The Reserve Bank of India has clarified that in the case of term deposits with “either or survivor” or “former or survivor” mandate, banks are permitted to allow premature withdrawal of the deposits by the surviving joint depositor on the death of the other, only if, there is a joint mandate from the joint depositors to this effect.

It has been stated that most of the banks have neither incorporated such a clause in the account opening form nor have they taken adequate measures to make the customers aware of the facility of such mandate, thereby putting the “surviving“ deposit account holders to unnecessary inconvenience.

“Banks are, therefore, advised to invariably incorporate the aforesaid clause in the account opening form and also inform their existing as well as future term deposit holders about the availability of such an option.”

It had further stated that the joint deposit holders might be permitted to give the mandate either at the time of placing fixed deposit or anytime subsequently during the term/tenure of the deposit.

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