREGA duly signed by an officer of the State Government,
  • The letter issued by the National Population Register containing details of name, address
  • Any other document as notified by the Central Government in consultation with the Regulator
  • Provided that where ‘simplified measures’ are applied for verifying the identity of the customers, i.e., for Low Risk Customers, where a prospective customer is unable to produce any proof of identity as mentioned above, the following documents shall be deemed to be OVD :

  • Identity card with applicant’s photograph issued by Central/ State Government Departments, Statutory/ Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, and Public Financial Institutions;

  • Letter issued by a Gazetted officer, with a duly attested photograph of the person.
  • Provided further that where “simplified measures” are applied for verifying the limited purpose of proof of address of the customers, i.e., for Low Risk Customers, where a prospective customer is unable to produce any proof of address, the following documents shall be deemed to be “Officially Valid Documents”:

  • Utility bill, which is not more than two months old, of any service provider (electricity, telephone, post-paid mobile phone, piped gas, water bill);
  • Property or Municipal Tax receipt;
  • Bank account or Post Office savings bank account statement;
  • Pension or family Pension Payment Orders (PPOs) issued to retired employees by Government Departments or Public Sector Undertakings, if they contain the address;
  • Letter of allotment of accommodation from employer issued by State or Central Government departments, statutory or regulatory bodies, public sector undertakings, scheduled commercial banks, financial institutions and listed companies. Similarly, lease and license agreements with such employers allotting official accommodation; and
  • Documents issued by Government departments of foreign jurisdictions or letter issued by Foreign Embassy or Mission in India
  • B. AADHAAR & PAN Mandatory documents:
    The Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017, also incorporates the following-

    Any individual who is eligible to be enrolled for an Aadhaar number, would be required to submit the following documents to the bank at the time of establishment of account based relationship-

  • Aadhaar number issued by the Unique Identification Authority of India; and
  • The Permanent Account Number (PAN) or Form No.60 as defined in Income Tax Rules, 1962
  • Where an Aadhaar number has not been assigned to a customer, he/she would be required to furnish proof of application of enrolment for Aadhaar and in case the PAN is not submitted, one certified copy of an “OVD” shall be required to be submitted along with Form 60.

    If the customer is not eligible to be enrolled for an Aadhaar number, he shall submit PAN or Form No. 60 as defined in the IT Rules, 1962. But if PAN is not submitted, the customer shall submit one certified copy of an “OVD” containing details of his identity and address, one recent photograph..

    Branches, at the time of receipt of the Aadhaar number under provisions of this rule, shall carry out authentication using e-KYC authentication facility provided by UIDAI.

    In case if customers is NRI or is a resident in the States of Jammu and Kashmir, Assam or Meghalaya and does not submit the PAN, he would be required to submit one certified copy of OVD containing details of his identity and address and one recent photograph along with Form 60.

    In case the identity information relating to the Aadhaar number or PAN submitted by the customer doesn’t have current address of the customer, he/she shall be required to submit an OVD to the Bank.

    2. TYPES OF DEPOSIT ACCOUNTS:

    While various deposit products offered by the Bank are assigned different names. The deposit products can be categorised broadly into the following types. Definition of major deposits schemes is as under: -


  • “Demand deposits” means a deposit received by the Bank which is withdrawable on demand;
  • “Savings deposits” means a form of demand deposit which is subject to restrictions as to the number of withdrawals as also the amounts of withdrawals permitted by the Bank during any specified period;
  • “Term deposit” means a deposit received by the Bank for a fixed period withdrawable only after the expiry of the fixed period and includes deposits such as Recurring / Double Benefit Deposits/Fixed Deposits /Monthly Income deposit / Quarterly Income deposit etc.
  • “Notice Deposit” means term deposit for specific period but withdrawable on giving at least one complete banking day’s notice;
  • “Current Account” means a form of demand deposit wherefrom withdrawals are allowed any number of times depending upon the balance in the account or up to a particular agreed amount and will also include other deposit accounts which are neither Savings Deposit nor Term Deposit;
  • 2.1 ACCOUNT OPENING AND OPERATION OF DEPOSIT ACCOUNTS:

  • The Bank before opening any deposit account will carry out due diligence as a ‘customer identification’ measure, as required under “Know Your Customer” (KYC) guidelines issued by RBI under Prevention of Money Laundering Act 2002 rules & regulations and Prevention of Money Laundering (Maintenance of Records) Rules 2005 and subsequent amendments from time to time. If the decision to open an account of a prospective depositor requires clearance at a higher level, reasons for any delay in opening of the account will be informed to him and the final decision of the Bank will be conveyed at the earliest to him.
  • The account opening forms and other materials would be provided to the prospective depositor by the Bank. The same will contain details of information to be furnished and documents to be produced for verification and/ or for records. It is expected from the bank official opening the account, to explain the procedural formalities and provide necessary clarification sought by the prospective customer. Documents and other information should be collected in respect of different categories of customers depending on perceived risk and keeping in mind the requirements of PML Act, 2002 and instructions/guidelines issued from time to time. Account should not be opened where it is not possible to apply appropriate customer due diligence measures i.e. unable to verify the identity and /or obtain required documents due to non cooperation of the customer or non reliability of the data/information furnished to the bank.
  • For Deposit products like Savings Bank Account and Current Deposit Account, the bank will normally stipulate certain minimum balances to be maintained as part of terms and conditions governing operation of such accounts. Failure to maintain minimum balance in the account may attract levy of charges as specified by the bank from time to time. For Saving Bank Account the bank may also place restrictions on number of transactions, cash withdrawals, etc., for given period. Similarly, the bank may specify charges for issue of cheque books, additional statement of accounts, duplicate passbook, folio charges, etc. All such details, regarding terms and conditions for operation of the account and schedule of charges for various services provided will be communicated by way of notice displayed prominently on Bank’s notice board/on Bank’s web site to the prospective depositor while opening the account.
  • Savings Bank Accounts can be opened for eligible person/persons and certain organizations/agencies (as advised by Reserve Bank of India from time to time)
  • Current Accounts can be opened by individuals / partnership firms / Private and Public Limited Companies / HUFs / Specified Associates / Societies / Trusts.
    Departments of Authority created by Government (Central or State) Limited Liability Partnership, etc.
  • Term Deposits Accounts can be opened by individuals / partnership firms / Private and Public Limited Companies / HUFs/ Specified Associates / Societies / Trusts, Departments of Authority created by Government (Central or State), Limited Liability Partnership, etc.
  • Branches should periodically update customer identification data (including photograph/s) after the account is opened. In the light of practical difficulties/ constraints in obtaining/ submitting fresh KYC documents at frequent intervals, as the relative documents submitted earlier specially by low-risk customers have remained unchanged in most of the accounts, the undernoted guidelines should be followed :
    • Branches/offices would need to continue to carry out on-going due diligence measures while commencing an account-based relationship. Such measures include (a)identifying and verifying the customer and beneficial owner on the basis of reliable and independent information and data or document; and(b) ensuring that their transactions are consistent with the bank’s knowledge of the client, his business and risk profile and, wherever necessary, the source of funds.
    • Full KYC exercise will be required to be done at least every two years for high risk, every eight years for medium risk and at least every ten years for low risk customers. The time limits prescribed for such periodical updation would apply from the date of opening the account / last verification of KYC.
    • Full KYC may include all measures for confirming identity and address and other particulars of the customer that the bank may consider reasonable and necessary based on the risk profile of the customer.
    • Fresh photographs will be required to be obtained from minor customer on becoming major.
    • Further, the requirement of applying client due diligence measures to existing clients at an interval of two/eight/ten years in respect of high/medium/low risk clients respectively, would also continue taking into account whether and when client due diligence measures have previously been undertaken and the adequacy of data obtained.
    • In order to further ease the difficulties in complying with the KYC requirements, within the overall framework of the Prevention of Money Laundering Act, 2002 (PMLA) and Rules (PMLR), it is clarified as under :-
      • Banks need not seek fresh proofs of identity and address at the time of periodic updation, from those customers who are categorized as ‘low risk’, in case of no change in status with respect to their identities and addresses. A self-certification by the customer to that effect should suffice in such cases. In case of change of address of such ‘low risk’ customers, they could merely forward a certified copy of the document (proof of address) by mail/ post, etc. Banks should not insist on physical presence of such low risk customer at the time of periodic updation.
      • If an existing KYC compliant customer of a bank desires to open another account in the same bank, there should be no need for submission of fresh proof of identity and/or proof of address for the purpose.
  • Freezing and closure of accounts
  • 1. Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017 published vide extraordinary official gazette Notification No. 439 dated June 01, 2017.

  • For all the customers who are eligible to be enrolled for Aadhaar and for obtaining a PAN do not submit the same, would be required to submit it within 6 (six) months from the date of opening of the account.
    In case the customer fails to submit the Aadhaar number and PAN within the aforesaid six months period, the said account shall cease to be operational till the time the Aadhaar and PAN is submitted.
  • Customers having account based relationship prior to 1st June, 2017, would be required to submit Aadhaar and PAN within 31st December, 2017.
    In case of existing customer having an account prior to 1st June, 2017, fails to submit the Aadhaar number and PAN by 31st December, 2017, the said account shall cease to be operational till the time the Aadhaar and PAN are submitted.
  • 2. In case of non-compliance of KYC requirements by the customers despite repeated reminders by the banks, RBI has advised that banks may impose ‘partial freezing’ on such KYC non-compliant in a phased manner.

    3. During the course of such partial freezing, the account holders can revive their accounts by submitting the KYC documents as per instructions in force. Accordingly, in terms of the directions received from RBI, it is advised as under:–

  • While imposing ‘partial freezing’, branches/offices should ensure that the option of ‘partial freezing’ is exercised after giving due notice of three months initially to the customers to comply with KYC requirement and followed by a reminder for further period of three months.
  • Thereafter, branches/offices may impose ‘partial freezing’ by allowing all credits and disallowing all debits with the freedom to close the accounts.
  • If the accounts are still KYC non-compliant after six months of imposing initial ‘partial freezing’, branches/offices may disallow all debits and credits from/to the accounts, rendering them inoperative.
  • Further, it is open to the bank to close the account of such customers after issuing due notice to the customer explaining the reasons for taking such a decision. Such decisions of closure of account, however, need to be taken at a reasonably senior level, i.e. at Zonal Manager Level.
  • 4. In the circumstances when the branch believes that it would no longer be satisfied about the true identity of the account holder, the branch should file a Suspicious Transaction Report (STR) with Financial Intelligence Unit – India (FIU-IND) under Department of Revenue, Ministry of Finance, Government of India through their respective Zonal Offices stating the details of the status of the account and specific reasons for filing of STR.


  • In addition to the due diligence requirements, under KYC norms the Bank is required by law to obtain Permanent Account Number (PAN) or alternatively declaration in Form No. 60 or 61 as specified under the Income Tax Act / Rules.
  • Deposit accounts can be opened by an individual in his own name (status: known as account in single name) or by more than one individual in their own names (status: known as Joint Account). Savings Bank Account can also be opened by a minor jointly with natural guardian or with mother as the guardian (Status: known as Minor’s Account). Minors above the age of 10 will also be allowed to open and operate saving bank account independently. However, no overdrafts will be granted to these minors. SB account can also be opened by a minor represented by guardian or jointly with a major, where minor is represented by natural guardian. Minors above the age of 10 will also be allowed to open and operate SB account subject to prevailing guidelines of the Bank.
  • Operation of Joint Account – The Joint Account opened by more than one individual can be operated by single individual or by more than one individual jointly. The mandate for operating the account can be modified with the consent of all account holders. The Savings Bank Account opened by minor jointly with natural guardian /legal guardian can be operated by such natural guardian/ legal guardian only till attainment of majority.
  • The joint account holders can give any of the following mandates for the disposal of balance in the above accounts:
    • Either or Survivor: If the account is held by two individuals say, A & B, on maturity, the final balance along with interest, if applicable, will be paid to any of the survivors . If one of the depositors expires before maturity, no pre-payment of the fixed/term deposit may be allowed without the concurrence of the legal heirs of the deceased joint holder.
    • Anyone or Survivor/s : If the account is held by more than two individuals say, A, B and C, the final balance along with interest, if applicable, will be paid to any of the survivors on death of any two account holders.
    • Former or Survivor/s: If the account is held by two individuals A & B, the former alone can operate/ withdraw the matured amount of the fixed/term deposit, when both the depositors are alive. If the former expires before the maturity of the fixed/term deposit, the SurvIvor can withdraw the deposit on maturity. Premature withdrawal would however require the consent of both the parties, when both of them are alive, and that of the surviving depositor and the legal heirs of the deceased in case of death of one of the depositors.
  • At the request of the depositor, the Bank will register mandate / power of attorney given by him authorizing another person to operate the account on his behalf.
  • The term deposit account holders at the time of placing their deposits can give instructions with regard to closure of deposit account or renewal of deposit for further period on the date of maturity. In case of absence of any instructions deposits will be treated as an auto renewal deposit and should be renewed for a similar period as per the tenure of the existing deposit.
  • A statement of account will be provided by the Bank to Savings Bank as well as Current Deposit Account Holders periodically as per terms and conditions of opening of the account. Alternatively, the Bank may issue a Pass Book to Savings Bank account holders.
    Bank provides password encrypted monthly statement of account in PDF format to all depositors, who have registered their e- mail id with the Bank.

    Account portability facility is available. The customer is allowed to transfer his account from one branch to another branch without restrictions as long as full KYC has been done. Branches may transfer existing accounts at the transferor branch to the transferee branch without insisting on fresh proof of address and on the basis of a self-declaration from the account holder about his/her current address. The account number remains unchanged pan India for any number of transfers requested by customer.
  • Inability of an existing customer to furnish details required by the Bank to fulfill statutory obligations could also result in closure of account after due notice(s) is provided to the customer.
  • Levying of penal charges on non-maintenance of minimum balances in Inoperative A/Cs has been discontinued.
  • Individuals resident in India may be permitted to include non-resident close relative (s) (relatives as defined in Section 6 of the Companies Act, 1956) as a joint holder (s) in their resident bank accounts on “Former or survivor” basis. However, such non-resident Indian close relatives shall not be eligible to operate the account during the life time of the resident account holder.
  • All Beneficial Owners shall be subjected to KYC. Consequent upon Government of India Notification on “Prevention of Money-Laundering (Maintenance of Records) Amendment Rules, 2013” (Rules), published in the extraordinary official gazette vide G.S.R. No. 576 (E) dated August 27, 2013, and subsequent RBI circular dated 17.07.2014, the amended procedure for Identification of Beneficial Owners is appended for strict adherence to the field functionaries.
    • Where the client is a company, the beneficial owner is the natural person(s), who, whether acting alone or together, or through one or more juridical person, has a controlling ownership interest or who exercises control through other means.
      Explanation.- For the purpose of this sub-clause :
      • "Controlling ownership interest" means ownership of or entitlement to more than twenty-five percent of shares or capital or profits of the company.
      • "Control" shall include the right to appoint majority of the directors or to control the management or policy decisions including by virtue of their shareholding or management rights or shareholders agreements or voting agreements.
    • Where the client is a partnership firm, the beneficial owner is the natural person(s), who, whether acting alone or together, or through one or more juridical person, has ownership of/ entitlement to majority more than fifteen percent of capital or profits of the partnership.
    • Where the client is an unincorporated association or body of individuals, the beneficial owner is the natural person(s), who, whether acting alone or together, or through one or more juridical person, has ownership of or entitlement to more than fifteen percent of the property or capital or profits of such association or body of individuals.
    • Where no natural person is identified under (i) or (ii) or (iii) above, the beneficial owner is the relevant natural person who holds the position of senior managing official.
    • Where the client is a trust, the identification of beneficial owner(s) shall include identification of the author of the trust, the trustee, the beneficiaries with fifteen percent or more interest in the trust and any other natural person exercising ultimate effective control over the trust through a chain of control or ownership.
    • Where the client or the owner of the controlling interest is a company listed on a stock exchange, or is a subsidiary of such a company, it is not necessary to identify and verify the identity of any shareholder or beneficial owner of such companies.
  • e-KYC service of UIDAI shall be accepted as a valid process for KYC verification under the PML Rules.
  • Cash withdrawal at Non-base branches is permitted up to Rs 50,000/- only. The cash payment will be made to account holder only, on production of his identity proof, and not to any third party.
  • With the objective to provide more caring, convenient and attractive services to the customers and as part of the Bank’s continuous efforts to improve its existing services, Bank has introduced online donation facility to customers. Online donation facility is available through internet banking channel (URL:https://allbankonline.in). This facility is available to our Bank’s customers.
  • Customers who have registered their mobile numbers with the Bank can avail missed call services by dialing 092-24-150-150. The present balance in the account with last five transactions will be sent to such customers on dialing this number.
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