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Center for Learning and Innovation (CLI)

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 DISCLAIMER
Though every effort has been made to incorporate the

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latest guidelines for updating of the contents for ready
reference of users, this chapter is not a substitute for
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Bank‘s Circulars/ guidelines and regulatory directives/
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advisories. Any suggestion for rectification of any

inadvertent error or improvement of the contents is
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welcome and may be emailed to [email protected].

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 CONTENTS

S.No. PARTICULARS PageNo.

1. Banking Regulation Act 4
2. Reserve Bank of India Act 6
3. Negotiable Instrument Act 9
4. Banker Customer Relationship 19
5. Garnishee & Income Tax Attachment Order 22
6. Different Types of Customers 27
7. KYC POLICY 44
8. Banking Ombudsman Scheme, 54
9. Internal Ombudsman Directions 2003 55
10. Consumer Protection Act 55
11. Right to Information Act 57
12. Customer Service and Complaints 61

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13. General Instructions in Deposit Accounts/ Routine Banking 84
14. Nomination and Claim cases 116
15. Cheque Collection Policy 122
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16.
17.
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Customer Compensation Policy
IBA’s code for banking practice, our bank’s deposit policy &
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135
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RBI directives
18. Cash Management 148
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19. Detecting and Impounding of Counterfeit Currency Notes 153

20. RBI Note Refund Rules, 2009 155
21. Miscellaneous issues – Drafts, Security Forms& 164
Stationery Management; Safe Deposit Vault (Lockers);
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Articles in Safe Custody; Passing& Signing Powers etc

22 DOCUMENT MANAGEMENT SYSTEM (DMS) 185
23 INTRODUCTION OF NEW CUSTOMER CARE TOLL FREE NUMBERS 185
24 NON-INDIVIDUAL - SAVING ACCOUNT OPENING THROUGH 186
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DOCUMENT MANAGEMENT SYSTEM (DMS)

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 BANKING REGULATION ACT, 1949

The Banking Regulation Act, 1949 (enacted w.e.f.10.03.1949) is a legislation,

extended to whole of India, that regulates all banking companies in India. Initially, the
law was applicable only to banking companies. But, in 1965 it was amended to make it
applicable to cooperative banks and to introduce other changes.
The Act provides a framework using which commercial banking in India is supervised
and regulated. The Act supplements the Companies Act, 1956.
Primary Agricultural Credit Society and cooperative land mortgage banks &non
Agriculture primary credit societies are excluded from the Act.

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The Act gives the Reserve Bank of India (RBI) the powers to give license to
banks, have regulations over shareholding and voting rights of shareholders; supervise
the appointment of the boards and management; regulate the operations of banks; lay
down instructions for audits; control moratorium, mergers and liquidation; issue
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directives in the interests of public good and on banking policy, and impose penalties.
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In 1965, the Act was amended to include cooperative banks under its purview by adding
the Section 56. Cooperative banks, which operate only in one state, are formed and run
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by the state government. But, RBI controls the licensing and regulates the business
operations. The Banking Act was a supplement to the previous acts related to banking.
Some of the important provisions of the act are as under:-
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Section 5: Contains definition of Banking, “Banking means accepting for the purpose of
lending or investment, of deposits of money from the public, repayable on demand or
otherwise, and withdrawal by cheque, draft, order or otherwise.”
Section 6: Describes the forms of business in which a banking company may engage in
addition to the banking business.
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Section 8: restricts / prohibits business like trading for goods etc.

Section 9: Holding of Immovable Property (other than for own Use): Not exceeding 7
years, can be extended for 5 years
Section 11: Requirement as to minimum paid up Capital and Reserves
Domestic Banks Min. – Rs. 5 lac
Foreign Banks Min. – Rs. 15 lac (Rs. 20 lac for business in Mumbai or Kolkata)
Section 12: Ratio of Authorised capital, subscribed capital and paid up capital should be
minimum 4:2:1
Section 17 (1): Reserve Fund: Stipulates that a bank must create reserve fund
equivalent to not less than 20% of profits out of the balance of profit of each year before
any dividend is declared.(RBI has enhanced it to 25% of net profit w.e.f.31 st March 2001)

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Section 19(2): No banking company shall hold shares in any company, whether as
pledge, mortgagee or absolute owners of an amount exceeding 30% of its own paid up
share capital + reserves or 30% of the paid up share capital of that company whichever
is less.
Section 20: Banks cannot grant loan against security of their own shares.
Section 21: Empowers RBI to issue directives to banks to determine policy for Advances.
Section 21A:Rate of interest charged by banks shall not be reopened by any court on the
ground that the rate of interest charged by banks is excessive.
Section 22: Empowers RBI to issue license for opening a bank.
Section 23: Empowers RBI to grant license for opening of branches.
Section 24: Statutory Liquidity Ratio- Every bank has to maintain liquid assets in form
of cash, gold & unencumbered approved securities at the close of any business which is
minimum of certain percentage (Presently 18%)of its total Netdemand and time

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liabilities in India as on last Friday of the second preceding fortnight.
Section 26A: Return of unclaimed deposits (10 years and above) within 30 days of close
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of each calendar year.The RBI has launched ‘The Depositor Education and Awareness
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Fund Scheme 2014(DEAF)’ under which the amount to the credit of any a/c in India with
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any bank which has not been operated upon for a period of ten years or any deposit or
any amount remaining unclaimed for more than 10 Years,shall be credited to the
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fund,within a period of three months from the expiry of the period of ten years.
Section 35: RBI authorized to undertake inspection of Banks and give directions.
Section 45 (Y): Preservation of Bank Record - Central Govt. In consultation with RBI has
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power to frame rule regarding preservation of books,a/cs and other documents.

Section 45 Z: Return, the paid instruments, to a customer by keeping a true copy.
Section 45(ZA): Nomination in Deposit accounts.
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Section 45(ZC): Nomination in Safe Custody accounts.

Section 45(ZE): Nomination in Locker accounts.

(Total 56 Sections as on date)

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 RESERVE BANK OF INDIA ACT 1934

RESERVE BANK OF INDIA

▪ Established on 1st April, 1935, under RBI Act, 1934 on the recommendations of John
Hilton Young Commission (known as Royal Commission on Indian Currency &
Finance)
▪ Nationalized on Jan. 1, 1949. Paid up capital – Rs. 5 crore
▪ Management – Managed by a Central Board of Directors – (One Governor, 4 Dy.
Governors & 15 other Directors) and 4 Local Boards (at Mumbai, Chennai, Kolkatta&
New Delhi)
▪ 1st Governor – Mr. O Smith, 1st Indian Governor – Dr. C Desmukh,
▪ Present Governor – Mr. Shaktikanta Das
Functions of RBI:

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A) Issuance of Currency (Section 22 of RBI Act)
Sole authority to issue currency notes of various denominations under signatures of
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Governor (except One rupee note, which is issued by Central Govt. under Signature of
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Finance Secretary).
B) Banker to the Government
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RBI transacts Govt. business & manages debt U/s 20 of RBI Act (for Central Govt. & U/s
21-A (for State Govt.), advises Govt. on monetary policy matters, provides ways and
means advance (U/s 17(5) of RBI Act) to Govt. (Central / State) for meeting temporary
mismatch / shortfall in revenue.
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C) Banker’s Bank
Acts as a banker to the Scheduled banks and the lender of the last resort by providing
financial assistance by way of refinance / rediscounting (Sec 17 (2) & (3) and Liquidity
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Adjustment Facility (injection of liquidity through repo auctions & absorption of liquidity
through reverse repo auctions).
D) Controller of Credit:
Grants licence to carry out Banking business, issues directions & carries out inspection.
E)Controller of Credit
U/s 21 & 35A of Banking Regulations Act, RBI can fix interest rates (including Bank
rate)and also exercises selective credit controls in order to control inflation and money
supply forensuring growth of economy and price stability.
F) Collection of information on Loan Accounts
G) Managing Payment Systems: MICR, ECS, RTGS, NEFT etc.
H) Maintenance of value of Indian currency

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RBI maintains and regulates foreign exchange transactions under the Foreign Exchange
Management Act (FEMA).
I) Supervision of Financial System
Board for Financial Supervision (BFS) has been set up u/s 58 of RBI Act on 16.11.1994,
with Governor, RBI as its ex-officio Chairman. Its functions include empanelment and
selection of statutory auditors and exercise of integrated supervision over commercial
banks. Financial Institutions & NBFCs and other para-banking financial institutions
through onsite inspection & off-site supervision through DSB Returns
The Section 7- empowers the Central Government under which it may from time to time
give such directions to the Bank as it may, after consultation with the Governor of the
Bank, consider necessary in the public interest.
The Section 18- deals with emergency loans to banks.
The Section 19- describes business which RBI may not transact.

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The Section 20- empowers RBI as Banker to the govt. It transacts govt. Business and
manages public debt of the central govt.
The Section 21- states that RBI has the right to transact Govt. Business in India.
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The Section 22- says that only RBI has the exclusive rights to issue currency notes in
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India.
The Section 24- states that the maximum denomination a note can be ₹10,000.
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The Section 26- Bank notes issued by RBI shall be legal tender and shall be guaranteed
by Central Govt.
The Section 28- allows the RBI to form rules regarding the exchange.
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The Section 29- says that Bank note shall be exempted from stamp duty under Indian
Stamp Act.
The Section 31- Prohibits issue of notes payable to bearer. No person in India otherthan
RBI or the central government can issue and accept promissorynotes that are payable to
bearer on demand.However, cheque, that are payable on demand, can be issued by
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anyone.
The Section 33- states that the Assets of Issue department of RBI shall consists of gold
coins, gold bullion and foreign securities not any time less than Rs.200.00 crore of
which gold coin and gold bullion not less than 115 crore.
The Section 42- Cash Reserve Ratio of scheduled banks to be kept with RBI as a daily
balance. The amount of the deposit shall be more that a 4.00% of its net time and
demand liabilities in India (CRR).
The Section 45-A to F empowers RBI to collect credit information.
The Section 48 exempts RBI from paying income tax.
The Section 49 empowers RBI to announce/ publish Bank rate ( the standard rate at
which RBU is ready to buy or rediscount bills of exchange or other commercial papers
eligible for purpose under this Act.

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CRR & SLR AT A GLANCE

CRR SLR
Statutory basis Sec. 42 (1) of RBI Sec. 24 (2A) of Banking
Act, 1934 Regulation Act, 1949
Minimum and maximum RBI Discretion Minimum :RBI discretion
Maximum :40%
Rate 4.50% 18%
How maintained Cash balance with RBI Cash in hand, Gold/
investment in approved Govt.
Securities/net Bank balance
with scheduled commercial
banks.

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Basis for computation %age of NDTL on %age its total Netdemand
fortnightly average and time liabilities in Indiaas
basis. (Min. 80% of on last Friday of the second
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average balance to be
21 preceding fortnight
maintained on daily
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basis till 20.06.20)

Interest No interest payable According to class of
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w.e.f. Securitiesin which investment

31.3.2007 is made
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Penal interest for default

– 1st day 3% p.a. above bank rate 3% p.a. above bank rate
Next day 5% p.a. above bank rate 5% p.a. above bank rate
Return to RBI Form A (fortnightly) Form VIII (by 20thevery
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month)

RATES AT A GLANCE

Repo Rate 6.50%

Standing deposit facilty rate 6.25%
Reverse Repo Rate 3.35 %
Marginal Standing Facility Rate 6.75%
Bank Rate 6.75%
CRR 4.50%
SLR 18%

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NEGOTIABLE INSTRUMENTS ACT 1881
Came into force w.e.f. March 01, 1882
It has 148 sections and 17 chapters
Section 138 to 142 were added in 1988 (came into effect from 1.4.1989). Section 143 to
147 were added in Dec. 2002
This Act is applicable to entire India.
Some of the important definitions of the Act are:
Section 4 - Promissory note: A "promissory note" is an instrument in writing (not being
a bank-note or a currency-note) containing an unconditional undertaking, signed by the
maker, to pay a certain sum of money only to, or to the order of, a certain person, or to
the bearer of the instrument.
Section 5 - Bill of exchange: A "bill of exchange" is an instrument in writing containing
an unconditional order, signed by the maker, directing a certain person to pay a certain
sum of money only to, or to the order of, a certain person or to the bearer of the

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instrument.
Section 6 - Cheque: A cheque is bill of exchange drawn on a specified banker and not
expressed to be payable otherwise than on demand and it includes the electronic image
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of a truncated cheque and a cheque in the electronic form.
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Explanation: I. - For the purposes of this section, the expressions-

(a) a cheque in the electronic form means a cheque which contains the exact mirror
image of a paper cheque, and is generated, written and signed in a secure system
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ensuring the minimum safety standards with the use of digital signature (with or without
biometrics signature) and asymmetric crypto system;
(b) a truncated cheque means a cheque which is truncated during the course of a
clearing cycle, either by the clearing house or by the bank whether paying or receiving
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payment, immediately on generation of an electronic image for transmission, substituting

the further physical movement of the cheque in writing.

Bearer or Order Cheque: Where nothing is mentioned about a cheque being order or
bearer, it should be treated to be a payable to order. Its conversion from order to bearer
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should be with full signatures.

If both words bearer as well as order is written and none of these is deleted, the cheque
would be considered to be a bearer cheque.

Cheques drawn in different inks, scripts and handwritings would be paid, if

otherwise in order and the paying bank is in a position to read and understand the
instructions of the drawer.

Cheque without a date: to be returned by the Bank, but a holder can complete an
inchoate cheque by filling the date and take the payment of the cheque.

Cheque bearing a date being holiday can be paid on next working day.

Cheque bearing impossible date(e.g. November 31 , may be paid on November 30/

date being February 30 may be paid on February 29/28 as the case may be )

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Ante Dated Cheque: A cheque bearing a date prior to actual date of signing the cheque
or opening of an account is called an ante dated cheque which is valid and can be paid till
it becomes stale cheque.

Stale Cheque: On date of presentation, if the validity period of a cheque has already
expired, it is called stale cheque and it cannot be paid.

Validity Period: Section 138 of NI Act states the cheques should be presented for
payment within 6 months from date on which it is drawn or within its validity, whichever is
earlier.However As per RBI directions date 04/11/2011 (U/s 35 A BR Act) w.e.f
01.04.2012, cheques, demand draft & bankers cheque, presented after 3 months from
their date, cannot be paid by the Banks.

Revalidation of cheques: After a cheque becomes stale, it can be revalidated, any no

of times. The fresh validity runs from the date of revalidation.

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Post dated cheque: The cheque which bears a date subsequent to the date on which it
is drawn and the date has not fallen due till presentation are called post-dated cheques.
Such cheques become effective on the date mentioned on the body of the cheque and
the drawer of such cheque can be sued by the holder after the mentioned date only.
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RBI advised Banks to accept cheques bearing a date as National Calendar

(SakaSamvat) for payment, if otherwise in order. Bank should ascertain the Gregorian
calendar date corresponding to the National SAKA calendar in order to avoid payment to
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stale cheques.

Different types of dates on cheques

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Cheque issued on Cheque dated as Type of Cheque

December 12, 2016 December 01, 2016 Ante- Dated
December 12, 2016 December 31, 2016 Post- dated
December 12, 2016 August 12, 2016 Stale
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CTS – 2010 STANDARD

On the recommendations of a working group, RBI Decided to prescribe certain

benchmarks towards achieving standardisation of cheques known as achieving
standardisation of cheque known as ”CTS- 2010 standard“ . Mandatory features
applicable w.e.f 1.12.2010 is as follow:

1. Paper: paper should have protection against alteration by having chemical

sensitivity to acids, alkalis, bleaches and solvents giving visible results after a
fraudulent attack, CTS-2010 standard paper should not glow under UV light i.e., it
should be UV dull.
2. Watermark: All cheques shall carry a standardised watermark, with the words
“CTS-INDIA” .It should be oval in shape and diameter should be 2.6 to 3.0 cms.
Each cheque must hold at least one full watermark.

3. VOID Pantograph: Pantograph with hidden/embedded “COPY” or “VOID

“feature shall be included in the cheques. This feature should be clearly visible in
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 photocopies and scanned colour images as a deterrent against colour photocopy
or scanned colour images of a cheque.
4. Bank’s LOGO: Bank’s Logo shall be printed in ultra-violet (UV) ink. The Logo
will be captured by/visible in UV- enabled scanners/ lamps. It will establish in
genuineness of a cheque.
5. Mandating colours and background: Light/Pastel Colours so that print/
dynamic contrast ratio (PCR/ DCR) is more than 60% for ensuring better quality
and content of images.
6. Prohibiting alterations/ corrections on cheque: No changes / corrections
should be carried out on the CTS cheques (other than for date validation purpose,
if required). For any change in payee’s name, courtesy amount (amount in
figures), legal amount (amount in words), etc, fresh cheque should be used. This
requirement is for cheques issued under CTS only and no other cheques.
7. Printing of account field: Cheques used in current accounts and corporate
customers, should be issued with the account number field pre- printed.
8. Circulation of non- CTS cheques: Banks have been advised to stop circulation
of such cheques.

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9. Preservation: CTS instruments (including govt. Cheques) are to be preserved for
10 years by presenting banks. In case of investigation, enquiry etc, these are to
be preserved beyond 10 years.
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Cheque and Bill of exchange
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Cheque Bill of Exchange

It could be made payable to bearer or order Cannot be made payable to bearer.
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It can be drawn on bank i.e. drawee could be Could be drawn on any person competent
bank only. to contract
No acceptance for payment is required Without acceptance for payment, the
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drawee is not liable.

No grace period is allowed before payment. Grace period could be allowed upto 3 days
It is payable on demand
It can be crossed It cannot be crossed
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Can be made payable on demand only Can be made payable on demand or after
some days

Section 7 - Drawer, Drawee. The maker of a bill of exchange or cheque is called the
“drawer”; the person thereby directed to pay is called the"drawee”.Drawee in case of
need. When in the bill or in any endorsement thereon the name of any person is given in
addition to the drawer tobe resorted to in case of need, such person is called a “drawee
incase of need ".

Section 8 - "Holder”:The“holder" of a promissory note, bill of exchange or cheque

means any person entitled in his own name to the possession thereof and to receive or
recover the amount due thereon from the parties there to. Where the note, bill or cheque
is lost or destroyed, its holder is the person so entitled at the time of such loss or
destruction.

Section 9-"Holder in due course”: Holder in due course “means any person who for
consideration became the possessor of a promissory note, bill of exchange or cheque if
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payable to bearer, or the payee or endorsee thereof, if payable to order, before the
amount mentioned in it became payable, and without having sufficient cause to believe
that any defect existed in the title of the person from whom he derived his title.

Section 10-"Payment in due course" :"Payment in due course" means payment in

accordance with the apparent tenor of the instrument in good faith and without
negligence to any person in possession thereof undercircumstances which do not afford
a reasonable ground for believing that he is not entitled to receive payment of the amount
therein mentioned.

Section 13 - Negotiable Instruments

(1) Negotiable instrument. A Negotiable Instrument means a promissory note, bill of
exchange or cheque payable either to order or to bearer.
Explanation (i).-A promissory note, bill of exchange or cheque is payable to order which
is expressed to be so payable or which is expressed to be payable to a particular person,
and does not contain words prohibiting transfer or indicating an intention that it shall not

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be transferable.
Explanation (ii).-A promissory note, bill of exchange or cheque is payable to bearer
which is expressed to be so payable or on which the only or last endorsement is an
endorsement in blank.
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Explanation (iii).-Where a promissory note, bill of exchange or cheque, either originally
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or by endorsement, is expressed to be payable to the order of a specified person, and

not to him or his order, it is nevertheless payable to him or his order at his option.
(2) A negotiable instrument may be made payable to two or more payees jointly, or it may
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be made payable in the alternative to one of two, or one or -some of several payees.

Section 14 - Negotiation. When a promissory note, bill of exchange or cheque is

transferred to any person, so as to constitute that person the holder thereof, the
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instrument is said to be negotiated.

Section 15 Endorsing means signing on the face or backside of an instrument (or

even on a paper called Allongeor stamped paper), for the purpose of negotiating
(transferring to next person) a negotiable instrument.
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Sec 16(1)” Endorsement in blank”: If endorser signs his name only, is said to be blank
endorsement.
Endorsement in full: When in addition to signature, endorser adds the words “Pay to”
or “pay to order of”
RestrictiveEndorsement (Section 50): Which restrict further endorsement e.g. Pay to
“X” only.
Partial Endorsement: (Section 56): When an endorser transfers only a part of the
amount of the NI to the endorsee. It is not valid for negotiation.
Conditional Endorsement: If some condition mentioned e.g. pay to X if he returns from
abroad. The paying bank is not bound to verify compliance of such condition. The
conditions are binding between endorser and endorsee only.
Facultative endorsement: Endorser by express words abandons some right or
increases his liability by endorsement e.g. “Notice of dishonor not required”
Sans recourse endorsement (section 52): Endorser by express words excludes his
liability e.g.”Pay to X without recourse to me”

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Section 18 - Where amount is stated differently in figures and words.Ifthe amount
undertaken or ordered to be paid is stated differently in figures and in words, the amount
stated in words shall be the amount undertaken or ordered to be paid.

Section 19 - Instrument payable on demand: When no time given in instrument for

payment, instrument said to be payable on demand.

Section 20 -Inchoate stamped instruments: Holder has a right to complete for any
amount but not exceeding the amount covered by the stamp. The person so signing the
NI will be liable to any holder in due course for such amount and other than holder in due
course cannot recover in excess amount intended to be paid by the signor.

Section 21: “At Sight”, “on presentment”, “After sight”

In a P/N or BoE the expressions: -
(a) “At sight” or “on presentation” means on demand
(b)”After sight” means,
• In a P/N, after presentment for sight.

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• In a BoE after acceptance, or noting for non-acceptance, or protest for
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Sec 22:“Maturity” is of a P/N or BoE is date at which it falls due. Days of Grace: Every
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P/N or BoE which is not payable on demand, at sight or on presentment is at maturity on
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the 3rd day after the day on which it is expressed to be payable.

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Section 23: Calculating maturity of bill or note payable so many months after date
or sight: If payable at stated no. of months: terminate on the day of month, which
corresponds with the day on which the instrument is dated/ presented or the event
happens. If the month in which the period would terminate has no corresponding day, the
period shall be held to terminate on the last day of such month.
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Section 24: Calculating maturity of bill or note payable so many days after date or
sight: the day of the date of NI, or of presentment for acceptance or sight, or of protest
for non-acceptance, or on which the event happens, shall be excluded.
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Section 25: When day of maturity is a holiday (Declared by Central Govt. or Sunday):
the instrument shall be deemed to be due on the next preceding business day.

Section 26: Capacity to make promissory note etc: Every person capable of
contracting can be a part.
* Minor:A minor may draw, endorse, deliver and negotiate such instruments so as to
bind all parties except himself.
* A corporation is not empowered to make, endorse or accept such instruments except
specially permitted by law.

Section 35-Liability of endorser: is bound to compensate every subsequent holder.

Section 36- Liability of prior parties to holder in due course everyparty is liable

Section40- Discharge of endorser’s liability: Where the holder of a negotiable

instrument, without the consent of the endorser, destroys or impairs the endorser’s

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remedy against a prior party, the endorser is discharged from liability to the holder to the
same extent as if the instrument had been paid at maturity.

Section 45- Holder’s right to duplicate of lost bill (before it is over- due): Holder
may apply to drawer to give another bill of same tenor giving indemnity. Drawer is bound
to issue duplicate bill.

Section -50 –Effect of Endorsement: The endorsement followed by delivery has the
effect of transfer of property therein to the transferee, with right of further negotiation.
The Endorsee acquires a right to negotiate the instrument to any one and sue all prior
parties whose signature appears on it.

Section 54- Effect of Blank Endorsement: An order cheque or bill becomes payable to
the bearer, if it bears a blank endorsement.

Section 85(1) Protection to Payee banker for Cheque payable to order: Where a
cheque payable to order purports to be endorsed by or on behalf of the payee, the

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drawee is discharged by payment in due course.

Section 85(2) Protection to Payee banker for Cheque payable to Bearer (once
bearer – always bearer): Where a cheque is originally expressed to be payable to
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bearer, the drawee is discharged by payment in due course to the bearer thereof,
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Section 85A. Drafts drawn by one branch of a bank on another payable to

order:-purports to be endorsed by or on behalf of the payee, the bank are discharged by
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payment in due course.

Section 87: Effect of material alteration: Instrument renders the same void as against
anyone who is a party thereto at the time of making such alteration
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Section 88: Acceptor or endorser bound notwithstanding previous alteration: -

Anacceptoror endorser is bound by this acceptance or endorsement notwithstanding any
previous alteration of the instrument.

Section 89: Payment of instrument on which alteration is not apparent: If

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payment in due course shall discharge such a person or banker from all liability thereon.

Section 123 - Cheque Crossed Generally:Where a cheque bears across its face an
addition of the words and company or any abbreviation thereof, between two parallel
transverse lines, or of two parallel transverse lines simply, either with or without the
words, not negotiable, that addition shall be deemed a crossing, and the cheque shall be
deemed to be crossed generally.

Section 124 - Cheque crossed specially: Where a cheque bears across its face an
addition of the name of a banker, either with or without the words not negotiable, that
addition shall be deemed a crossing, and the cheque shall be deemed to be crossed
specially, and to be crossed to that banker.

Section 126- Cheque crossed specially: Where a cheque is crossed generally, the
banker, on whom it is drawn, shall not pay it otherwise than to a banker. Payment of
cheque crossed specially. - Where a cheque is crossed specially, the banker on whom it

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is drawn shall not pay it otherwise than to the banker to whom it is crossed, or his agent,
for collection.

Section 127: Payment of cheque crossed especially more than one banker :(
except when crossed to an agent for the purpose of collection,): Refuse payment
Section 128: Payment in due course of crossed cheque: Paying Banker gets
protection if a crossed cheque is paid in due course,

Section 129: Payment of crossed cheque out of due course: Bank shall be liable to
the true owner of the chequeto whom it is crossed, or his agent for collection.

Section 130 -Cheque bearing Not Negotiable :A person taking a cheque crossed
generally or specially, bearing in either case the words not negotiable, shall not have,
and shall not be capable of giving, a better title to the cheque than that which the person
from whom he took it had.

Section 131: Protection to collecting banker (or Non- liability of banker receiving

:34
payment of cheque): A banker who has in good faith and without negligence received
Payment for a customer of a cheque crossed to himself shall not, in case the title to the
cheque proves defective, incur any liability to the true owner of the cheque by reason
24 7
only of having received such payment.
21
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Section 138 - Dishonour of cheque for insufficiency, irregular signature,

alterations, stale cheque, stop payment etc., of funds in theaccount:
Where any cheque drawn by a person on an account maintained by him with a banker for
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payment of any amount of money to anotherperson from out of that account for the
discharge, in whole or in part, of any debt or other liability, is returned by the bank
unpaideither because of the amount of money standing to the credit of thataccount is
insufficient to honour the cheque or that it exceeds theamount arranged to be paid from
5

that account by an agreement madewith that bank, such person shall be deemed to have
committed anoffence and shall, without prejudice to any other provision of thisAct, be
punished with imprisonment for a term which may extend to two years, or with fine which
may extend to twice the amount of the cheque, or with both.
The complaint is to be made within one month of the cause of action arising i.e. expiry of
30

notice period.
Summary Proceedings: Fine upto Rs 5000 or imprisonment upto 1 year or both.
Regular Proceedings: Punishment is fine upto double the amount of cheque or
imprisonment upto 2 year or both.
Provided that nothing contained in this section shall apply unless-
(a)The cheque has been, presented to the bank within a period of three months from the
date on which it is drawn or within the period of its validity, whichever is earlier;
(b)The payee or the holder in due course. of the cheque asthe case may be, makes a
demand for the payment of the said amount of money by giving a notice, in writing, to
theDrawer of the cheque, within thirty days of the receipt ofinformation by him from the
bank regarding the return of the cheque as unpaid; and
(c)The drawer of such cheque fails to make the payment ofthe said amount of money to
the payee or, as the case may be to the holder in due course of the cheque, within
fifteendays of the receipt of the said notice.

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Section139: Presumption in favor of holder: It shall be presumed, that the holder of a
cheque received the cheque for the discharge, in whole or in part, or any debt or other
liability.

Section 140: Defense which may not be allowed in any: Prosecution under section
138It shall not be a defense that the drawer had no reason to believe when he issued the
cheque that the cheque may be dishonored on presentment for the reasons stated in that
section.

Section 141 - Offences by companies:

(1) If the person committing an offence under section 138 is a company, every person
who, at the time the offence was committed, was in charge of, and was
responsible to, the company for the conduct of the business of the company, as
well as the
(2) company, shall be deemed to be guilty of the offence and shall beliable to be
proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any person liable

:34
to punishment if he proves that the offence was committed without his knowledge,
or that he had exercised all due diligence to prevent the commission of such
offence.
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(3) Notwithstanding anything contained in sub-section (1), whereany offence under
21
this Act has been committed by a company and it is proved that the offence has
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been committed with the consent or connivance of, or is attributable to, any
neglect on the part of, any director, manager, secretary or other officer of the
company, such director, manager, secretary or other officer shall also be deemed
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tobe guilty of that offence and shall be liable to be proceeded against and
punished accordingly,

Section 142 - Cognizance of offences: Notwithstanding anything contained inthe

5

Code of Criminal Procedure, 1973 (2 of 1974),-

(a)No court shall take cognizance of any offence punishable under section 138 except
upon a complaint, in writing, made by the payee or, as the case may be, the holder in due
course of the cheque;
(b)Such complaint is made within one month of the date on which the cause of action
30

arises under clause

(c) of the provision to section 138;(c) no court inferior to that of a Metropolitan Magistrate
or a Judicial Magistrate of the first class shall try any offence punishable under section
138.

Section 143 -Cognizance of offences: Trial court Magistrate can pass sentence for
imprisonment up to 1 year and fine up to Rs. 5000.00.

The Lok Sabha passed Negotiable Instruments (Amendment) Bill, 2017 on July 23,
2018, Rajya Sabya passed the Bill on July 26, 2018 and subsequently the
Negotiable Instruments (Amendment) Act, 2018 (“Amendment Act”) was notified
on August 02, 2018.

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AMENDMENTS:

Two new Sections i.e. 143A and 148 have been inserted under the NI Act, 1881:

Section 143A- It empowers the Court to order the drawer of the cheque to pay Interim
Compensation to the complainant:
i. In case of a summary trial or a summons case, where the drawer pleads
not guilty to the allegations made in the complaint, and
ii. In any other case, upon framing of the charges.
Quantum of Compensation- The amount shall not exceed 20% of the
amount of the Cheque & interim compensation is to be paid within sixty
days from the date of the order of payment. A further extension of
maximum thirty days can be granted if the drawer of the cheque shows
sufficient cause.
On Acquittal - If the drawer of the cheque is acquitted, the complainant
shall be directed to repay to the drawer the amount of interim
compensation along with interest at the bank rate as published by the

:34
Reserve Bank of India, prevalent at the beginning of the relevant financial
year. The repayment has to be made within sixty days of the date of order
of acquittal subject to a further extension of not more than thirty days if the
24 7
complainant shows sufficient cause for delay.
21
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Section 144 - Service of summons: by speed post or by courier are also acceptable
Section 145 - Evidence of the complaint can be made on affidavit.
Section 146: Banks Returning Memo shall be prima-facie evidence for dishonor of
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the cheque.
Section 147: The offence has been made compoundable.
Section 148 – It empowers the Appellate court to order the drawer to deposit such sum
which shall be a minimum of twenty per cent of the fine or compensation awarded by the
5

trial Court. Such deposit is in addition to the interim compensation already paid pursuant
to section 143 A. The deposit is to be made subject to the following procedure and
conditions laid down in the section:

i. The amount is to be deposited within sixty days from the date of the order of
30

payment. A further extension of maximum thirty dayscan be granted if the

appellant shows sufficient cause.
ii. The amount deposited may be directed to be released to the complainant at any
time during the pendency of the appeal.
If the appellant is acquitted, the complainant shall be directed to repay to the drawer the
amount of the deposit along with interest at the bank rate as published by the Reserve
Bank of India, prevalent at the beginning of the relevant financial year. The repayment
has to be made within sixty days of the date of order of acquittal subject to a further
extension of not more than thirty days if the complainant shows sufficient cause for
delay.

Distinguished features of Negotiable Instruments:

• Transferability: which means if ownership of the property to be passed by mere
delivery in case of bearer instrument and by endorsement and delivery in case of
order instrument.

17 | P a g e
 • Negotiability: It confers absolute and good title on the transferee who takes it in
good faith, for value and without notice of the fact that the transferor had defective
title thereto
• Instruments to be in writing, instrument written in pencil is not prohibited by law
• Unconditional order / Promise: A cheque and BoE contain an order to the drawee
whereas P/N contains a promise by the maker to his creditor.
• Drawee of cheque and BoE: In the cheque, there must be a specified bank while
in BoE, drawee may be any person.
• The amount to be paid must be certain sum of money only and to be written in
words and figure both.
• The instrument must be payable either to order or to Bearer.
• Payee must be a certain person and may be more than one person.
• A cheques is always payable on demand while a bill may be payable at sight or
after a period of time. If no such, time is provided in instrument, it is payable on
demand.
• In NI signature of drawer or promisor is a must.
• Delivery of NI instrument is necessary whether actual or constructive.

:34
• Stamping of P/N and BoE is necessary as per stamp Act 1899, but not required in
case of a cheque.
• RBI Act 1934- Sec 31 prohibit any person or institution to issue bearer on Demand
24 7
P/N or BoE except issued by RBI & Govt. Of India.
21
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5
30

18 | P a g e
 BANKER CUSTOMER RELATIONSHIP

BANKER: Sec 5 (b) of Banking Regulation Act-1949: A banker is a person undertaking

business of banking. Banking means (Sec. 6 of BR Act) accepting deposits from public,
for the purpose of lending, repayable on demand or otherwise withdraw able by cheque,
draft, order or otherwise.

As per the KYC policy (Master Direction - Know Your Customer (KYC) Direction,
2016),
Customer means a person who is engaged in a financial transaction or activity with a
Regulated Entity (RE) and includes a person on whose behalf the person who is
engaged in the transaction or activity, is acting.
BANKER – CUSTOMER RELATIONSHIP in different transactions:
The primary relationship between a banker and customer is that of a debtor and
creditor (Reason: on opening the SF/CA/Term/any deposit account the banker

:34
becomes a debtor). However a banker is different from an ordinary debtor on two counts,
viz.
24 7
• 21
The banker is required to pay the customer only when payment is demanded
within business hours of a working day at the branch (An ordinary debtor should
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search for his creditor and repay the debt).

• For a normal debt, the period of limitation start from the date of debt. However, in
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case of bank deposits, it starts from the date of demand, by the depositor.
Apart from the primary relationship, there can be other legal relationship between a
banker and customer depending up to the transaction some of which are given
5

hereunder:
Type of transaction Relationship
Banker Customer
1. Acceptance of Deposits Debtor Creditor
30

2. Loan from bank Creditor Debtor

3. Collection of cheque on behalf of Agent Principal
customer
4. Sale/purchase of securities/shares Agent Principal
on behalf of Customer
5. Safe Custody of articles Bailee Bailor
6. Safe deposit locker Lessor Lessee
7. Payee of a Draft & Issuing Bank Trustee Beneficiary
8. Money tendered to bank pending Trustee Beneficiary
instruction for its disposal
9. Articles left by Mistake Trustee Beneficiary
10. Carrying on standing instruction Agent Principal
11. Purchase of draft Debtor Creditor
12. Mortgage Mortgagee Mortgagor
13. Hypothecation Hypothecatee Hypothecator
14. Assignment Assignee Assignor
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BANKER’S OBLIGATIONS:
DUTY TO MAINTAIN SECRECY OF ACCOUNTS: In addition to implied contract
between bank and customer not to disclose the affairs of the customers, (section 13 of
banking companies acquisition & transfer of undertakings act 1970 Nationalisation of 14
banks) except under the following circumstances:
• Disclosure is compulsion of law e.g. (i) Companies act U/s 235/237 to inspector
appointed by Central Govt for investigating the company concerned; (ii) Banker’s
Book evidence act U/s 4 to court for legal proceedings; (iii) Code of civil procedure
act u/s 94(3) to Police inspector for investigation; (iv) U/s 12(2) of FEMA for
making inspection of books:
• Interest of Bank require disclosure e.g. (i) disclosure to guarantor to recover dues;
(ii) disclosure to Bank Lawyer to file suit; (iii) disclosure to other banks to
ascertain credit worthiness of borrower as per IBA guidelines

:34
• With express/ implied consent of customer, strictly in terms of direction e.g. (i)
Disclosing information to guarantor, (ii) disclosing information to staff of customer
regularly visiting branch for banking business of the customer etc. However, for
24 7
21
disclosing information of Husband or wife’s account to Wife or Husband cannot
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be taken as implied consent.

• Disclosure to Incharge of Police Station U/s 91(1) of Cr PC. U/S 102, a police
officer can seize a stolen property (including money lying in a Bank).
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• Disclosure to Income tax authorities (U/s 131 and 133, of Income Tax act).
• Submitting return to RBI of accounts not operated for the last 10years (Disclosure
U/s 26 of BR Act)
5

• Disclosure to RBI: RBI can collect any information in such a manner as it thinks fit.
(U/s 45 B of RBI act)
Banker is bound by this duty even after closure of account or death of the
customer
30

BANKER’S RIGHTS:
The primary rights enjoyed by a banker are:
(a) Right of General Lien
(b) Right of Set-off,
(c) Right of Appropriation&
(d) Right to act as per mandate of the customer.

RULE IN CLAYTON’S CASE

This rule, which was laid down in the famous case Devayanasvs. Noble states the rule of
appropriation in running accounts like Cash Credit and Overdraft accounts.
As per this rule, each withdrawal in a cash credit account is considered as a new loan
and each deposit as a repayment of the loan in the order in which it is made. The first
20 | P a g e
debit in the account is considered to have been discharged or reduced by the first item in
credit side and accordingly other entries follow suit in chronological order.
It is to avoid application of this rule, the bankers stop operation of the account in case of
death/insolvency of a partner/guarantor/joint account holder.

:34
24 7
21
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5
30

21 | P a g e
 GARNISHEE ORDER & INCOME TAX ATTACHMENT ORDER

Obligation of the Bank to honour the cheques issued by the customer (subject to
fulfilment of certain conditions stipulated U/s sec.31 of NI Act) is not applicable when
either a Garnishee Order or an attachment Order is received by the bank.

GARNISHEE ORDER
A garnishee Order is an attachment order issued by a Court at the request of a creditor to
attach his debtor’s fund in the hand of a banker. Garnishee means a debtor to the debtor
and accordingly the banker who holds the deposit balance of the debtor is called the
garnishee, it is called a garnishee order.
A Garnishee Order is issued in two stages, first as an Order Nisi and then an Order
Absolute.
Order Nisi

:34
An Order Nisi requires the banker to explain as to why the funds of the depositor should
not be attached towards satisfaction of the dues of the judgement creditor.
On receipt of an “Order Nisi” the bank is bound to stop operation in the depositor’s
24 7
21
account. He must immediately inform the customer about the receipt of the order.
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Order Absolute
• After receipt of the explanation from the bank the Court may issue “Order
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Absolute”.
• On receipt of “Order Absolute”, the bank should pay the amount to the court.
5

• The production of passbook or deposit receipt is not necessary for making such
payment.

Amount of the Garnishee Order

30

A garnishee order usually does not mention the amount. In case no amount is
mentioned, the entire balance should be attached. However, if it is issued for a specific
amount, only that amount should be attached.

Accounts to be attached
Principle: Garnishee Order extends only to those accounts, which are held in the same
capacity in which the order is issued and not to accounts held otherwise.
Type of Deposits Attached
1. All deposits due and accruing due are attached.
2. Deposits due means SF, CA, Call deposits payable on demand and overdue time
deposits (as they are due for payment).

22 | P a g e
3. Deposits accruing due are term deposits, which will mature for payment in future.
Accordingly, Garnishee Order attaches the term deposits however, the amount is
payable only on their maturity.
4. Where before receipt of a Garnishee Order an amount is passed for payment, the
debit entry is made and token issued but the amount is still not paid by the Cashier,
the Garnishee Order attaches such amount (Reason: A payment is not conclusive
unless the amount is actually parted by the bank).

5. Similarly where a cheque is received in clearing for payment and a Garnishee Order is
received before the time within which the clearing cheque can be returned unpaid, the
cheque should be returned unpaid and the amount attached by the order.

Type of Asset not attached:

1. A garnishee order attaches only debt. It does not extend to funds/goods/money held

:34
by a bank other than as a debtor. Therefore, funds held in safe custody, safe deposit
locker, funds held in trust are not attachable by a Garnishee Order.
24 7
21
2. Cheques, Bills sent on collection are not attachable. (Reason: The relationship of
-20 52

banker and customer is not that of a debtor and creditor). However, if a cheque has
been collected at an upcountry centre (drawee’s account debited through clearing
or otherwise), but credit is not given to the payee’s account for want of the credit
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advice from the collecting branch, that amount can be attached.

3. The sale proceeds of shares/securities yet to be received by the bank cannot be

attached.
5

4. Call Deposits payable on Notice cannot be attached. (Reason: They are neither due
nor accruing due unless a notice demanding payment is received by the bank).
30

5. Cash Credit A/c: The undrawn portion of a cash credit account cannot be attached, as
it is not debt due.

6. Uncleared Balance in SF/CA account cannot be attached.

Future Credits: The balance available at the time of the receipt of order is taken into
consideration for attachment. Credits/deposits given after the receipt of the order are not
attachable. To illustrate, if the Garnishee Order is received at 11 A.M., the money
deposited at 1 P.M. in the account is not attached.
Notice to Customer: On receipt of a garnishee order, the customer should be informed
about it, at the earliest.

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Right of Set-Off: The bank is entitled to exercise its right of set off for all debt due from
the customer (but not contingent dues) before complying with the order.
A Garnishee Order can be served at the Head Office of a Bank. However, it will become
effective on the branch after a reasonable time, which is required to send the
communication.

Balance with foreign branches: No garnishee order can be issued for attaching
balance available in foreign branches of a bank in the name of the debtor.

Salary: A garnishee order cannot attach salary.

Cheques marked Good for Payment:Cheques marked “good for payment” by a

:34
banker can be paid even after the receipt of garnishee order (as it constitutes the liability
of the bank 24 7
21
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INCOME TAX ATTACHMENT ORDER

Issued under Sec.226 (3) of Indian Income Tax Act, 1961, by an Income Tax
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Officer.Section 226(3)

This section authorizes the ITO “to require, by notice in writing, any person from whom
5

money is due or may become due, to the assessee, or any person holds or may
subsequently hold money for or on account of assessee, to pay the Income Tax Officer
an amount equal to the amount of arrears of tax”.
30

It is not only debts due and payable (as is the case with a garnishee order), but also any
money held on account of assessee is attached by an Income Tax Attachment Order.

Accordingly, it can attach: (I) Saving Fund and Current Account, (ii) Term Deposit
(however, amount is payable on maturity), (iii) Proceeds of Collection item not credited to
account

Joint Account: Even though the order is received in a single name, it attaches balance
(pro-rata) in any joint account maintained by such person. Unless it is proved otherwise,
the share of the joint account holders is considered to be equal (Section 226(3)(iii)).

24 | P a g e
Account in the name of a deceased or insolvent person: An I.T. attachment order
attaches the funds held on account of a deceased or insolvent depositor. (Garnishee
Order does not attach the same).

Attachment of joint account towards the dues payable by a deceased depositor:

Where the attachment order relates to the arrears of tax dues on the estate of the
deceased depositor, the balance in the joint account in his name need not be attached.

Accounts in other capacities: If the order is individual name, it does not attach
accounts in the name of partnership firms (where he is a partner) or in the name of a trust
(where he is a trustee).

Money held subsequent to receipt of order: As per the Act, the order attaches the

:34
money held or that may be subsequently held. Accordingly if an order is received at 10
AM and an amount is deposited at 11 AM, this amount should also be attached by the
order.
24 7
21
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Right of Set-Off: The bank is entitled to first exercise its right of set off before acting on
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the order.

Penalty: Where a bank fails to attach the amount it would be deemed to be an assessee
5

in default.

Action to be taken on receipt of the order

30

1. On receipt of the order, the customer must be given notice.

2. The account holder must be informed about the payment to I.T.O.

3. Like Income Tax Attachment Order, attachment orders can also be issued under
Wealth Tax Act, The Recovery of Debts due to Banks & Financial Institutions Act, 1993
and also Sales Tax Acts of different States.

25 | P a g e
 Particulars Garnishee order Income Tax Order
Authority Court Revenue/Tax authority
Amount May be specific Must be specific, else it is a
not valid
Applicable amount At the time of receipt At the time of receipt and
all credits after Receipt
Joint Accounts
Order Single name Not applicable Applicable pro-rata
Order Joint Names Applicable Applicable
Order in name of Not applicable Not applicable
Partner, Trustee,
executor, director Etc.
Deceased accounts Not Applicable Applicable

:34
Insolvents Not Applicable Applicable
24 7
21
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Undrawn CC or OD Not applicable Not applicable

balances
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Proceeds of Not attached Attached

cheques/Bills on
collection
5

Future Credits Not attached Attached

Right to set off Available Available

30

Both received Preference to attachmentPreference to attachment

simultaneously or being State dues. being State dues.
pending for payment
Limitation 12 Years 30 years being Govt dues.

26 | P a g e
DIFFERENT TYPE OF CUSTOMERS

MINOR
A minor (of Indian domicile) as defined in Sec. 3of Indian Majority Act, 1875, is a person
who has not completed 18 years of age.
WHO IS THE GUARDIAN OF A MINOR: The guardian to a minor can be a: (a)
Testamentary Guardian, or (b) Legal Guardian, or (c) Natural Guardian.
Testamentary Guardian
• Guardian appointed by the will of the minor's father is called testamentary
guardian.
• Such guardian acts only after the death of the father & mother of the minor child.

:34
Legal Guardian: Where there is no natural guardian, or testamentary guardian, the
Court can appoint a guardian i.e. legal guardian as per the provisions of Guardian and
Wards Act, 1890.
24 7
Natural Guardian:
21
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• Sec.6 of Hindu Minority & Guardianship Act, 1956provides that in case of a Hindu
minor boy or unmarried girl, the father and after his death the mother shall be the
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guardian of both person and property of the minor. Opening of Fixed Deposit,
Recurring & Savings Deposit account under the guardianship of mother has been
allowed by RBI (provided accounts are not allowed to be overdrawn).
5

• After the death of both father and mother, a minor can be represented only
through a legal guardian.
• Step father/step mother cannot act as natural guardian.
• For a minor married girl, her husband (if major) is the natural guardian. In case
30

the husband is a minor, her father (or mother, if the father is dead) may continue
to be natural guardian.
• For a minor married girl, who has become a widow, her husband’s father (mother,
if father is dead) is to act as natural guardian.
• In case of an illegitimate minor child, his/her mother is the natural guardian.
• The natural guardian of an adopted son is his adoptive father/mother.
For a Muslim minor, Father is the natural guardian.After father, guardianship lies with
(i) executor appointed by father’s will and after him (ii) father’s father (iii) the executor
appointed by the will made by the father’s father.
Where none of these persons is alive, the minor can be represented only by a legal
guardian.

27 | P a g e
In case of Christians and Persons of other Religions: The father, and on his death,
mother acts as natural guardian. Where both are dead, a person appointed by Court can
alone act as guardian.

TYPE OF DEPOSIT ACCOUNT FOR MINOR’s

(i) Minor’s Account to be operated by guardian
(ii) Minor’s Account to be operated by himself/herself.

Minor’s Account Opened and Operated by Guardian: Single or Joint A/c.

The guardian can open a deposit account in sole name of the minor to be operated by
him on behalf of the minor. Alternatively, he can open a joint account in the name of the
minor and himself.

:34
Guardian’s Power
24 7
•
21
He can operate the account on behalf of the minor.
-20 52

• He can foreclose the term deposit or avail loan against the same for the benefit of
the minor.
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• His power to operate account/foreclose deposit/borrow against deposit ceases

as soon as the minor attains majority.
5

When Minor Attains Majority: From the date the minor becomes a major, he has the
sole right to operate the account (not the guardian).
For term deposits maturing for payment on or after a date on which the minor attains
majority, the guardian has no power to foreclose the same. The amount should be paid
30

to the minor upon his attaining majority.

Advance against Minor’s Deposit: Should be sanctioned only for the benefit of the
minor.
Death of Minor: Balance is payable as a claim case.
Death of Guardian: The balance is treated as a Trust and is paid to the minor upon his
attaining majority

Self Operated Minor Account: Minors who have completed 10 years of age, who are
literates and can sign uniformly are permitted to open S.F. or F.D./RD account (not
Current Account) in their own name and operate the same.
Cheque book may be issued where:-
28 | P a g e
 i. Where the minor account is opened through his/ her natural or legally
appointed guardian.
ii. Minor above the age of 10 Years. (IAD Cir 10/2018)

Term Deposits: Opening of Term deposits including R.D. can be allowed for any
amount. No advance can be given against such deposits.

ILLITERATE PERSONS

i) Capacity to Contract: Persons who cannot read and write are called illiterates but like
others, illiterate persons are fully competent to enter into contracts.

:34
ii) Type of Account: No Current Account should be normally opened in the name of
illiterate persons as it would be difficult to identify his LTI in cheque issued by him. SF
24 7
21
and Term Deposit Accounts can be opened with condition that withdrawals will be
-20 52

allowed only in person.

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iii) Joint Account: Joint Accounts in the name of two illiterates can be opened after
observing usual safeguards.
5

iv) Operation:
• No cheque book is to be issued. Withdrawal should be allowed only in person
after proper identification. The passing official will verify in the withdrawal form
under his signature to the effect that the left hand thumb impressions affixed in his
30

presence and the amount withdrawn is orally confirmed, by the (illiterate)

depositor.
• Where the illiterate person gives a power of attorney in his account, the mandate
should be attested by a Notary public.
BLIND PERSONS
i) Risks in Opening Account in the Name of Blind Persons
- Blind persons are fully competent to enter into contract and there is no legal bar in
opening accounts in their name or getting loan documents executed by them.

- However, in case of dispute they can always argue that the terms and conditions
of the account and the amount paid were misrepresented to them. They may
dispute their signature at a later date. The courts may also believe this on account

29 | P a g e
 of their blindness. For this reason, banks should be extra careful while opening
and allowing operations in the accounts of blind persons.

ii) Accounts in the name of Blind Persons

- a) A blind person may be allowed to open a savings account, singly or jointly with
others. His/her signatures (if literate) and left/right hand thumb impression (if
illiterate) will be taken, in the presence of an Officer, authorised to open accounts
and witnessed by an existing account holder or person otherwise having some
business relationship with the bank and attested by the officer concerned.
- b) Wherever possible, number and details of one or more identification marks of
the blind person i.e. mole or scar, will be noted on the account opening form and
- Specimen signatures slip, under authentication of the checking official. Three
copies of photograph, (Passport size), of the blind person, duly attested by the

:34
checking official, will be taken and pasted on account opening form, specimen
signatures slip and pass book. The cost of photographs may be debited to the
bank's revenue, at the discretion of the incumbent incharge.
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-
21
c) While opening such accounts, the rules and conditions governing such
-20 52

accounts, in general and the special conditions, in view of his/her physical

infirmity be written on the account opening form and explained to the blind person,
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in the presence of a witness. A suitable certificate from the witness, for having
done so, should be obtained, at appropriate place, on the account opening form.
- d) A rubber stamp indicating that the account holder is blind, should be affixed on
the account opening form, specimen signatures slip; pass book, pay-in-slip,
5

withdrawal slip and cheque book, etc.

PURDANASHIN LADIES
30

A purdanashin lady is a woman who remains in complete seclusion and does not
transact with people other than her family members.
The banks should also obtain photographs of 'Pardanashin’ Women.
Current accounts may not be opened in the names of purdanashin ladies without the
sanction of the Circle Office

TRUST ACCOUNT
OPENING OF TRUST ACCOUNT: Documents Required

For opening an account of a trust, certified copies of each of the following

documents or the equivalent e-documents thereof shall be obtained:

30 | P a g e
a. Registration certificate
b. Trust deed
c. Permanent Account Number or Form No.60 of the trust
d. Documents, as specified in Section 16, relating to beneficial owner, managers,
officers or employees, as the case may be, holding an attorney to transact on its behalf
e. The names of the beneficiaries, trustees, settlor, protector, if any and authors of the
trust
f. The address of the registered office of the trust; and
g. List of trustees and documents, as specified in Section 16, for those discharging the
role as trustee and authorised to transact on behalf of the trust.

SCRUTINY OF TRUST DEED AND OPERATION OF ACCOUNT

Joint Signatures
• Unless the trust deed provided otherwise, all trustees must join in operating the

:34
account (Sec. 48 of Indian Trust Act).
• All trustees can sign a resolution and instruct bank to allow one or more of them to
operate the account. In the absence of such instruction all trustees must join in
24 7
signing the cheque.
21
-20 52

No Delegation: Unless the trust deed provides otherwise, trustee(s) cannot delegate
his/their powers. (Sec.47).
-11 216

Borrowing Power: Unless the trust deed gives power to borrow money, trustees cannot
borrow or overdraw account. To be on safe side the bank should ask for personal
guarantee of trustees, while giving advance.
5

Death of Trustee
• If the sole trustee dies, the operation in the account should be stopped. Cheques
signed by him are not to be paid.
• If one of the trustees dies/retires the surviving trustees can operate the account if
30

the trust deed provides of. For example, if the trust deed provides that minimum
two trustees can operate the accounts, the operation of the account need not be
stopped as long as the number of surviving trustees is two or more.
Insolvency
• Even if a person is declared insolvent, he can continue to be the trustee.
• The trust property cannot be attached to pay the dues of a trustee who is declared
insolvent.
BREACH OF TRUST
• In case of a trust account, the bank must take all possible precautions to protect
the interest of the beneficiaries of the trust. So far as the use of trust money is
concerned, bank’s responsibility is as good as that of trustee. In case there is
misuse of money within his knowledge, he will be liable for “breach of trust” and
will be required to compensate the beneficiary for any loss.
31 | P a g e
 • Breach of Trust can be established where bank allows transfer of funds form
trust account to the personal account of the trustee or where a cheque favouring
the trust is collected in the personal account of the trustee.

BANK IS NOT BOUND BY TRUST: It is an accepted practice that the bank should
guard against misappropriation in all accounts where there are circumstances to indicate
that it is a trust. However there is no responsibility on the part of a bank to enquire as to
whether an account is a trust account or not. A bank is not bound by trust, if it is not
within his knowledge.

JOINT HINDU FAMILY

Joint Hindu Family or Hindu Undivided Family (HUF) is governed by Hindu Law except to
the extent altered by certain acts.

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Karta and Co-parceners
• The eldest member of the HUF is called Karta and other members are called
24 7
co-parceners. 21
-20 52

• Although the Karta is competent to bind the family, yet in practice, the loan
documents should be signed by the Karta & all major co-parceners of a HUF. By
Signing the documents, the major co-parceners will become personally liable.
-11 216

• Further the liability of co-parceners is limited only to the extent of their share in
HUF property. However, if the documents are executed by all co-parceners they
become personally liable.
5

• Where there is a minor co-parcener, his guardian should sign the document on his
behalf. Upon attaining majority, express consent should be obtained from him.
30

Ancestral Business
• The HUF carries on the ancestral business and possesses ancestral properties.
• The bank must verify the purpose for which the loan is availed. In case the Karta
borrows for any new business, the co-parceners, unless they have joined in
executing document, are not liable for the debt.
• But in case of a HUF consisting of father and sons, the new business started by
father is deemed to be ancestral and co-parceners can be made liable to the
extent of their shares in family property.

Operation of Account
• A co-parcener, even though not permitted to operate the account, can
countermand the payment of a cheque.

32 | P a g e
 • The Karta can give a mandate in favour of a major co-parcener to operate the
account.
• Mandate in favour of a third party to operate the account is not acceptable unless
all co-parceners execute an indemnity.
• For opening a HUF account, apart from the accounting opening form, a half
yearly declaration letter regarding change in family on PNB 36 signed by
KARTA is obtained.

CLUBS, COMMITTEES, ASSOCIATIONS, REGISTERED CLUBS/ASSOCIATIONS

• Clubs can be registered or unregistered.
• The Registrar of Societies, after registering the bye-law of the society, issues a
Registration Certificate.

:34
•
UNREGISTERED ASSOCIATIONS
24 7
•
21
Examples of unregistered associations are: (I) some schools, (ii) some clubs, (iii)
-20 52

other associations not registered.

• Should be opened only in case of very reliable persons.
-11 216

• All members of managing committee/governing body should sign the resolution

as per the rules.
• In no case overdraft should be given in such accounts.
5

• No loan should be sanctioned to unregistered associations

For opening an account of an unincorporated association or a body of individuals,

certified copies of each of the following documents or the equivalent e-documents
30

thereof shall be obtained:

a. Resolution of the managing body of such association or body of individuals

b. Permanent Account Number or Form No. 60 of the unincorporated association or a
body of individuals
c. Power of attorney granted to transact on its behalf
d. Documents, as specified in Section 16, relating to beneficial owner, managers,
officers or employees, as the case may be, holding an attorney to transact on its behalf
and
e. Such information as may be required by the RE to collectively establish the legal
existence of such an association or body of individuals.

Explanation: Unregistered trusts/partnership firms shall be included under the term

‘unincorporated association’.

Explanation: Term ‘body of individuals’ includes societies.

33 | P a g e
Payment of cheques: Cheques signed by an authorized signatory can be paid even
after his death, insolvency or retirement.

Collection of Cheques
• Cheques favouring the club/association should not be collected in the personal
account of its office bearers / employees as bank can be held guilty of conversion.
• Cheques drawn by the club in favour of third parties should not be collected in the
personal account of office bearers/employees for the abovementioned reason.

CO-OPERATIVE SOCIETIES: A co-operative society is an association registered under

the provisions of the Co-operative Societies Act of the State concerned. Therefore, all
formalities required for opening the account of a registered association must be complied
with by the bank.

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As per directives issued by the Reserve Bank of India, Banks are prohibited from
opening saving accounts in the name of Govt. Departments or Bodies/Municipal
24 7
21
Corporations or Municipal Committees/Panchayat Samitis/ State Housing Boards/ Water
-20 52

and Sewerage/Drainage Boards/State Textbook Publishing Corporations/Societies/

Metropolitan Development Authority/State or District Level Housing Co-operative
Societies/ Any Political Party/ Any Trading, Business or Professional Concern,
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depending upon budgetary allocations for performance of their functions whether such
concern is a proprietary or a partnership firm or a company or an association and entities
other than individuals, Karta of HUF, and organization/agencies.However, the
5

prohibition will not apply to Primary Co-operative Credit Society, Khadi & Village
Industries Boards, APMC etc. etc. (For complete details please refer to RLBD Cir
No.29/2022).
30

LOCAL AUTHORITIES:
• Examples of local authorities are: (I) Municipal Corporation, (ii) Zilla Boards, (iii)
Notified Area Council, etc.
• These authorities are established under separate statutes of State/Central
legislature.
• Bank must obtain copy of such statute and find out the provisions as to who would
authorize opening bank account and who can be authorized to operate the
account.
• Generally, these authorities have a Managing Committee; with a President, Vice-
President & Treasurer, and the Treasurer is given powers to open and operate
bank account.
• No overdraft/advance should be given to such authorities, except to the extent
and for the purpose permitted by the statute.

34 | P a g e
GOVERNMENT DEPARTMENTS
• Obtain copy of the government Notification/order authorizing the concerned
person to open and operate account.
• Obtain copy of the letter signed by the Head of the Department, authorizing the
executive to open and operate bank account.
• Also obtain certified copy of rules and regulations framed by the department for
opening and operation of such account.

PARTNERSHIP FIRM
The law relating to partnership firms is codified in Indian Partnership Act.
• U/s 4 of the Act, a partnership is a relationship between two or more persons who

:34
agree to share the profits of business carried on by all or any of them acting for
all.The contract (agreement) may be written or oral. The document containing the
written agreement is called “partnership deed”.
24 7
•
21
Since partnership arises out of a contract, persons who are incapable of entering
-20 52

into contract (i.e. minors, insolvents, alien enemy) cannot enter into relationship
arrangement with others
-11 216

Minimum and Maximum Number of Partners: The minimum number is two.

The partnership Act does not provide for any ceiling in the number of partners. However,
5

As per section 464 of companies Act 2013, the maximum number of partners can be 100
(previously as per, section 11 of Companies Act 1956, the number of partners of a firm
carrying on banking business should not exceed 10 and that carrying any other business
20)
30

LAW RELATING TO PARTNERSHIP

Registration of the Firm: It is not compulsory to register a firm. However unregistered

firms suffer from certain handicaps.
Effects of Non-registration (Sec.69)
• The partners of an unregistered firm cannot sue the firm or any partners of the firm
for enforcing rights arising out of a contract or from the partnership Act.
• An unregistered firm cannot sue third parties to enforce its rights arising out of a
contract.

35 | P a g e
 • Though the rights of non-registered firm are affected, the right of third party to
proceed legally against the firm to enforce its rights arising out of a contract is not
affected by the fact that the firm is unregistered.

Banks’ Preference: Banks prefer to deal with registered firms particularly while
sanctioning credit facilities, Reasons:
(i) It is easy to verify the particulars about the firm with the Registrar of Firms.
(ii) A registered firm is in a better position to pay its debts as it can sue outsiders to
recover its debts.

OPERATION OF ACCOUNT
1. Operation only by Authorised Persons: Only partners/person authorized by
the partnership deed or separate authority letter signed by all partners should be

:34
allowed to operate the account. Cheque signed by other partners can be returned
unpaid. In case the authority is not given to any particular partner/s to operate the
account, all partners will jointly operate the account. No operation is to be allowed
24 7
21
by the partner in whose favour authority is not available.
-20 52

2. A partner authorized to operate account cannot delegate his authority to another

person.
-11 216

3. Any partner, whether authorized to operate account or not can stop payment of
a cheque.
4. Revocation of mandate: Any partner (whether allowed to operate the account or
5

not) can revoke/cancel authority given for operation of account. However, the
authority cancelled, can be reinstated only under the signature of all partners.
5. Death/Insolvency/Retirement of Partners: A firm gets automatically dissolved
on the death, insolvency or retirement of one or more than one partners unless
30

there is a specific provision in the partnership deed to the effect that the remaining
partners, would continue the partnership in case of such eventuality. No public
notice is required.
• Cheques signed by a partner, who is adjudged insolvent, should not be paid
unless it is confirmed by other solvent partners.
• On the death/insolvency/retirement of a partner the operation of the account
should be stopped.
• If the account has credit balance, the balance should be given to all surviving
partners under their joint signatures or anybody authorized by them.
• In case there is debit balance (i.e. over draft/cash credit account) no further debit
or credit should be allowed in order to keep the deceased/insolvent/retired
partner’s estate liable for the debt.

36 | P a g e
Lunacy of a Partner: Cheque signed by other partners can be paid even after the
lunacy of a partner. However, cheque signed by the lunatic should be returned unpaid.
Illiterate Partner: A partner who is illiterate should not be allowed to operate the
account.
DISSOLUTION OF A FIRM: A firm is said to be dissolved when the partnership relation
between the partners comes to an end.
Effect of Dissolution
• Each partner ceases to have authority (i.e. agent), to bind the firm.
• All partners at the time of dissolution remain jointly and severally liable for all dues
of the firm outstanding on the date of dissolution.
• A partner retiring from partnership will continue to be liable to third parties for any
act done after his retirement unless a public notice is given regarding the
retirement.

:34
RECONSTITUTION: In case the partnership deed provides for the continuation of the
24 7
21
firm by the remaining partners and these partners opt for the same, then the firm is said
-20 52

to be re-constituted.
Action to be taken by Bank in case of Reconstitution
-11 216

• Where the bank wants to keep the outgoing partners liable, it should not
recognize reconstitution & following steps are required to be taken:
•
5

Give notice to the retiring partner/legal heirs of deceased partner to the effect that
they would not be released of their liability.
• The account should be frozen under notice to all partners.
• No credit/debit should be allowed to avoid operation of rule laid down in Clayton’s
30

case.
• In case the bank recognizes the reconstitution, it should ask for:
i) Consent letter from guarantor.
ii) Consent form mortgagors to the effect that the mortgage will continue to be
available for the drawings of the reconstituted firm.
iii) Confirmation of balance by all partners.
In case of reconstitution of a firm due to the admission of a partner, a letter from the new
partner should be taken to the effect that he undertakes the liability of the firm incurred
before his admission.
FORMATION OF A NEW FIRM BY THE REMAINING PARTNERS: Where the
partnership deed does not provide for reconstitution, the firm cannot be reconstituted. It
stands dissolved on the death/ insolvency/retirement of a partner(s).

37 | P a g e
In such a case if the remaining partners decide to continue the business, it would be
considered as a new partnership.
All procedure applicable to advance given to a new partnership should be done afresh
for this account.
JOINT STOCK COMPANIES
The Companies Act, 1956 recognizes a Joint Stock company as a legal person. It is a
separate legal entity.
TYPES OF COMPANIES
• Companies limited by shares can be classified into three categories viz., (I)
Private Ltd. Co. (ii) Public Ltd. Co. and (iii) Government Company.
• A Private Ltd. Co is a company which by its articles (I) restricts transfer of its
shares (ii) prohibits itself from inviting subscription of shares/debentures from
public, (iii) limits the number of its members to 200.

:34
• A Public Ltd. Co does not have such restrictions.
•
24 7
A Government Co. is a company where not less than 51% of the share capital is
21
held by government (central/state/both).
-20 52
-11 216

Company Limited by the guarantee: A company limited by guarantee is a registered

company having the liability of its members limited by its memorandum of association to
such amount as the members may respectively undertake to pay, if necessary, on
liquidation of the company. The Companies Act 2013 came into force w.e.f.12.09.2013.
5

As per this ACT, the concept of small company, Dormant Company and One Person
Company have been introduced.
Small company means a company other than a public company where:
i) Paid up share capital of which does not exceed 50 lacs rupees or such higher
30

amount as may be prescribed which shall not be more than 5 crore rupees or
ii) Turnover of which as per its last profit and loss account does not exceed 2
crore rupees or such higher amount as may be prescribed which shall not be
more than 20 crore rupees.

Dormant Company means a company formed for a future project or to hold an asset or
intellectual property and has no significant accounting transaction.

DOCUMENTS RELATING TO COMPANY ACCOUNTS

For opening an account of a company, certified copies of each of the following

documents or the equivalent e-documents thereof shall be obtained:

38 | P a g e
a. Certificate of incorporation
b. Memorandum and Articles of Association
c. Permanent Account Number of the company
d. A resolution from the Board of Directors and power of attorney granted to its
managers, officers or employees to transact on its behalf
e. Documents, as specified in Section 16, relating to beneficial owner, the managers,
officers or employees, as the case may be, holding an attorney to transact on the
company’s behalf
f. The names of the relevant persons holding senior management position; and
g. The registered office and the principal place of its business, if it is different.

i) Certificate of Incorporation is issued by Registrar of Companies. This gives the

conclusive proof that all formalities involved in formation of a company are duly complied
withCorporate Identity Number to be allotted to the Company on and from the date of
incorporation.

:34
ii) Memorandum of Association (also known as charter of the company or
document of outdoor management)
24 7
• 21
Specifies relationship of the company with outside world.
-20 52

• The memorandum of association of every company contains the following six

clauses (I) Name clause (which gives the name of the company), (ii) Place clause
-11 216

(gives address of the registered office of the company), (iii) Objects clause (gives
the activities the company can pursue), (iv) Liability clause (gives that the liability
of shareholders is limited), (v) Capital clause (gives the maximum capital the
company can issue/authorized capital), (vi) Association clause
5

• The object clause usually sets out the powers which the company can exercise for
achieving its objectives. A loan given for an activity which is not stated in objective
clause is unauthorized (ultra vires) and cannot be recovered from the company.
For this reason, memorandum of association is also called charter of the
company.
30

iii) Articles of Association (Document of indoor management)

• Like Memorandum of association, it is also a public document.

• It contains the rules and regulations for internal management of the company like
the powers of Board of Directors, Rules for conducting meetings, use of common
seal, use of borrowing power etc.

• The Articles are subordinated to memorandum.

• A public limited company may opt not to register article of association. In that case
the rules and regulations given in Table A in first schedule of the Companies Act
will be taken as the article of association of the company

Omnibus Resolution

39 | P a g e
 • A resolution (passed by Board) authorizing to open account in the name of the
company with any bank at any place is called Omnibus resolution.
• An omnibus resolution can be accepted for opening current account. No
credit/overdraft facility is sanctioned in the account, based on such resolution.

OPERATION OF COMPANY ACCOUNT

• Cheque signed by an authorized person can be paid even after his death or
insolvency.
• Cheques payable to a limited company should not be collected in personal
account of any director, employee/ official of the payee company.
• Cheques issued by a company in favour of a third party and endorsed by the
payee in favour of a director/employee of the company should not be collected
without proper enquiry.

:34
24 7
Insolvency 21
-20 52

• A company cannot be declared insolvent. Where a company cannot pay its debts
it can be liquidated/wound up.
-11 216

• Where one of the directors becomes insolvent, it does not affect operation of
account. Cheques signed by him can be paid. However, after insolvency he
cannot act as director.
•
5

If one of the two directors of a Private. Ltd. Co. is adjudged insolvent; the
operation in the company’s account should be stopped till a fresh director is
appointed.
30

NON-PROFIT MAKING COMPANY

• A limited company need not add the word limited to its name if it is a non-profit
making association formed for the promotion of art, literature, religion and
licensed by Central Government under Sec. 25 of Companies Act, 1956.
• The word “limited” in the name of a company indicates that the liability of a
shareholder is limited to the extent of the face value of shares held by him.
ACCOUNTS TO COLLECT SUBSCRIPTION
• When a newly formed public limited company wants to open a bank account for
the purpose of collection of subscription money for its shares/debentures, banks
should note the following points.
• It is the responsibility of banker to ensure that the money is not withdrawn/utilized
till the company obtains the Certificate of Commencement of Business.
• No cheque book can be issued in such account.

40 | P a g e
 • No drawl can be allowed until the company obtains certificate to commence
business.
• However, bank can transfer the amount or part thereof for investing in short term
deposits.

WINDING UP OF COMPANY
• Winding up or Liquidation is the process by which a company is dissolved.
• Winding up can be (I) voluntary, either by shareholders or by creditors (ii)
compulsory by Court, or (iii) through Court supervision.,
• On the appointment of a liquidator, all the powers of Board of Directors cease to
operate except when it is otherwise permitted in general body meeting resolution.
• In case of death/ resignation of the liquidator the company in general body

:34
meeting appoints the next liquidator.
24 7
Order of payment on debts
21
-20 52

• In case of winding up, the debts of the company are paid in the following order (I)
Workmen dues, (ii) Secured Creditors, (iii) Cost and charges of winding up, (iv)
-11 216

Preferential debts (taxes etc.) (v) Floating charges, (vi) Unsecured Creditors.
• The unsecured Creditors are paid paripassu their claim.
5

Difference between a Pvt.Ltd. Company & a Public Ltd. Company

S.No. Points of Difference PVT. LTD. CO. PUBLIC LTD. CO.

30

1. Minimum number of 2 7
shareholders
2. Maximum number of 200 No limit
shareholders
3. Transfer of share Restricted Freely
4. Invitation to public for shares & Prohibited Permitted
debentures
and fixed deposits
5. Certificate of commencement of Not required Not Required(
Business Removed in the
companies
amendment act,

41 | P a g e
 2015)
6. Minimum Directors 2 3
7. Minimum paid up capital Not Required ( Not Required (
Companies Companies
amendment act , amendment act,
2015 removes the 2015 removes the
words ) words )

:34
24 7
21
-20 52
-11 216
5
30

42 | P a g e
KNOW YOUR CUSTOMER & ANTI MONEY LAUNDERING GUIDELINES

OPERATIONS DIVISION (KYC SECTION) CIRCULAR NO. 05/2024

Reserve Bank of India, has updated its Master Direction –Know Your Customer
(KYC)Direction, 2016 on 17.10.2023. Accordingly, necessary modifications in Part-I
Policy andPart-II Operational Guidelines have been made and revised KYC Policy
has beenapproved by the Audit Committee of Executives in its meeting held on 1st
November 2023.

Consolidated KYC Policy (Part I & Part II) for FY 2024-2025 is as :

Objective &Purpose:

India, being a member of Financial Action Task Force (FATF) is committed to upholding
measures to protect the integrity of international financial system. To prevent Bank from
being used as a channel for Money Laundering (ML)/ Terrorist Financing (TF) and to

:34
ensure the integrity and stability of the financial system, efforts are continuously being
made both internationally and nationally, by way of various rules and regulations. The
KYC Policy has been framed to develop a strong mechanism for achieving the following
24 7
objectives:
21
-20 52

I. To prevent Bank from being used intentionally or unintentionally, by criminal

elements for Money Laundering or Terrorist Financing activities. KYC procedures
-11 216

also enable the Bank to know/understand their customers and their financial
dealings better, which in turn helps it to manage the associatedrisks prudently.
II. To enable the Bank to comply with all the legal and regulatory obligations in
respect of KYC norms / AML standards / CFT measures / Bank’s Obligation under
5

PMLA, 2002 and to cooperate with various government bodies dealing with
related issues.
III. The purpose of KYC policy is to put in place customer identification procedures for
opening of accounts and monitoring transactions in the accounts for detection of
transactions of suspicious nature for the purpose of reporting to Financial
30

Intelligence Unit-India [FIU-IND] in terms of the recommendations made by

Financial Action Task Force (FATF) and the paper issued on Customer Due
Diligence (CDD) for banks by the Basel Committee on Banking Supervision
(BCBS) on AML standards and on CFT measures.
IV. For this Policy, the term ‘Money Laundering’ would also cover financial
transactions where the end-use of funds is for financing terrorism, irrespective
of the source of funds.
The KYC policy includes following key elements:

(a) Customer Acceptance Policy (CAP);

(b) Risk Management;
(c) Customer Identification Procedures (CIP); and
(d) Monitoring of Transactions
(e) Money Laundering and Terrorist Financing Risk Assessment by Bank
(f) Bank shall apply a Risk Based Approach (RBA) for mitigation and management of
the risks
43 | P a g e
 Customer Acceptance Policy

Bank’s Customer Acceptance Policy (CAP) lays down the guidelines for acceptance of
customers.
It is to be ensured as under:-
(i) No account is opened in anonymous or fictitious / benami name.
(ii) No account is opened where the Bank is unable to apply appropriate
Customer Due Diligence (CDD) measures, either due to non-cooperation of
the customer or non-reliability of the documents / information furnished by
the customer.
(iii) No transaction or account based relationship is undertaken without
following the CDD procedure.
(iv) The mandatory information sought for KYC purpose while opening an
account and during the periodic updation, is specified.
(v) Additional information, where such information requirement has not been
specified in KYC Policy of the Bank, is obtained with the explicit consent of
the customer.

:34
(vi) The CDD procedure is to be applied at the UCIC level. Thus, if an existing
KYC compliant customer of Bank desires to open another account with the
same Bank, there shall be no need for a fresh CDD exercise.
24 7
(vii) CDD Procedure is followed for all the joint account holders, while opening a
21
joint account.
-20 52

(viii) Circumstances in which, a customer is permitted to act on behalf of another

person / entity, are clearly spelt out.
(ix) No account is opened where identity of the customer matches with any
-11 216

person or entity, whose name appears in the sanctions lists indicated in

Chapter IX of the Master Direction of RBI last updated upto 04.05.2023.
(x) Where Permanent Account Number (PAN) is obtained, the same shall be
verified from the verification facility of the issuing authority.
5

(xi) Where an equivalent e-document is obtained from the customer, the digital
signature has to be verified as per the provisions of the Information
Technology Act, 2000 (21 of 2000).
(xii) Where Goods & Services Tax (GST) details are available, the GST number
shall be verified from the search/ verification facility of the issuing authority.
30

It is to be ensured that the Customer Acceptance Policy shall not result in denial of
banking / financial facility to members of the general public, especially those, who
are financially or socially disadvantaged.
Where a suspicion of money laundering or terrorist financing, is formed and
reasonably believed that performing the CDD process will tip-off the customer,
CDD process shall not be pursued, instead it shall be reported to Centralised AML
Cell for onward submission of STR to FIU –IND.

Risk Management,

For Risk Management, Bank has adopted risk based approach which includes the
following:

(i) Customers shall be categorized as low, medium and high risk category,
based on the assessment and risk perception of the Bank.
44 | P a g e
 (ii) Broad principles may be laid down by the Bank for risk-categorization of
customers.
(iii) Risk categorization shall be undertaken based on parameters such as
customer's identity, social / financial status, nature of business activity, and
information about the clients' business and their location, geographical risk
covering customers as well as transactions, type of products/services
offered, delivery channel used for delivery of products/services, types of
transaction undertaken—cash, cheque/ monetary instruments, wire
transfers, forex transactions, etc. While considering customer's identity,
the ability to confirm identity documents through online or other services
offered by issuing authorities may also be factored in.
(iv) The risk categorization of a customer and the specific reasons for such
categorization shall be kept confidential and shall not be revealed to the
customer to avoid tipping off the customer.

It is hereby specified that the various other information collected from different
categories of customers, relating to the perceived risk, is non-intrusive. Lists such as

:34
FATF Public Statement, the reports and guidance notes on KYC / AML issued by the
Indian Banks Association (IBA), and other agencies, etc., have been used in risk
assessment.
24 7
21
Customer Identification Procedure (CIP)
-20 52

Customer Identification Procedure means undertaking client due diligence

-11 216

measures including identifying and verifying the customer and the beneficial owner.
Bank to undertake identification of customers in the following cases:

(i) Commencement of an account-based relationship with the customer.

(ii) Carrying out any international money transfer operations for a person who is
5

not an account holder of the Bank.

(iii) When there is a doubt about the authenticity or adequacy of the customer
identification data (CID) it has obtained.
(iv) Selling third party products as agent, selling its own products, payment of
dues of credit cards / sale and reloading of prepaid / travel cards and any
30

other product for more than rupees fifty thousand.

(v) Carrying out transactions for a non-account based customer, that is a walk-
in customer, where the amount involved is equal to or exceeds rupees fifty
thousand, whether conducted as a single transaction or several
transactions that appear to be connected.
(vi) When Bank has reason to believe that a customer (account-based or
walkin) is intentionally structuring a transaction into a series of transactions
below the threshold of rupees fifty thousand.
(vii) It is to be ensured that introduction is not to be sought while opening
accounts.

For the purpose of verifying the identity of customers at the time of commencement of
an account-based relationship, Bank, will at its option, rely on customer due diligence
done by a third party, subject to the following conditions:

45 | P a g e
 (i) Records or the information of the customer due diligence carried out by the
third party is obtained within two days from the third party or from the Central
KYC Records Registry.
(ii) Adequate steps are taken by Bank to satisfy itself that copies of
identification data and other relevant documentation relating to the
customer due diligence requirements shall be made available from the third
party upon request without delay.
(iii) The third party is regulated, supervised or monitored for, and has measures
in place for, compliance with customer due diligence and record-keeping
requirements in line with the requirements and obligations under the PML
Act.
(iv) The third party shall not be based in a country or jurisdiction assessed as
high risk.
(v) The ultimate responsibility for customer due diligence and undertaking
enhanced due diligence measures, as applicable, will be with the Bank

:34
Monitoring Of Transactions
24 7
Bank shall undertake on-going due diligence of customers to ensure that their
21
transactions are consistent with their knowledge about the customers, customers'
-20 52

business and risk profile; and the source of funds.

Bank shall carry out ‘Money Laundering (ML) and Terrorist Financing (TF) Risk
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i.
Assessment’ exercise periodically to identify, assess and take effective
measures to mitigate its money laundering and terrorist financing risk for
clients, countries or geographic areas, products, services, transactions or
delivery channels, etc. The assessment process should consider all the
5

relevant risk factors before determining the level of overall risk and the
appropriate level and type of mitigation to be applied. While preparing the
internal risk assessment, Bank shall take cognizance of the overall
sectorspecific vulnerabilities, if any, that the regulator/supervisor may share
with Bank from time to time.
30

ii. The risk assessment by the Bank shall be properly documented and be
proportionate to the nature, size, geographical presence, complexity of
activities/structure, etc. of the Bank. Further, the periodicity of risk assessment
exercise shall be annually.
iii. Integrated Risk Management Division shall carry out the above said Risk
Assessment exercise on annual basis. The outcome of the exercise shall be
put up to the Risk Management Committee of the Board and should be
available to competent authorities and self-regulating bodies. Bank shall apply
a Risk Based Approach (RBA) for mitigation and management of the identified
risk and should have Board approved policies, controls and procedures in this
regard. Further, Bank shall monitor the implementation of the controls and
enhance them if necessary.
iv. The respective Process Owner Divisions will review the Controls related to KYC
and AML existing / introduced in the area of their operations and its
effectiveness in controlling the risk and minimizing data inconsistencies, if any
and take corrective action. This process will be undertaken at least once a
year. Special emphasis will be given on Risk Based approach to KYC-AML
46 | P a g e
 Risk Based Approach (RBA)

Bank shall apply a Risk Based Approach (RBA) for mitigation and management
of the risks (identified on their own or through national risk assessment) and
should have Board approved policies, controls and procedures in this regard.
Bank shall implement a CDD programme, having regard to the ML/TF risks
identified and the size of business. Further, Bank shall monitor the
implementation of the controls and enhance them if necessary.

COMPLIANCE OF KYC POLICY

Compliance of KYC Policy of the Bank, as advised in RBI’s Master Directions on

KYC will be ensured through:-

a) DESIGNATED DIRECTOR

:34
b) PRINCIPAL OFFICER 24 7
(c) COMPLIANCE MECHANISM 21
-20 52

REPORTING REQUIREMENTS TO FINANCIAL INTELLIGENCE UNIT – INDIA

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In terms of Rule 3 of the Prevention of Money Laundering (Maintenance of Records)

Rules, 2005 and in terms of Rule 7 thereof, the following reports shall be furnished to
Financial Intelligence Unit-India as per guidelines prescribed by RBI / FIU as
applicable and within the timelines specified.
5

(i) Cash Transaction Report [CTR].

(ii) Suspicious Transactions Report [STR]
(iii) Counterfeit Currency Report [CCR]
(iv) Non ProfitOrganisations Transaction report [NTR]
(v) Cross-border Wire Transfer Report [CWTR]
30

OTHER ASPECTS

Other KYC / AML Guidelines to be followed while onboarding of customers such as

customer due diligence (CDD) procedure, identification of Beneficial Owner, periodic
updation of KYC, transaction monitoring, etc., are given in Part-II Operational
Guidelines of KYC Policy) such as: -

(i) CDD Procedure for Individuals, Sole Proprietary firms, Legal Entities (ii)
(ii) Identification of Beneficial Owner (iii)
(iii) On-going Due Diligence (iv)
(iv) Enhanced and Simplified Due Diligence Procedure
(v) Record Management
(vi) Internal Control System
(vii) Requirements / Obligations under International Agreements
(viii) Other Instructions

47 | P a g e
 Part II–OPERATIONAL GUIDELINES

Part-II operational guidelines for KYC Policy describs definitions, customer due
diligence procedure, record management, reporting requirements to FIU-IND,
obligations under international agreements and other instructions

1) Definitions related to Aadhaar number, Act and Rules, Authentication, Beneficial

Owner (BO), Certified Copy of OVD, Central KYC Records Registry, Designated
Director, Digital KYC, Digital Signature, Equivalent e-document, Group, Know Your
Client (KYC) Identifier, Non-profit organisations, Officially valid document, Offline
verification, Person,Politically Exposed Persons, Principal Officer (PO), Suspicious
transaction etc.

2) Customer Due Diligence (CDD) procedure

CDD Procedure in case of individuals-For undertaking CDD, concerned offices

shall obtain the following from an individual while establishing an account-based

:34
relationship or while dealing with the individual who is a beneficial owner, authorised
signatory or the power of attorney holder related to any legal entity.
24 7
In order to verify the authenticity of the KYC document, the authorized official shall
21
online verify Officially Valid Document (OVD) & PAN card details furnished by the
-20 52

customer from central authentic database, wherever available, in public domain. PAN
Card and Voter Identity Card, wherever obtained, be verified on-line through the
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following websites and a print of on-line verification of the said document be held on
record with the relevant AOF:

Name of Documents Website / Link

Finacle Home Page → Non CBS Applications
5

PAN Card
→GBD → On line PAN verification
Voter Identity Card w
www.nvsp.in

(National Voters Service Portal)

30

3) Accounts opened using Aadhaar OTP based e-KYC, in non-face to face mode.

4) Bank may undertake Video based Customer Identification Process (VCIP)

5) Small Accounts

6) Transfer of Account from one branch to another branch

7) CDD Measures for Sole Proprietary firms-For opening an account in the name of a
sole proprietary firm, CDD of the individual (proprietor) shall be carried out.

8) Business/ Activity proof for Sole Proprietary firms

9) CDD Measures for Legal Entities-

48 | P a g e
For opening an account of a company/ partnership frms/ trust/unincorporated
association or a body of individuals/ customer who is judicial person/ HUF

(Documents need to be obtained are available in (KYC Policy for FY 2024-2025,

OPERATIONS DIVISION (KYC SECTION) CIRCULAR NO. 05/2024)

10) Identification of Beneficial Owner

11) On-going Due Diligence

12) Transaction for monitoring and extent of monitoring

13) Updation / periodic updation-

HIGH RISK – 2 YEARS.

MEDIUM RISK- 8 YEARS.

:34
LOW RISK- 10 YEARS.

In case of no change in the KYC information, a self-declaration from the customer in

this regard shall be obtained through customer’s email-id registered with the Bank,
24 7
21
customer’s mobile number registered with the Bank, ATMs, digital channels (such as
-20 52

online banking / mobile banking) letter etc.

In case of change only in the address details of the customer, a self-declaration of the
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new address shall be obtained from the customer through customer’s email-id
registered with the Bank, digital channels (such as online banking / internet banking,
mobile application of Bank), letter, etc., and the declared address shall be verified
through positive confirmation within two months, by means such as address
5

verification letter, contact point verification, deliverables, etc

14) Freezing and closure of Non- KYC Compliance Accounts

Provided that before temporarily ceasing operations for an account, the client is to be
30

given an accessible notice and a reasonable opportunity to be heard. However,

operations in accounts of customers who are unable to provide Permanent Account
Number or the equivalent e-document thereof or Form No. 60 owing to injury, illness or
infirmity on account of old age or otherwise, and such like causes, may allowed to be
continued. The Branch Head shall allow such relaxation for continuation of operations
in such accounts till the time PAN or the equivalent edocument thereof or Form 60 is
obtained from the customer for which an officer from the branch will be deputed to
personally visit the customer for obtaining the PAN or the equivalent e-document
thereof or Form 60. However, the Branch Head shall ensure that such accounts are
subject to enhanced monitoring

For the purpose of this Section, “temporary ceasing of operations” in relation an

account shall mean the temporary suspension of all transactions or activities in
relation to that account by the Bank till such time the customer complies with the
provisions of this Section. In case of asset accounts such as loan accounts, for the
purpose of ceasing the operation in the account, only credits shall be allowed.

49 | P a g e
Enhanced and Simplified Due Diligence Procedure

Enhanced DueDiligence

Enhanced Due Diligence (EDD) for non-face-to-face customer on-boarding (other

than customer on-boarding in terms of Section 3).Non-face-to-face onboarding
facilitates the REs to establish relationship with the customer without meeting the
customer physically or through V-CIP. Such non-face-to-face modes for the purpose
of this Section includes use of digital channels such as CKYCR, DigiLocker,
equivalent e-document, etc., and non-digital modes such as obtaining copy of OVD
certified by additional certifying authorities as allowed for NRIs and PIOs.

Following EDD measures shall be undertaken by REs for non-face-to-face customer

on-boarding (other than customer on-boarding in terms of Section 3):

(a) In case Bank has introduced the process of V-CIP, the same shall be provided
as the first option to the customer for remote on-boarding. It is reiterated that

:34
processes complying with prescribed standards and procedures for V-CIP shall
be treated on par with face-to-face CIP for the purpose of this KYC Policy.
(b) In order to prevent frauds, alternate mobile numbers shall not be linked post
24 7
CDD with such accounts for transaction OTP, transaction updates, etc.
21
Transactions shall be permitted only from the mobile number used for account
-20 52

opening. Bank shall have a Board approved policy delineating a robust process
of due diligence for dealing with requests for change of registered mobile
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number.
(c) Apart from obtaining the current address proof, concerned official shall verify the
current address through positive confirmation before allowing operations in the
account. Positive confirmation may be carried out by means such as address
verification letter, contact point verification, deliverables, etc.
5

(d) PAN shall be obtained from the customer and it shall be verified from the
verification facility of the issuing authority.
(e) First transaction in such accounts shall be a credit from existing KYC-complied
bank account of the customer.
(f) Such customers shall be categorized as high-risk customers and accounts
30

opened in non-face to face mode shall be subjected to enhanced monitoring

until the identity of the customer is verified in face-to-face manner or through
V-CIP.

Accounts of Politically Exposed Persons(PEPs)

The Branch/offices shall have the option of establishing a relationship with PEPs
provided that:

i. Sufficient information including information about the sources of funds

accounts of family members and close relatives is gathered on the PEP;
ii. The identity of the person shall have been verified before accepting the PEP as
a customer;
iii. The decision to open an account for a PEP is taken at a senior level, i.e. at the
level of Chief manager and above, in accordance with the Bank' Customer
Acceptance Policy;
iv. All such accounts are subjected to enhanced monitoring on an on-going basis;
50 | P a g e
 v. In the event of an existing customer or the beneficial owner of an existing
account subsequently becoming a PEP, senior management's approval i.e.
Chief Manager and above is obtained to continue the business relationship;
vi. The CDD measures as applicable to PEPs including enhanced monitoring on
an on-going basis

These instructions shall also be applicable to accounts where a PEP is the beneficial
owner.

Simplified norms for Self Help Groups(SHGs)

a. CDD of all the members of SHG shall not be required while opening savings bank
account of SHG.

b. CDD of all the office bearers shall suffice.

c.Customer Due Diligence (CDD) of all the members of SHG may be undertaken at the

:34
time of credit linking of SHGs.

Reports to be furnished to Financial Intelligence Unit –India.

24 7
•
21
Cash Transaction Report (CTR).
-20 52

• Suspicious Transaction Reports(STR)

• Counterfeit Currency Report(CCR)
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• Non ProfitOrganisations Transaction report (NTR)

• Cross-border Wire Transfer Report (CWTR)
5

CDD Procedure and sharing KYC information with Central KYC Records
Registry (CKYCR)

• Bank shall capture the KYC information for sharing with the CKYCR in the
30

manner mentioned in the Rules, as required by the revised KYC templates

prepared for 'individuals' and 'Legal Entities' as the case may be.
• Government of India has authorised the Central Registry of Securitisation
Asset Reconstruction and Security Interest of India (CERSAI), to act as, and to
perform the functions of the CKYCR vide Gazette Notification No. S.O. 3183(E)
dated November 26, 2015.
• The KYC data / documents pertaining to all new individual accounts opened on
or after January 1, 2017 have to be invariably uploaded with CERSAI in terms
of the provisions of the Prevention of Money Laundering (Maintenance of
Records) Rules, 2005 within ten days of opening theaccounts.

Reporting requirement under Foreign Account Tax Compliance Act (FATCA)

and Common Reporting Standards (CRS)

Under FATCA and CRS, Bank shall adhere to the provisions of Income Tax Rules
114F, 114G and 114H and determine whether they are a Reporting Financial
51 | P a g e
Institution as defined in Income Tax Rule 114F and if so, shall take following steps for
complying with the reportingrequirements:

Register on the related e-filing portal of Income Tax Department as Reporting

Financial Institutions at the linkhh
ttps://incometaxindiaefiling.gov.in/post login -

-> My Account --> Register as Reporting Financial Institution,

Submit online reports by using the digital signature of the 'Designated Director' by
either uploading the Form 61B or 'NIL' report, for which, the scheme prepared by
Central Board of Direct Taxes (CBDT) shall be referred to.

Selling Third partyproducts

Bank acting as agents while selling third party products as per regulations in force
from time to time shall comply with the following aspects for the purpose of these
directions:

:34
• The identity and address of the walk-in customer shall be verified for
transactions above rupees fifty thousand as required under Section 13(e) of
24 7
•
theseDirections. 21
Transaction details of sale of third party products and related records shall be
-20 52

maintained as prescribed in Chapter VII Section39.

• AML software capable of capturing, generating and analyzing alerts for the
-11 216

purpose of filing CTR / STR in respect of transactions relating to third party

products with customers including walk-in customers shall beavailable.
• Transactions involving rupees fifty thousand and above shall be undertaken
onlybyDebit to customers' account or against cheques;andObtaining and
5

verifying the PAN given by the account based as well as walk-in customers.

Officially Valid Documents (OVDs)

30

The Government of India has notified six documents or its equivalent e- documents as
'Officially Valid Documents (OVDs) for the purpose of producing proof of identity of
individual customers.

These six documents are the

1) Passport,
2) Driving license,
3) Proof of possession of Aadhaar number,
4) Voter's Identity Card issued by the Election Commission of India,
5) Job card issued by NREGA duly signed by an officer of the State Government
and
6) Letter issued by the National Population Register containing details of name
andaddress.

52 | P a g e
What is e-KYC? How does e-KYC work?

E-KYC refers to electronic KYC. E-KYC is possible only for those who have Aadhaar
number or proof of possession of Aadhaar. While using e-KYC service, customer has
to authorise the Unique Identification Authority of India (UIDAI), by explicit consent, to
release his/her identity/address through biometric authentication to the bank
branches/business correspondent (BC). The UIDAI then transfers his/her data
comprising name, age, gender, and photograph of the individual, electronically to the
bank/BC. Information thus provided through e-KYC process is permitted to be treated
as an 'Officially Valid Document’ under PML Rules and is a valid process for
KYCverification.

“UCIC” means Unique Customer Identification Code, i.e., unique customer-ID allotted
to individual customers while entering into new relationships as well as to the existing
customers. All the accounts of an individual customer will be opened under his / her

:34
UCIC.

“Video based Customer Identification Process (V-CIP)”: a method of customer

24 7
identification by an official of the Bank by undertaking seamless, secure, real-time,
21
consent based audio-visual interaction with the customer to obtain identification
-20 52

information including the documents required for CDD purpose, and to ascertain the
veracity of the information furnished by the customer. Such process shall be treated as
-11 216

face-to-face process for the purpose of this KYCPolicy.

30 5

53 | P a g e
BANKING OMBUDSMAN SCHEME, 2021 (CCC 17/2021 & Customer Care 04/2023)

Reserve Bank of India, vide Notification No. CEPD. PRD. No.S873/13.01.001/202122

dated 12.11.2021, has issued Integrated Ombudsman Scheme, repealing the Banking
Ombudsman Scheme, 2006, the Ombudsman Scheme for Non-Banking Financial
Companies, 2018 and the Ombudsman Scheme for Digital Transactions, 2019.

The Integrated Ombudsman Scheme aims to improve the Grievance Redress

Mechanism for resolving customer complaints against entities such as Banks, NBFCs
and Payment Service Operators regulated by the RBI moving towards ‘One NationOne
Ombudsman’ theme.

OBJECTIVE: The Integrated Ombudsman Scheme aims to improve the Grievance

Redress Mechanism for resolving customer complaints against entities such as Banks,
NBFCs and Payment Service Operators regulated by the RBI moving towards ‘One
Nation-One Ombudsman’ theme.

:34
Appointment and Tenure of Ombudsman and Deputy Ombudsman
(1) The Reserve Bank may appoint one or more of its officers as Ombudsman and
Deputy Ombudsman, to carry out the functions entrusted to them under the Scheme.
24 7
(2) The appointment of Ombudsman or the Deputy Ombudsman, as the case may be,
21
shall be made for a period not exceeding three years at a time.
-20 52

LOCATION OF OFFICE AND TEMPORARY HEADQUARTERS

(1) The offices of the Ombudsman shall be at such places as may be specified by the
-11 216

Reserve Bank.
(2) In order to expedite disposal of the complaints, the Ombudsman may hold sittings at
such places and in such manner as may be considered necessary and proper in respect
of a complaint.
5

Establishment of a Centralised Receipt and Processing Centre

• The Reserve Bank shall establish the Centralised Receipt and Processing
Centre at any place as may be decided by it to receive the complaints filed
under the Scheme and process them.
30

• The complaints under the Scheme made online shall be registered on the portal
(https://cms.rbi.org.in). Complaints in electronic mode (E-mail) and physical
form, including postal and hand-delivered complaints, shall be addressed and
sent to the place where the Centralised Receipt and Processing Centre of the
Reserve Bank is established, for scrutiny and initial processing.
• Provided that the complaints that are received directly in any of the offices of the
Reserve Bank shall be forwarded to the Centralised Receipt and Processing
Centre for further action.

Grounds of Complaint
Any customer aggrieved by an act or omission of a Regulated Entity resulting in
deficiency in service may file a complaint under the Scheme personally or through an
authorised representative as defined under clause 3(1)(c).
.

54 | P a g e
PROCEDURE FOR FILING COMPLAINT
(1) The complaint may be lodged online through the portal designed for the purpose
(https://cms.rbi.org.in).
(2) The complaint may also be submitted through electronic or physical mode to the
Centralised Receipt and Processing Centre as notified by the Reserve Bank. The
complaint, if submitted in physical form, shall be duly signed by the complainant or by the
authorised representative. The complaint shall be submitted in electronic or physical
mode in such format and containing such information as may be specified by Reserve
Bank.

INTERNAL OMBUDSMAN DIRECTIONS 2003 (Reference: CUSTOMER CARE

CENTRE CIRCULAR NO.06/2024)

The existing Internal Ombudsman (IO) Scheme has been revised vide RBI
Master Direction - Reserve Bank of India (Internal Ombudsman Scheme for

:34
Regulated Entities) Directions, 2023.

These Directions shall be called the Reserve Bank of India (Internal Ombudsman)
24 7
Directions, 2023.
21
-20 52

These Directions shall come into effect from December 29, 2023 and shall apply to the
whole of Punjab National Bank.
-11 216

Bank has to ensure that the complaints of the customers are redressed atthe level of
the bank itself by an authority placed at the highest level of bank’s grievance redressal
mechanism so as to minimize the escalation of complaints to other forums for
redressal. Thus Bank has to escalate all such cases which are rejected or any partial
5

relief is provided to the complainant, to Internal Ombudsman for final decision.

On the recommendations of the Damodaran Committee, Bank has appointed Chief

Customer Service Officer (CCSO) to act as Internal Ombudsman (IO) with the objective
that the minimum number of cases gets escalated to the Banking Ombudsman (BO).
30

Appointment
• The Internal Ombudsman shall either be a retired or serving officer, in the rank
equivalent to a General Manager, minimum experience of seven years.
• He/ She shall previously not have been employed, nor presently be employed, by
the regulated entity or the regulated entity’s related parties.
• Shall not be over 70 years of age before the completion of the tenure.

Regulated entity may appoint more than one Internal Ombudsman depending on the
volume of complaints received by them to ensure continuity of operations during the
absence of the Internal Ombudsman.

Tenure: 3-5 years, without any extension in tenure or re-appointment.IO cannot be

removed in between without approval of RBI.

55 | P a g e
CONSUMER PROTECTION ACT 2019

Bankinghas been included in the definition of service. As such, in respect of any

service(s), which may be provided by the bank, the ‘customer’, as a ‘consumer’ under the
Act, may file a complaint for deficiency in service coming within the definition as above
mentioned

REDRESSAL AGENCIES:
In terms of the provisions of the Act, following agencies have been established for
redressal of the consumer dispute:
1. District Forum (Consumer Disputes Redressal Forum at district levels)
2. State Commission (Consumer Disputes Redressal Commission at statelevels)
3. National Commission (National Consumer Disputes Redressal Commission

LIMITATION FOR FILING OF COMPLAINT:

As per the Act, the limitation period for filing complaint before the District Forum, State

:34
Commission or National Commission is two years from the date on which cause of
action has arisen.
S.NO. FORUM PECUNIARY JURISDICTION
24 7
1. District Forum Complaints in which the value of the services and the
21
compensation, if any, claimed does not exceed Rs.50 lac
-20 52

2. State Complaints in which the value of the services and the

Commission compensation, if any, claimed is above Rs. 50 lacbut does not
-11 216

exceed Rs.2 crore

3. National Complaints in which the value of service and the compensation,
Commission if any claimed, is above Rs.2 Crore.
5

PENALTY FOR NON-COMPLIANCE OF ORDERS OF FORUM/COMMISSION:

As per Consumer Protection Act 2019, if any person fails or omits to comply with any
order made by a Forum/Commission, he shall be punishable with imprisonment for a
term, which shall not be less than one month, but may extend to three years, or with
fine, which shall not be less than Rs.25000/-, but may extend to Rs.100000/-, or with
30

both.

All the offences under the Act are tried summarily by District Forum or the State
commission or the National Commission, as the case may be, who, for the trial of such
offences, has the powers of a Judicial Magistrate of the first class.

Bank provides variety of services to its customers. Delay and deficiency in service have
to be avoided. Every endeavour be made to redress the grievances of the customers.
Complaints/grievances of the customers be attended to promptly and if the bank has
rightly performed its services, proper explanation be given and the customer be
convinced. If the customer is not convinced and still aggrieved, he may seek remedy
against the bank by filing complaints before the Banking Ombudsman, Consumer
Disputes Redressal forums/Agencies, Courts etc.

56 | P a g e
RIGHT TO INFORMATION ACT 2005
(Reference: Law Div. Cir No.11/Law/2020 dated 26.03.2020)

The Right to Information Act, 2005 (RTI Act), is applicable to the whole of India.
Right to Information Act, 2005 has been enacted through legislation passed by
Parliament in order to provide for setting out a practical regime of right to information
for citizens to secure access to information under the control of public authorities, in
order to promote transparency and accountability in the working of every public
authority the constitution of a Central Information Commission and State Information
Commissions and for matters connected therewith or incidental thereto.

Informationmeans any material in any form including records, documents, memos,

e-mails, opinions, advices, press releases, circulars, orders, logbooks, contracts,
reports, papers, samples, models, data material held in any electronic form and
information relating to any private body which can be accessed by a public authority

:34
under any other law for the time being in force.

Subject to the provisions of this Act, all citizens shall have the right to information and
24 7
have a right to seek such information from a public authority which is held by the
21
public authority or which is held under its control.
-20 52

This right includes:

-11 216

I. Inspection of work, documents, records.

II. Taking notes, extracts, or certified copies of documents or records
III. Taking certified samples of material.
IV. Obtaining information in form of printouts, diskettes, floppies, tapes, video cassettes
5

or in any other electronic mode or through printouts

The Act makes it obligatory for any public authority to maintain all its records duly
catalogued and indexed, as per the record retention schedule decided by the public
authority. It is also obligatory that the Public Authority suo moto publishes certain
30

information at regular intervals, etc.

The Bank, being a corporate body established under law made by the Central
Government, is also a Public Authority. Bank’s disclosures are available on the RTI
link of the Bank’s websites https://www.pnbindia.in or as notified from time to time by
corporate office.

Exemptions from disclosure of Information:

Some of categories of information are exempted from disclosures, such as:
1) Disclosure of which would prejudicially affect the sovereignty and integrity of
India, the security, strategic, scientific or economic interests of the State,
relation with foreign State or lead to incitement of an offence

57 | P a g e
 2) Which has been expressly forbidden to be published by any court of law or
tribunal or the disclosure of which may constitute contempt of court
3) Which would impede the process of investigation or apprehension or
prosecution of offenders etc?

The Bank has appointed Central Public Information Officers (CPIO) at each Circle
Office leveland the Appellate Authorities (AA) at Head Office. An applicant making
request for information is not required to give any reason for requesting the
information or any other personal details except those that may be necessary for
contacting him. The application can be in English or Hindi or in the Official Language
of the area in which the application is being made. Also, as per notification dated
31.07.2012 of Ministry of Personnel, Public Grievances and Pensions (Department of
Personnel and Training) an Application under section 6 of the RTI Act, shall be
accompanied by a fee of rupees ten and shall ordinarily not contain more than five

:34
hundred words, excluding annexures, containing address of CPIO and that of the
applicant. Provided that no application shall be rejected only on the ground that it
contains more than five hundred words. No fees will be charged from people living
24 7
below the poverty line provided a copy of the certificate issued by the appropriate
21
Government is attached. Additional fee - as cost of information can be charged
-20 52

on actual basis or as permitted to be charged in the act. The fees can be paid in
cash, by demand draft or cash order payable to accounts officer public authority or
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by electronic means if the facility is available.

Timeline for supply of information:

5

Sr. Situation Time limit for disposing of

applications
No.
1. Supply of information in normal 30 days
30

course
2. Supply of information if it 48 hours
concerns the life or liberty of a
person
3. Supply of information if the 05 days shall be added to the time
application is received through period indicated at Sr. No. 1 and 2.
CAPIO
4. Supply of information if (a) Within 30 days of the receipt of
application / request is received the application by the concerned
after transfer from another public public
authority:
(a) In normal course

58 | P a g e
 (b) In case the information (b) Within 48 hours of receipt of the
concerns the life or liberty of a application by the concerned public
person. authority
5. Supply of information if it relates Should be provided after following
to third party and the third party the procedure given in Section 11 of
has treated it as confidential. the RTI Act
6. Supply of information where the The period intervening between
applicant is asked to pay informing the applicant about
additional fee. additional fee and the payment of fee
by the applicant shall be excluded for
calculating the period of reply.

When an application is made to CPIO requesting for an information which is held by

:34
the CPIO of another Circle Office or the CPIO of another public authority, the CPIO to
whom such application is made shall transfer the same immediately preferably same
day if between CPIOs of same public authority OR within five days from the receipt of
24 7
21
the application if it is CPIO of different public authority.Please note that our Bank as
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a whole is one Public Authority.

APPEALS: The first appeal may be made within 30 days from the date of expiry of
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the prescribed period or from the receipt of communication from the CPIO. The
appeal should be disposed of within 30 days of receipt of the appeal. In exceptional
cases, the Appellate Authority may take 45 days for its disposal.
5

Second Appeal: If the applicant / appellant or the third party is not satisfied with
the decision of the CPIO and the Order of the First Appellate Authority he / she can
prefer a second appeal with the Central Information Commission (CIC), New Delhi.
30

Complaints: The Central Govt. has constituted Central Information Commission

(CIC) which may enquire into any complaint from any person about non-furnishing of
information or about non-response to the request for information etc. CIC will also
decide the 2nd appeal against the decision of the Appellate Authority.

The CIC, at the time of deciding any complaint or appeal, has power to impose
penalty of Rs.250/- per day up to a maximum of Rs.25,000/-, for:

I. Not accepting an application;

Ii. Delaying information release without reasonable cause;
Iii. Mala-fidely denying information;
Iv. Knowingly giving incomplete, incorrect, misleading information;
V. Destroying information that has been requested and
Vi. Obstructing furnishing of information in any manner
59 | P a g e
Compensation: CIC has the power to order the public authority to compensate the
complainant for any loss or other detriment suffered. Such compensation is payable
by the Public Authority to the appellant / complainant.

In the circumstances, it should be ensured that the bank’s records are maintained duly
catalogued and indexed so that information is readily available. Further if the CPIO
appointed/ designated by the bank seeks any information, all assistance be rendered to
the CPIO to enable him to respond to the application within the stipulated time. In
addition to above, CPIOs/AAs (Appellate Authorities) of the Bank are advised to go
through the CIC’s Website i.e. www.cic.gov.in in order to keep themselves abreast with
the latest decisions. This will help them to acquire acumen to give correct decisions in
the matters before them. They can also search the Website under the head “commercial
confidence”, “personal information”, “third party notice”, “fiduciary relationship” etc. To
peruse different decisions of CIC from time to time.

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5
30

60 | P a g e
CUSTOMER SERVICE &COMPLAINTS(Operation (Customer Care)
Customer service has great significance in the banking industry. The banking system in
India today has perhaps the largest outreach for delivery of financial services and is also
serving as an important conduit for delivery of financial services. While the coverage has
been expanding day by day, the quality and content of dispensation of customer service
has come under tremendous pressure.

COMPLAINT REGISTRATION
A customer may lodge complaint either in writing or through e-mail if he is not satisfied
with the services provided by the bank. All complaints will be recorded by the bank in a
database. The database, along with the acknowledgement letter and other
correspondence will be preserved at least for three years for future reference.
However, no action will be taken on anonymous /pseudonymous complaints and the
same will be filed as per guidelines issued by Central Vigilance Commission.

Arrangements for receiving complaints and suggestions are given hereunder:

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(i) Written complaints
(a) Complaint forms have been provided at all branches and also available at bank’s
website www.pnbindia.in under the link ‘Customer Care / Grievances’ on the home
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page. Complaint form must be given to the customer on demand by the
21
Branch Manager.
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(b) On submission of complaint, Branch Manager must give its acknowledgement to

the customer.
(c) Complaint Book in perforated form (Form 1013) should be available at all the
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branches. It should be provided to the customer on demand if he/she intends to

record his/her grievances therein.
(ii) Complaints over telephone
(a) The complaint may be lodged with the Chief-Host/Nodal Officer in Circle Office of
5

the concerned branch or to the Branch Manager over telephone. The name and
telephone number of Chief-Host/Nodal Officer of the concerned branch should be
displayed in the branches.
(b) The complaint received on telephone be handled with care and proper reply should
be given to the customer. This will prove helpful in establishing and maintaining
30

good relation with all concerned while enhancing image of the bank in the eyes of
public.
(c) Good manners on telephone go a long way in building up the image of caller and
that of his /her organisation.

(iii) Customer Relationship Centre (Contact Centre)

(a) A complaint can also be reported to our Customer Relationship Centre (Contact
Centre) on Toll Free Number 1800 1800, 1800 2021 or tolled number
0120-2490000, which is accessible 24 hours from landline as well as mobiles of
any telecom operator throughout India.
(b) All Circle Heads must ensure that the designated or
(c) Officer at the Circle Office / Branch Manager browse the link Contact Centre
at CBS homepage (Non CBS application→Customer Care -→Contact Centre) of
Finacle regularly to ascertain the status of complaints/Requests registered
against branches/Circle Offices, if any.

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 d) The resolution against the complaints should be updated in the respective column
so that the customer can be apprised about status of the complaint if he/she
contacts the Customer Relationship Centre subsequently

(iv)Complaints through email

Customer can submit complaint through e-mail on “[email protected]”. Complaints
received by e mail shall be acknowledged by e-mail. Circle Head to ensure that
e-mail addresses of the Nodal Officer and Code Compliance Officer of the Circle
have been provided at the branches under their jurisdiction.

On-line Complaint-cum-Feed-back KIOSKs are installed in every Circle Office/Zonal

Managers Office/HO buildings for lodging a complaint by the customers using Bank’s
website www.pnbindia.in.

Centralized Grievances Redressal Management System (CGRMS) is made available

to record complaints received online at Contact Centre, Head office, CircleOffices
and CRM enabled branches. Besides, the customers may directly lodge the

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complaints on CGRMS through Bank’s Website, Internet Banking Services and
Mobile Banking. As owner of the CGRMS, Customer Care Centre will be coordinating
with the CRM branches and circle offices regularly. Customer, who lodges the
complaint on CGRMS or access CGRMS through Bank’s website, internet
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21
service, Mobile Banking and Mobile App (we care). Will get automatic
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Acknowledgement of his complaint.

All feedbacks (positive as well as negative) received on social media platforms like
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Face Book, Twitter, LinkedIn & YouTube, etc. will be accessed and dealt with by a
team of officials at Customer Care Centre, HO, New Delhi.

(v) Request for Hot Listing of lost Debit card

5

In order to bring about uniformity of process and to ensure 24x7 availability of the
service, all requests for hot listing of debit cards are routed through contact centre at
following phone numbers:
Toll Free Number 1800 1800 or tolled number 0120-2490000, which is accessible 24
hours from landline as well as mobiles of any telecom operator throughout India.
30

As such, for customers as well as branches, the Contact centre shall be the single
Point of contact for this purpose.

(vi) Complaints relating to ATM failed transaction

Complaints relating to ATM failed transactions (where cash is not dispensed or short
dispensed although account is debited) are to be lodged at Toll Free Number 1800-
1800 or tolled number 0120-2490000 andon unavailability, at email-ID
[email protected] and obtain docket number for future reference.

(vii) Branches must properly guide customers to first lodge complaint with Customer
Care Centre (for IMPS complaints also). After completion of TAT if the complaint is
not resolved or customer is not satisfied with the resolution, escalation may be made
to ATM Cell. For details of TAT and mails for escalation to ATM Cell branches may
refer DBD circular no-12/2016. For IMPS TAT is 72 working hours from the date
of complaint.

(viii) Complaints of VIPs / VVIPs

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 Complaints relating to VIPs and VVIP references should be dealt with on top priority
basis. Where considered necessary, even officials may be deputed to furnish the
required information/report personally. Branches must send complete reply to their
Circle Offices /HO Divisions, well in time enabling the concerned Division to send
prompt and proper reply to the Government/ concerned VIP within the time
schedule laid down by the Banking Division, Ministry of Finance.

Redressal of Customer complaints and grievances:

1. Grievances related to attitudinal aspects

• Such complaints be handled courteously, sympathetically and above all swiftly.
• Misbehaviour/rude behaviour with customers be treated at Zero tolerance level
and immediate action is to be taken. Bank, under no circumstances, will tolerate
misbehaviour of any degree by our staff members.

2. Grievances relating to transactions / operations:

Primarily Branch is responsible for the resolution of complaints/grievances in this

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category. Branch would be responsible for ensuring rectification of entry / transaction or
satisfaction of customers. It is the foremost duty of the branch to see that the complaint is
resolved to the customer’s satisfaction and if he is not satisfied, then to provide him with
24 7
21
alternate avenues to escalate the issue.
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3. Grievances relating to technology related transactions

Considering customers’ expectations and lack of familiarity with alternate delivery
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channels (ATMs, Internet Banking, Credit Cards and Mobile Banking), the bank has
considered exclusive mechanism for redressal of grievances arising from use of these
channels. The contact details/e-mail address to be made available at branches.

Telephone number of Principal Nodal Officer and Contact Centre Toll Free numbers are
5

also printed on SF Passbook to help customers in case of any grievances.

After Root Cause Analysis of complaints, corrective measures are taken to avoid
recurrence of complaints and systemic issues emanating from complaints are taken up
with the owner divisions.
30

On the recommendations of the Damodaran Committee, Bank has appointed Chief

Customer Service Officer (CCSO) to act as Internal Ombudsman (IO) for ensuring that
the minimum number of cases gets escalated to the Banking Ombudsman (BO).
Prime objective of Internal Ombudsman Scheme is to ensure that customer’s confidence
in Internal Grievance Redressal Mechanism is strengthened.
Bank will internally escalate all cases to the Internal Ombudsman (IO) for final decision
where either the complaint is rejected or only partial relief is provided to the complainant.

If the complaints are not resolved within 30 days or in case the customer is not satisfied
with the service or redressal provided by the bank, he can also approach the Banking
Ombudsman (BO) located in State Capitals for redressal. The contact details of the BO
of the respective branch are on website and also displayed at each branch.

Grievances Redressal Mechanism:

Customers are requested to approach the Branch Manager in case of any grievances. If
not satisfied, they may escalate the issue to LEVEL-I (Circle Head)/ LEVEL II (Zonal
63 | P a g e
Manager)/ LEVEL III (GM, Head Office) on the address available on Comprehensive
Notice Board in branches and on Bank’s website www.pnbindia.in.

“The customers of overseas branches who have not been satisfied by the response of
Chief Executive, PNB Hong Kong / Chief Executive Officer, PNB, BO: DIFC, Dubai /
Branch Head, Overseas Banking unit, SEEPZ, Mumbai in respect of their
complaints/grievances, may escalate their issues to the General Manager, International
Banking Division, Head OfficeNew Delhi or at email address: [email protected].”
Contact detail of PNB‟s group entities, viz. PNBGILTS and PNB Housing Finance Ltd.
are provided at Bank’s website for resolution of customer grievances relating to these
entities.

Structure for Redressal at branch level:

• Any written complaint is instantly and promptly acknowledged.
• Ensure that the complaint register (PNB-640) is kept at prominent place in branch
which would make it possible for the customers to enter their complaints.
• Complaint Book in perforated form (PNB-1013 in triplicate) must be maintained.

:34
The first copy is to be retained by the Branch; second copy is for issuing instant
acknowledgement to the complainant and third copy to be sent to respective Circle
Office.
24 7
• Complaint / suggestion box should be placed at conspicuous place in the branch.
21
• Branches should maintain a separate Complaints Register for entering all the
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complaints/grievances received by them directly or through Head

Office/Government.
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• If staff manning the counter is unable to resolve a grievance, the BM should

intervene and try to resolve the issue.
• All complaints forwarded by the CMD/ED Secretariat should be redressed /
responded within next working day.
5

• Complaints relating to VIPs and VIP references should be dealt with on top priority
basis.
• Complaints which would require some time for examination of issues involved,
should be examined in detail. Branches should send interim response explaining
the reasons why more time is required and endeavour to send final response within
30

six weeks of receipt of complaint.

• The names of the officials displayed at the branches who can be contacted for
redressal of complaints should also include the name and other details of the
concerned Nodal Officer appointed under the Banking Ombudsman Scheme, 2006.

Structure for redressal at Circle Office level:

• Circle Head shall be the Nodal Officer at Circle Level and responsible for
implementation of good Customer Service at branches.
• By and large, complaints should be redressed within shortest possible time.
Whenever it is not possible and more cross checking is required, steps should be
taken to settle the matter within a reasonable time.
• Complaints, resolved within 24 hours, should be excluded from the number as per
RBI guidelines while submitting quarterly data of complaints to Customer Care
Centre HO.
• Circles should ensure that complaints which would require some time for
examination of issues involved, be got examined in detail and should send interim

64 | P a g e
 response explaining the reasons why more time is required and endeavour to send
final response within six weeks of receipt of complaint.
• Root Cause Analysis of each complaint should be done and corrective action be
taken to avoid recurrence of complaints.
• Circles should ensure that branches send an acknowledgement / response
instantly and promptly of any written complaint.
• Circle Heads should contact the aggrieved customers as and when necessary,
meet him personally with the Branch Manager, for ensuring timely redressal of the
complaint.
• The Complaints Register maintained by the branches should be scrutinized by
senior officer of the concerned Circle Office during periodical visit to the branches
and his/her observations/comments be recorded in the relative Visit Reports.
• All Circle Heads must ensure that the designated officer at Circle office/Branch
Manager browses the link contact centre at CBS homepage (Non-CBS
application Customer Care Contact Centre) of Finacle regularly to ascertain
the status of complaints/Requests registered against branches/Circle Offices, if
any.

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• Circle Head should ensure that e-mail addresses of the Nodal Officer and Code
Compliance Officer have been provided at the branches under their jurisdiction.
• Complaints forwarded by the CMD/ED Secretariat should be redressed /
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21
responded within next working day.
•
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Complaints of serious nature must be investigated immediately by deputing an

Officer from the concerned Circle Office/ZAO.
• Complaints relating to VIPs and VVIP references should be dealt with on top priority
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basis. Where considered necessary, even officials may be deputed to furnish the
required information/report personally.
• Whenever deficiencies are noticed, accountability should be fixed and suitable
action should be initiated against the erring employee.
5

Structure for redressal at Head Office level:

• A full-fledged Customer Care Centre is functioning at the Head Office overseen by
an independent General Manager.
• An acknowledgement should be sent to the customer immediately on receipt of the
30

complaint directly or through CMD / EDs, RBI, MOF, DPG and other sources. In
case where complaints received would require some time for examination, the
same will be informed to customer through an interim reply.
• All written complaints received should be faxed immediately and references
received through e-mail forwarded to concerned circles for taking necessary action.
Simultaneously, the office shall talk to the complainants/branches/circles, wherever
considered necessary.
• All forwarded complaints should be followed up with concerned circles for prompt
redressal of grievances and status should be placed before competent authorities.
• Status of all references received through CMD secretariat should be placed before
CMD on weekly basis.
• Complaints received will be seen in right perspective and will be analysed from all
possible angles.
• Thorough analysis of the complaints be done and necessary instructions be given
to COs/BOs for speedy redressal and followed up till final resolution and a redressal
letter should be sent to the complainant informing the decision taken on the
complaint.
65 | P a g e
 • For Complaints requiring systemic changes, a feedback is being given to the
concerned / owner Division for taking appropriate action / steps so as to avoid their
recurrence.

Time schedule for redressal of complaints:

• General Complaints 15 days
• Complaints forwarded by RBI/MOF/VVIPs 15 days
• Complaints from PM's office15 days
• ATM Complaints related to dispensing of Cash7 working days
• Complaints related to Point of Sale Transactions 45 days

Complaints requiring some time for examination of issues involved/detail

investigations/enquiries; Bank will send final response or explain reasons for further time
required within 30 days of receipt of complaint.

Efforts be made to ensure that maximum number of complaints are redressed

within the next working day and their resolution be informed over telephone or

:34
email provided by the complainant. Such complaints (being resolved within 24
hours) are to be excluded from the number as per RBI guidelines while submitting
quarterly data of complaints to Customer Care Centre, HO.
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21
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Nodal Officer and Other Designated Officials to Handle Complaints and

Grievances
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Nodal Officer: Bank would appoint a Principal Nodal Officer in the rank ofGeneral
Manager at Head Office level who will be responsible for the implementationand
monitoring of grievances redressal for customers in the bank.
Aggrieved customers can write directly to the Principal Nodal Officer regarding their
5

grievances at the following address:

The General Manager

Punjab National Bank
Customer Service Department
30

HO, Plot No.4, Sector 10

Dwarka, New Delhi – 110 075.
Email:[email protected]

Likewise, at Circle offices, the Circle Heads/ AGM / Chief Manager shall be theNodal
Officer and shall be responsible for the implementation and monitoring ofgrievance
redressal of customers for the branches under their administrativecontrol.
A well-knit Customer Care Centre under a reasonably senior and experienced officer,
duly supported by a team of 2-3 dedicated officers, be set up at Circle Officesto handle
complaints of customers in a befitting manner.
The names, addresses, e-mail and contact numbers of Nodal Officer(s) will be made
available at the branches and also available on the Bank’s website.

Code Compliance Officer:

Bank has adopted the BCSBI’s Code of Bank’s Commitments to customers. It has been
placed on bank’s website www.pnbindia.in to ensure implementation of Code of Bank’s
Commitment to Customers; bank shall have a Code Compliance Officer at each of its
66 | P a g e
controlling offices above the level of the branch and at the Head Office. General
Manager, Customer Care Centre has been appointed as a Principal Code Compliance
Officer at Head Office level.

Interaction with Customers

Customers’ Day is extended at the organization structure level and be conducted on 10th
of every month or next working Day if 10th is a holiday. Office bearers at respective
locations will meet customers and take necessary action for resolution of genuine
customer grievance between 3.00 PM to 5.00 PM.

Branch Level / Circle Level Customer Service Committees

Customer Service Committees should be constituted in all branches / Circle Offices with
greater involvement of customers, senior citizens and staff to study & discuss complaints
/ suggestions/ cases of delay/ difficulties faced or reported by customers / members of
committee and evolve ways and means of improving customer service. Date and time of
meeting is to be displayed in advance in the branch so that customers from cross
sections of society can attend the same.

:34
The Customer Service Committee at Branches will meet at regular intervals at least once
in a month preferably on a common date in all branches as decided by circle office.
24 7
Customer Relation Programmes 21
The system of Customer Relation Programme (Customer Meet) was introduced in May
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1985. Circle Offices are required to convene special meeting of customers drawn from
cross section of our clientele ensuring proper representation within the city where the
Circle Office is located, at least twice a year
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Sensitizing Operating Staff on Handling Complaints

Staff would be properly trained for handling complaints. We are dealing with people and
5

hence difference of opinion and area of disagreement can arise

Theme Based Staff Meeting

Customer Care Centre HO has been organising Theme Based Staff Meetings at the
30

branch level on Pan India basis at monthly interval to improve awareness amongst staff
about Bank products and schemes and also for improving knowledge & skill amongst the
staff.

Monthly bulletin “Customer speaks” is being published and circulated to branches to

sensitize the staff. This in-house magazine is published with few selected complaints in
verbatim along with the manner in which the grievance of the customer was resolved and
action taken against the erring officials. Gist of New Schemes is being displayed on the
Home Page of HRMS website https://pnbnet.net.in under the menu “NOTICE BOARD”.

Educating the customers

Nodal Officer of the concerned Circle Office shall inform the complainant about the
resolution/remedial action taken/bank’s views on the complaint.
Further, it is also necessary that the customer is made aware of his rights to approach
the concerned Banking Ombudsman, Directorate of Public Grievances in case he is not
satisfied with the bank's response.
67 | P a g e
Lounge for Senior Citizens
All the branches should make special arrangements to provide efficient counter service
to the pensioners, who are mostly senior citizens and display on the Notice Board
“LOUNGE FOR SENIOR CITIZENS” so that they need not wait for their turn by standing
in the queue.

Facility to sick/old/incapacitated non-pension account holders

The facilities offered to pension account holders should be extended to the non-pension
account holders also who are sick/old/incapacitated and are not willing to open and
operate joint accounts.

Display of Information by Banks – Comprehensive Notice Board/Information

Booklet
The Comprehensive Notice Board has to be updated regularly whenever there is a
change in respect of the information already displayed

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Information Booklets Website
The detailed information about Service Charges, Fees is available on our Bank’s website
www.pnbindia.in.
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21
Sitting Plan and Uninterrupted Service to the Customer
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Display of Indicator Boards

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May I Help You Counters

May I Help You Counters are the first point of contact for a customer entering the branch
and the impression he carries from this counter is the basis of his overall vision for the
5

Bank. Board, in its recent meeting, has also advised to improve the functioning of
‘Enquiry/ May I Help You’ Counters to enhance customer service in true spirit.

As per EASE 6.0 guidelines, there should be provision of ‘May I Help You’ Desk/
Counters’ at all branches/offices of our Bank for improving the customer services and
30

there is a marking system for this category

In addition to the dedicated counters being present at the branches where the staff
strength is 10 or more, it is required to designate one counter in front of main entrance
with suitable signage of ‘May I Help You’ for branches even in cases where staff strength
is less than 10. (GSAD CIRCULAR NO. 06/2024) MAY I HELP YOU DESK/
COUNTER IN ALL BRANCHES/ OFFICES- EASE AGENDA 6.0

HIGH NET WORTH INDIVIDUAL (HNI)RLBD CIRCULAR No. 10 /2020)

The detailed guidelines for High Net Worth Individuals and quality of customer service
to be provided were issued vide RBD (Resources) Circular No. 68/2017 dated
25.08.2017 and subsequent circulars issued on the subject from time to time.

68 | P a g e
Under the umbrella of CBS connectivity, it has become easier to convince/persuade
the customer to bank with us in a most profitable and convenient manner.
Hence, to cater to the needs of this high profile segment of the society, HNI concept
has been introduced in our Bank. High net worth individual is one of the most preferred
segment to bank with.
An individual is classified as an HNI if Total Relationship Value (TRV –CASA+TD) of
Rs 25.00 lakh or Quarterly Average Balance of Rs 5.00 Lakh or above in the SF
account in the preceding quarter is maintained.

Further, once a customer is identified as HNI, he/she continues to be classified an

HNI for next 6 months, from the day he/she fails to fulfil the required criteria.
In High Net worth Individual (HNIs) accounts a pop-up message is displayed for their
identification

PROVIDING BASIC BANKING FACILITIES TO SENIOR CITIZENS OF MORE THAN

70 YEARS OF AGE AND DIFFERENTLY ABLED OR INFIRM PERSONS INCLUDING
THOSE WHO ARE VISUALLY IMPAIRED AT THE PREMISES /RESIDENCE OF

:34
SUCH CUSTOMERS (CUSTOMER CARE CENTRE CIRCULAR NO. 19 /2021)

In view of the difficulties faced by senior citizens of more than 70 years of age and
24 7
differently abled or infirm persons including those who are visually impaired, RBI has
21
advised to provide basic banking facilities, such as pick up of cash and instruments
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against receipt, delivery of cash against withdrawal from account, delivery of demand
drafts, submission of KYC documents and Life Certificate at the premises/residence of
such customers.
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All branch offices are therefore advised to invariably provide these facilities to senior
citizens of more than 70 years of age and differently abled or infirm persons including
those who are visually impaired at the premises / residence of such customer. Branches
5

are advised to keep with them evidence of cases where such services are rendered as it
may be randomly checked by officials from Ministry of Finance / RBI. Citizens, prioritizing
their task and dealing politely so that they do not feel neglected and ignored.

BANKING FACILITY FOR SENIOR CITIZENS AND DIFFERENTLY ABLED

30

PERSONS (CCC CIR NO 08/2018 17.04.2018&CCC CIR NO 03/2019 18.02.2019)

Updated the guidelines of RBI, on the subject, are summarized hereunder:-

(a) Dedicated Counters/Preference to Senior Citizens, Differently abled persons

–A clearly identifiable dedicated counter providing priority to senior citizens and people
who are differently abled including visually impaired persons be provided.

(b) Ease of submitting Life Certificate – Pensioner(s) can submit physical / digital life
certificate at any branch of the pension paying bank. Obtention of physical life certificate
at branch including a non-home branch be updated promptly in CBS by the receiving
branch itself to avoid any delay in credit of pension.

(c) Ease of Filing Form 15G/H – Senior citizens and differently abled persons be
provided for Form 15 G/H once in a year (preferably in April) to enable them to submit the
same within the stipulated time

69 | P a g e
(d) Cheque Book Facility: - Senior citizens and differently abled persons shall not be
insisted upon for physical presence to get cheque books.

(e) Automatic conversion of status of accounts – Fully KYC complaint accounts

should automatically be converted into Senior Citizen Accounts based on the date of
birth available in bank’s records.

(f) Additional Facilities to visually impaired customers – Visually impaired

customers be allowed to operate the account through identification of thumb/toe
impression/mark by two independent witnesses. Banking Facility for Senior Citizens and
Differently abled Persons

(g) Door-Step Banking - Branches to make available facility of collection of life

certificate(s) at premises/residence of such pensioner(s) who are more than 70 years of
age/ visually impaired/ differently abled or infirm (have medically certified chronic illness
or disability) including submission of KYC documents.

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 CUSTOMER RIGHTS POLICY FOR 2024-25

(CUSTOMER CARE CENTRE CIRCULAR NO. 17/2024

The Customer Rights Policy enshrines basic rights of the customers of the Bank
regulated by the Reserve Bank of India. It spells out the rights of the customer and also
the responsibilities of the bank. The Policy applies to all products and services offered by
the bank or its agents, whether provided across the counter, over phone, by post,
through interactive electronic devices, on internet or by any other method.

Right of the Customers are as follows:

▪ Right to Fair Treatment
▪ Right to Transparency,
▪ Right to Suitability
▪ Right to Privacy
▪ Right to Grievance Redress and Compensation
GENERAL INSTRUCTIONS IN DEPOSIT ACCOUNTS/ ROUTINE BANKING

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With the increasing use of banking channel, the customers are making increasing use of
the cheques, drafts and other banking instruments to meet their liabilities / obligations.
24 7
The value of these instruments may also be in fraction of a rupee, as the customers
21
might be making payments in full discharge of their liability.
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Branches should ensure that any transaction, including cheque presented for clearing /
collection or for purchase of draft etc., having money value in fraction of a rupee, are
not refused for the reason that the transaction involves fraction of a rupee.
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The account holder be advised to immediately intimate to the bank, any change in his
address and get acknowledgement thereof obtained.
5

Pass books / Statement of accounts

(i) A pass book will be issued by the bank for each account, which will contain record of all
its transactions. The customers should be advised to get their pass books updated
periodically.
30

The customers should be advised to quote account number on withdrawal slip,

cheque, pay-in-slip and any other communication, addressed to the bank.

If any customer desires to have statements of his account periodically, instead of

passbook, his request will be obtained and held on record and recorded in a register in
order of the intervals at which the same is to be provided by the Bank.

(ii) Users at all levels are advised to ensure that while entering transaction in customers’
accounts, complete particulars such as the name of the payee etc., as well as details of
deposits such as transfer particulars i.e. by clearing cheque or by outstation cheque or
by electronic fund transfer etc. must be mentioned so that the passbook / statement of
account show complete details when printed thus enabling the customers to identify the
transactions.

(iii) Customer should be advised to send the passbook to the bank for completion at
least once a month. Mistakes if any detected therein, should be immediately brought to
the notice of the Manager.
71 | P a g e
(iv) The depositor should also be advised to remain careful in keeping his passbook, in
proper custody. If the passbook is lost or stolen, a duplicate commencing from the
opening of the current half-year should be issued and a copy of the account, prior to that
date, can also be supplied on demand.

(v) The passbook / statement of account / credit / debit advice issued in customer’s
account must not be left on the counter for the customer to pick up during his visit to the
branch. Leaving these on the counters is in violation of banking code on the maintenance
of confidentiality of transactions between the customers, as any other person visiting the
bank can look at others’ bank documents, or even use them with a criminal motive.

(vi) All branches shall display a board at a conspicuous place reading as under:
“Dear Customer, Please do not accept any manual entry in your pass book / statement of
A/c”

ISSUE OF PASS BOOKS-SAFEGUARDS:

:34
Pass books should, as far as possible, be collected by the tenderer from the bank duly
filled up and completed immediately after the transaction. If left overnight with the bank,
the tenderer will be given a simple receipt, (form no. PNB-649), retaining carbon copy
24 7
thereof for record. If the pass book is not collected against the receipt within a week, it
21
should be sent to the account-holder by registered AD post at his cost.
-20 52

As far as possible, it should be ensured that the depositor has not put his specimen
signatures anywhere in the Pass Books. If these are found to be there, customer should
be advised to delete it then & there in such a manner that these are not legible.
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Pass book remaining with the branches overnight should be held under lock and key and
in the custody of a named responsible official.
5

ADDITIONAL SAFEGUARDS FOR ISSUE OF DUPLICATE PASS BOOK

The twin objective of providing various safeguards for issuing duplicate pass books has
been the proper identification of the account holder and the delivery of the cheque
book/pass book to the account holder only and to none-else because a number of
instances have come to light where culprits could defraud the bank by obtaining
30

duplicate pass book on the strength of letter of request under forged signatures.In case
an application for issue of duplicate passbook is presented by a person other than the
account holder, duplicate pass book should be sent by Regd. AD post only at the
address available in the relative account opening form.

PAN / GIR Number or Form 60 / 61

The prospective account holder is required to mention his / her PAN / GIR no. on the
documents relating to certain specified transactions. The concerned official, who
receives any document relating to a transaction requiring quoting of PAN, should verify
the PAN (as recorded on the document) from the original and put his signature having
verified the original.
In case the customer is not having the same, Form No. 60 is required to be obtained.

Documents pertaining to transactions requiring quoting of Permanent Account

Number (PAN)

72 | P a g e
As per Rule 114B of Income Tax Rules, every person shall quote his
permanent account number in all documents pertaining to the transactions specified in
the Table below:-
S. No. Nature of Transaction Value of transaction
(1) (2) (3)
1 Sale or purchase of a motor vehicle or vehicle, as All such transactions.
defined in clause (28) of section 2 of the Motor
Vehicles Act, 1988 (59 of 1988) which requires
registration by a registering authority under Chapter
IV of that Act, other than two wheeled vehicles.
2 Opening an account [other than a time-deposit All such transactions
referred to at Sl. No.12 and a Basic SB Deposit A/C]
with a banking company or a co- operative bank to
which the Banking Regulation Act, 1949 (10 of 1949),
applies (including any bank or banking institution
referred to in section 51 of that Act).
3 Making an application to any banking company or a All such transactions

:34
co-operative bank to which the Banking Regulation
Act, 1949 (10 of 1949), applies (including any bank or
banking institution referred to in section 51 of that Act)
24 7
21
or to any other company or institution, for issue of a
-20 52

credit or debit card.

4 Opening of a demat account with a depository, All such transactions
participant, custodian of securities or any other person
-11 216

registered under sub-section (1A) of section 12 of the

Securities and Exchange Board of India Act, 1992 (15
of 1992).
5 Payment to a hotel or restaurant against a bill or bills Payment in cash of an
5

at any one time. amount exceeding fifty

thousand rupees.
6 Payment in connection with travel to any foreign Payment in cash of an
country or payment for purchase of any foreign amount exceeding fifty
currency at any one time. thousand rupees.
30

7 Payment to a Mutual Fund for purchase of its units. Amount exceeding fifty
thousand rupees
8 Payment to a company or an institution for acquiring Amount exceeding fifty
debentures or bonds issued by it thousand rupees
9 Payment to the Reserve Bank of India, constituted Amount exceeding fifty
under section 3 of the Reserve Bank of India Act, thousand rupees
1934 (2 of 1934) for acquiring bonds issued by it.
10 Deposit with a banking company or a co-operative Cash Deposits:- (i)
bank to which the Banking Regulation Act, 1949 (10 of exceeding fifty
1949), applies (including any bank or banking thousand rupees
institution referred to in section 51 of that Act). (ii) post during any one day: or
office (ii) aggregating to more
than two lakh fifty
thousand rupees
during the period 09th
November,2016 to
30th December,2016.

73 | P a g e
11 Purchase of bank drafts or pay orders or banker’s Payment in cash for an
cheques from a banking company or a co-operative amount exceeding fifty
bank to which the Banking Regulation Act, 1949 (10 of thousand rupees
1949), applies (including any bank or banking during any one day.
institution referred to in section 51 of that Act).
12 A time deposit with, - (i) a banking company or a Amount exceeding fifty
co-operative bank to which the Banking Regulation thousand rupees or
Act, 1949 (10 of 1949), applies (including any bank or aggregating to more
banking institution referred to in section 51 of that than five lakh rupees
Act); (ii) a Post Office; (iii) a Nidhi referred to in section during a financial year.
406 of the Companies Act, 2013 (18 of 2013); or (iv) a
non-banking financial company which holds a
certificate of registration under section 45-IA of the
Reserve Bank of India Act, 1934 (2 of 1934), to hold or
accept deposit from public.
13 Payment for one or more pre-paid payment Payment in cash or by
instruments, as defined in the policy guidelines for way of a bank draft or

:34
issuance and operation of pre-paid payment pay order or banker’s
instruments issued by Reserve Bank of India under cheque of an amount
section 18 of the Payment and Settlement Systems aggregating to more
24 7
21
Act, 2007 (51 of 2007), to a banking company or a
co-operative bank to which the Banking Regulation
than fifty thousand
rupees in a financial
-20 52

Act, 1949 (10 of 1949), applies (including any bank or year.

banking institution referred to in section 51 of that Act)
-11 216

or to any other company or institution.

14 Payment as life insurance premium to an insurer as Amount aggregating to
defined in clause (9) of section 2 of the Insurance Act, more than fifty
1938 (4 of 1938) thousand rupees in a
5

financial year.
15 A contract for sale or purchase of securities (other Amount exceeding one
than shares) as defined in clause (h) of section 2 of lakh rupees per
the Securities Contracts (Regulation) Act, 1956 (42 of transaction.
1956).
16 Sale or purchase, by any person, of shares of a Amount exceeding one
30

company not listed in a recognised stock exchange. lakh rupees per

transaction.
17 Sale or purchase of any immovable property Amount exceeding ten
lakh rupees or valued
by stamp valuation
authority referred to in
section 50C of the Act
at an amount
exceeding ten lakh
rupees.
18 Sale or purchase, by any person, of goods or services Amount exceeding two
of any nature other than those specified at Sl. No. 1 to lakh rupees per
17 of this Table, if any. transaction:

Provided that where a person, entering into any transaction referred to in this rule, is a
minor and who does not have any income chargeable to income-tax, he shall quote the

74 | P a g e
permanent account number of his father or mother or guardian, as the case may be, in
the document pertaining to the said transaction.

Provided further a person who has an account (other than a time deposit and a Basic
Saving Bank Deposit Account) and has not quoted his PAN or furnished Form no.60,
shall furnish his/her PAN or Form no.60 as the case may be on or before 28th February,
2017.

Provided also that the provisions of this rule shall not apply to the following class or
classes of persons, namely:-
1. The Central Government, the State Governments and the Consular Offices;
2. The non-residents referred to in clause (30) of section 2 of the Act in respect of the
transactions other than a transaction referred to at Sl. No. 1 or 2 or 4 or 7 or 8 or
10 or 12 or 14 or 15 or 16 or 17 of the Table.

Rule 114C of the Rules makes it compulsory for the person receiving the documents in

:34
relation to transaction mentioned in Rule 114B, to verify that PAN has been duly
mentioned on all the documents or Form 60 has been collected in cases where there is
no PAN mentioned on the documents.
24 7
21
Rule 114D is related to the Time and manner in which persons referred to in rule 114C
-20 52

shall furnish a statement containing particulars of Form No. 60.

Rule 114E of the Income Tax Rules, 1962 specifies that the statement of financial
-11 216

transaction is furnished in Form No. 61A. It is mandatory that specified reporting

entity/person shall furnish a statement of financial transaction or reportable account as
per Section 285BA of the Income Tax Act, 1961.
5

General Instructions
• Whenever a new account is opened, PAN number be obtained and recorded in
the field ‘PAN/GIR No.’ under Customer Tax Details in ‘CUMM’.
• In case the customer does not have PAN or falls under the exempted category,
Form No. 60/61, as the case may be, be obtained and the fact be recorded in the
30

field ‘TDS Remarks’ under Customer Tax Details in ‘CUMM’.

• In existing accounts, wherever PAN number is available, the same be recorded in
the field ‘PAN/GIR No.’ under Customer Tax Details in ‘CUMM’.
• In terms of clarification given by Indian Banks’ Association and further examined
by Law Division, HO;
(a) If Bank is already having PAN of the account holder, there is no need for the
account holder to quote his PAN on the deposit slip whenever a cash deposit of
Rs.50,000/- and above is made in a day, even if it is deposited more than once.
(b) Rule 114B (I. Tax Act) requires the party to the transaction i.e. the account
holder to quote his PAN and this does not apply to any person or agent of the
account holder depositing the cash in the latter’s account.
(c) Accordingly, PAN No. of the account holder, and not that of the person making
the transaction on behalf of the account holder, is required to be quoted on the
documents pertaining to the eligible transactions. Updated up to 30/06/2017 I &
AD BOI / CH. IV
• In case of FD, if PAN is already provided with the bank, subsequent deposits
would not require quoting of PAN. However, where account holder had submitted
75 | P a g e
 declaration on 60, PAN/Declaration will be taken with each transaction exceeding
Rs.50, 000/- or aggregating to more than five lakh rupees during a financial year.
• The Rules are applicable in case of renewal of an existing time deposit also. If the
deposit exceeds Rs.50,000/-or aggregating to more than five lakh rupees during a
financial year, renewal request has to quote PAN/GIR number of the depositor or
he has to furnish form No. 60.
• In case of account in the name of two or more persons, first named person has to
comply with the requirement of furnishing PAN.
• Transfer of an account from one branch to another is not opening of an account.
Hence, request for transfer of account does not require quoting of PAN.
• At the time of opening of account or linking of existing account in the name of any
legal entity, it may be ensured that the PAN details of legal entity are obtained and
not just of any concerned director or partner or trustee or authorized signatory.”
(As per IAD CIRCULAR NO. 08/2018 Dated 26.02.2018)
•

CATEGORIES OF DEPOSITORS

:34
SENIOR CITIZEN
24 7
21
a) A person who has completed 60 years of age is treated as a senior citizen. Bank offers
-20 52
additional interest on Fixed Deposits made by a Senior Citizen.
b) The age of the Senior Citizen depositor shall be verified through any of the following
documents:--
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I. Secondary school leaving certificate indicating date of birth;

II. L.I.C. policy;
III. Voters’ identity card;
IV. Pension payment order;
5

V. Birth certificate issued by the competent authority;

VI. Passport;
VII. Driving license;
VIII. PAN Card;
IX. UID; or
X. Any other documentary proof to the satisfaction of the Branch Manager
30

A copy of the document so presented & verified shall be kept on records along with the
related Account Opening Form.

c) Once the age of Senior Citizen is verified for accepting a deposit, there is no need to
seek proof of age for renewal of deposits or while taking subsequent deposits
from him/her.

d) The benefit of increased rate of interest will be given to the senior citizen on opening
the FD accounts in their own names or with any other person (whether senior citizen or
otherwise). For accepting deposits of senior citizens jointly with other persons below the
age of sixty years, it may be ensured that the name of the senior citizen is given as the
first name in the application and an undertaking is taken from the senior citizen that the
amount of deposit belongs to him/her.

e) The benefit of additional rate of interest as applicable to Fixed Deposit of

Senior Citizens may also be permitted to the Bank's ex-staff subject to
76 | P a g e
compliance of terms and conditions as applicable to Senior Citizens. This will be
in addition to the existing benefit of 1% over and above the normal rates as being
allowed to the retired staff under the extant directive

Premium Customer
A customer maintaining a balance above a stipulated limit is designated as Premium
Customer. The threshold limit for balance in the account as well as the
facilities/concessions to such customer is advised from time to time by Resource
Mobilisation Division, Head Office.

SPECIAL CATEGORY ACCOUNTS

ARMED FORCES PERSONNEL - OPENING OF NEW ACCOUNTS

a). In the cantonment areas, deposit accounts may be opened in the name of armed
forces personnel on the basis of their identity cards.
b) In other areas, such accounts may be opened on the basis of an introductory letter to
the Manager of the branch by the Commanding Officer of the Unit and the signatures of

:34
the soldier(s) must be attested by the Commanding Officer.
c) The soldier(s) may also be asked to produce their identity card(s), which include
photograph, personal particulars including identification marks, army number, etc. The
24 7
respective particulars should be recorded in the account opening form and the same
21
must be authenticated by the authorised official(s).
-20 52

d) All the personnel of Indian Army, Naval Force, Indian Air Force, BSF, CRPF, CISF,
ITBP and other paramilitary forces, state police, Metro Police, RAW, IB, CBI and Indian
Coast Guard personnel are presently eligible to open account under PNB Rakshak
-11 216

Scheme under scheme code SBDPS or SBDPO and occupation code of the customer as
under: PBORS; Person below Officer Rank, OFFCR: Officer below Brigadier Rank & or
equivalent BRGEQ Brigadier & above or Equivalent. Personal Accidental Insurance
(PAI) cover is taken on the basis of above occupation codes for the benefit of defence
5

personnel.

REGIMENTAL, OFFICER’S MESS/CANTEEN AND OTHER NON-PUBLIC FUND

ACCOUNTS OF ARMY/NAVY/AIR FORCE
Account opening form on PNB-758, should be obtained in such cases. Before allowing
30

overdrafts, if any, in such accounts, Incumbents in-charge should fully satisfy

themselves that the authorised signatory (ies) is/are duly empowered in this respect,
besides observing usual safeguards.

ACCOUNTS IN THE NAMES OF PURDANASHIN LADIES:

Current accounts may not be opened in the names of purdanashin ladies without the
sanction of the Circle Office.

ACCOUNTS IN THE NAMES OF MINORS

a) Opening and operation of Savings/Term Deposits and Recurring Deposit accounts
independently should be allowed to the minors of the age of 10 years and above on
obtaining satisfactory proof of age.
b) A minor attains majority at 18 years of age. The date of majority is to be recorded in
the majority attainment register (form No.PNB-51) and appropriately entered in the
System while opening account. When the minor attains majority, a fresh account
opening form should be taken from him/her and operations in the account allowed only in
accordance with the instructions contained therein.
77 | P a g e
c) In no case should a minor be allowed an overdraft.
d)Cheque book may be issued in minor account in following cases whether it may be
Vidyarthi account or not:
I. Where the minor account is opened through his/her natural or legally appointed
guardian and
II. Where minor above age of 10 years is allowed to open and operate saving fund
accounts independently.
Cheques issued in minor accounts will be honoured only if credit balance is available.
(Reference: INSPECTION AND AUDIT DIVISION CIRCULAR NO. 10 /2018)

ACCOUNTS IN THE NAMES OF ILLITERATES

a) AOF & annexure PNB 1227to be taken should be duly witnessed.
b) A copy of photograph (passport size) of the depositor will be taken and pasted on the
Passbook, besides pasting the photograph on AOF& Specimen Signatures slip.
c) Brief details of one or more identification marks of the depositor, i.e. a mole or scar will
be noted on the account opening form, duly authenticated.

:34
NO ACCOUNT IN THE NAMES OF UNDISCHARGED INSOLVENTS BE OPENED

ACCOUNTS IN THE NAME OF A BLIND PERSON

24 7
a) A blind person may be allowed to open a savings account, singly or jointly with others.
21
His/her signatures (if literate) and left/right hand thumb impression (if illiterate) will be
-20 52

taken, in the presence of an Officer, authorised to open accounts and witnessed by an

existing account holder or person otherwise having some business relationship with the
bank and attested by the officer concerned.
-11 216

b) Wherever possible, number and details of one or more identification marks of the blind
person i.e. mole or scar, will be noted on the account opening form and specimen
signatures slip, under authentication of the checking official. Three copies of photograph,
(Passport size), of the blind person, duly attested by the checking official, will be taken
5

and pasted on account opening form, specimen signatures slip and pass book. The cost
of photographs may be debited to the bank's revenue, at the discretion of the incumbent
In-charge.
c) While opening such accounts, the rules and conditions governing such accounts, in
general and the special conditions, in view of his/her physical infirmity be written on the
30

account opening form and explained to the blind person, in the presence of a witness. A
suitable certificate from the witness, for having done so, should be obtained, at
appropriate place, on the account opening form.
d) A rubber stamp indicating that the account holder is blind, should be affixed on the
account opening form, specimen signatures slip; pass book, pay-in-slip, withdrawal slip
and cheque book, etc.

BANK EMPLOYEES’ ACCOUNTS

a) Incumbents In-charge while allowing opening of second/subsequent running accounts
viz. SF, CA of our Bank Staff must satisfy themselves about the genuineness of the need
for such accounts.
b) Transactions in the employees' accounts be scrutinised strictly considering the aspect
of cadre of employee vis-à-vis size & volume of transactions in the account. To have
effective monitoring of transactions in the Staff accounts (SF & OD), ITD, Head office has
customized a report which is available in MIS server through menu option RAUDIT
2/23where in staff accounts whose aggregate Credit and Debit summation during the

78 | P a g e
month exceeds Rs.5 lacs would be reported.The report has been customized to check
heavy transactions in the staff accounts.
c) The benefit of additional rate of interest to banks’ staff members or retired staff
member is available only in case of the staff member or retired staff members has an
account singly or jointly with family member where the staff member/retired staff
members is the Principal Account Holder. The staff member who is principal account
holder in a joint account may give a declaration to the Bank that the monies belong to
the depositor.

ACCOUNTS IN THE NAMES OF SOLE PROPRIETORSHIP FIRMS

In case of individuals trading under impersonal names or under names other than their
own, the relevant account must clearly indicate the connection of the proprietor with the
concern. Application to open an account of sole proprietorship concern will be taken, in
which the name of sole proprietor and the name of any other person authorised to
operate upon the account, and their specimen signatures, will be obtained.
PARTNERSHIP FIRMS
a) An application to open an account in the name of a partnership firm will be made on

:34
form No.PNB-1229, which will be signed by all the partners in their individual capacity,
while specimen signatures will be obtained in their representative capacity
b) Incumbents In-charge will endeavour to obtain a copy of the partnership deed from all
24 7
partnership firms dealing with the bank but they should not insist on it for merely an
21
ordinary current account or a term deposit account.
-20 52

It is to be noted that a minor can't be a partner in a firm, but may be admitted, with the
consent of the partners, to the benefits of the firm. In such cases a letter of declaration on
-11 216

form no. PNB38 may be obtained. The date, on which a minor attains majority, should be
entered in the majority attainment register / computer records and suitably diarised. On
his attaining majority, he should be requested to join with the other partners in signing a
fresh form no. PNB-38.
5

HUF cannot be a partner in a partnership firm. However, the Karta of a HUF, in his
individual capacity, can enter into a valid partnership with other person or
persons

HUF ACCOUNTS
30

Since the Indian Partnership Act does not apply to a firm consisting of members of a
Hindu undivided family trading as such, form no.PNB-38 is not applicable to such a firm.
In its place form No.PNB-1229 should be taken. The application on form No.PNB-440
should be signed by the Karta for self and on behalf of all the major and minor
co-parceners of the joint Hindu family, and also by the other major co-parceners.

LIMITED LIABILITY COMPANIES ACCOUNTS

a) Before opening an account in the name of a company registered under the
Companies Act, 1956, a copy of the company's memorandum and articles of association
should be filed at the branch with the paragraphs affecting the bank's relations with the
company should be carefully read and conspicuously marked.
b) An account in the name of a company is generally opened by means of a resolution
passed by its Board of Directors. In such case form nos. PNB-293 and PNB-294 will be
taken.
Form No.PNB-293 contains a request for opening of an account and also stipulates the
documents that are required to be submitted to the bank.

79 | P a g e
Form no. PNB-294 contains a copy of the resolution passed by the Board of Directors of
the company authorising the opening of the account and stating who is authorised to
operate on it.
Both of these forms will be signed by the chairman and the secretary of the company,
whilst specimen signatures of the officials authorised to operate upon the account will be
obtained in their representative capacities.
Care must be exercised that the names and designations of persons authorised to
operate the account are clearly stated and, where such an authority is in favour of a firm
of managing agents, the constitution and full particulars of such firm and the names,
designations and specimen signatures of the officials authorised to sign on its behalf
must be placed on record.

ACCOUNTS OF BANKS
Branches should not open operative accounts for banks without obtaining the mandate
from their competent/controlling authority.

TRUST ACCOUNTS

:34
Before a trust account is opened, the trust deed must be called for and a copy or relevant
extracts taken, serially numbered and retained in an indexed file. All portions of the deed,
which in any way relate to the working of banking accounts must be entered in the power
24 7
of attorney register (form No. PNB-45).
21
Along with the trust deed, an account opening form on form No. PNB-1229 should be
-20 52

taken. This form should be signed by all the trustees and should be accompanied by a
certified copy of the resolution authorising the opening of the account and stating the
names of the trustees authorised to operate thereon.
-11 216

PROVIDENT FUND TRUST ACCOUNTS

For opening a current account in the name of a Provident Fund Trust, an application
should be taken and a copy of the resolution passed by the board of directors, managing
5

committee, executive officers, councillors, etc., together with a copy of the trust deed, be
obtained. The safeguards to be observed in the maintenance of trust accounts given
above will also apply in the case of provident fund trust accounts.

LIQUIDATORS’ ACCOUNTS
30

a) When requested to open an account for a liquidator under a compulsory winding up

order, incumbent in-charge should ask for production of the order of the court appointing
him as such. A copy of such order along with a written request from the liquidator should
be obtained and kept on branch record alongwith an account opening form.
b) A liquidator appointed in voluntary winding up proceedings should be asked to
produce a certified copy of the resolution of the creditors or members of the company
appointing him as a liquidator, which copy will be retained along withtheAOF.
c) A liquidator's account will be opened as "Official Liquidator of A.B.C. Co. Ltd., (in
liquidation)." Cheques should be drawn on the account in the name of the Company as:-
For A.B.C. Co. Ltd., (in liquidation)
D.F. Official Liquidator"
d) Where two or more liquidators are appointed, all must sign cheques, unless the order
of the court in a compulsory winding up provides for less than all to act or, in a voluntary
winding up the resolution to wind up provides for less than all to sign.
e) Liquidators cannot delegate their powers to third parties. When more than one
liquidator is appointed, they may not authorise less than two of their number to sign

80 | P a g e
 generally unless empowered to do so at the time of their appointment, although they may
all authorise one of their number or a third party to sign a particular document.

EXECUTORS’ AND ADMINISTRATORS’ ACCOUNTS

a) Executors and Administrators have essentially the same duties i.e. realisation,
administration and distribution of a deceased's property; they differ in the manner of their
appointment.
An executor is appointed by the Will of a deceased person and his authority is derived
from the Will and does not become operative until probate has been obtained from Court.
An Administrator is appointed by the court to deal with the estate of an intestate person,
i.e. a person who has left no Will.
b) Accounts in the names of Executors and Administrators should be opened in the
following style: -
A.B. and C.D., Executors to the Estate of Y.Z., deceased,
OR
A.B., Administrator (or Administratrix) to the Estate of

:34
Y.Z., deceased.
c) The account opening form must be signed by all the Executors to whom probate has
been granted or by all the Administrators, if more than one, and the relative probate or
24 7
letters of administration must be registered at the branch in the power of attorney
21
register.
-20 52

d) Executors and Administrators cannot legally delegate their powers. Any power of
attorney or other authority given to a third party to operate the account must not,
therefore, be accepted.
-11 216

SPECIMEN SIGNATURES
a) AOF and Specimen Signatures of persons authorized to operate the account shall be
verified & preserved manually.
5

b) The account opening form and specimen signature slip(s) will be kept in numerical
order in locked loose-leaf binders for ready reference. Necessary precautions must be
taken to prevent an unauthorised signature slip being placed on record.
c) Such binders duly locked will always remain under the control of a checking official
and must be placed in the strong room overnight. The keys thereto must remain in the
30

custody of the Incumbent In charge or officer, who will personally supervise the insertion
or withdrawal of specimen signature slips.

Specimen Signatures – Facility of Honouring Cheques with Facsimile Signatures

(a) The facility shall be extended in fully KYC Compliant account of reputed Corporate
Customers only after exercising due diligence.
(b) Under the scheme, the authorised Corporate Customer would be permitted to issue
cheques with Facsimile Signatures, subject to monetary limit of each cheque being
maximum Rs.1.00 lac. Accordingly, the Corporate Client shall not issue single cheque
for an amount exceeding Rs.1.00 lac.
(c) Circle Head would be the Competent Authority to sanction allowing of the facility of
issuing cheques with Facsimile Signatures. The eligible customers, desirous of availing
said facility, shall apply in writing to their base branch (account maintaining branch),
which would recommend the case to Circle Head.

SIGNATURE SCANNING, STORAGE & RETRIEVAL SYSTEM

I. Scanning should be done on daily basis for new accounts
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 II. The authorized officer will verify the signatures on line and ensure scanning of
signatures of all accounts. Every deletion and modification should be verified by
authorized officer.
III. Signature should be scanned as per Customer ID
IV. Scanning of signatures should be restricted to System Administrator/ authorized
officer. The scanned signatures should also be authorized in the system by an
authorized officer other than System Administrator.
V. More than one signature of the customer should be captured from the four
specimen signatures given on the signature slip.
VI. Scanned signatures should be very clear.
VII. Description for the signature field should be used for noting down any specific
instructions, e.g. “these signatures are valid for amount below ten lacs”, joint
signatures or any two etc.
VIII. Irrelevant areas should not be scanned.
IX. Inoperative account signatures shall be classified separately and access to such
signatures would be controlled. The general user will not be able to see the
signatures of inoperative accounts. The right to view signature of inoperative

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account is restricted to authorized officer. The transactions relating to inoperative
accounts should be in accordance with guidelines of the bank.
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VIEWING OF SIGNATURE 21
a) The signatures scanned as per Customer ID can be viewed from any account opened
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under any scheme for that particular Customer ID by entering the account number.

TRANSFER OF ACCOUNTS
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General
a) During the currency of a deposit account, the account holder shall be at liberty to get
his account transferred to a branch at a place convenient to him. Transfer of account
shall be free of any transaction fee.
5

b) Request application for transfer of account with complete address & mobile no.
telephone no.
c) Dealing official to verify signatures on the application
d) The dealing official would enquire from the customer of having issued cheque/s in the
account which has not yet been presented for payment. If there be any, customer
30

would be advised to wait for the presentment of the cheque/s or give an undertaking
that Bank shall not be liable for dishonour of cheque as a consequent to transfer of
account.
e) Surrender the unused cheque leaves in his/her possession.

Where Application is tendered at Transferor Branch

a) Where ‘Application’ is tendered at the ‘Transferor Branch’, the cheque numbers
tendered as blank would be destroyed, recorded in the Register meant for the
purpose and would also be destroyed in the ‘System’. Thereafter, the account would
be transferred procedurally to the Transferee Branch by using the Menu Option
‘HACXFRSOL’.
b) Related AOF,SS slip, other documents be forwarded to transferee branch by speed
post

Where Application is tendered at Transferee Branch

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(a) Where ‘Application’ is tendered by the Account Holder at the ‘Transferee Branch’, the
KYC formalities required to be completed at transferee branch would be completed.
Thereafter, the authorized official would physically destroy the blank cheque leaves
surrendered by the customer and record in the Register meant for the purpose.
(b) The details of the Application received & action taken at the ‘Transferee Branch’ shall
be entered in CBS by invoking Menu Option ‘ACTF’. On verification of the details, as
entered by the SWO, by the Authorised Official, System would generate a unique
‘Lead Number’ which shall be recorded on the ‘Application’ for future reference and
follow up by the ‘Transferee Branch’.
(c) A Report for the ‘Transferor Branch’ has been customized in CBS under the Menu
Option ‘CTRPT’. The Data Base Administrator (DBA) at the ‘Transferor Branch’ shall
generate the Report as a part of ‘Day Begin’ activity and handover the same to the
dealing official.
(d) The dealing official would invoke the Menu Option ‘ACTF’, satisfy (with reference to
the ‘Lead Number’ as entered in the Report), with the details as entered by the
‘Transferee Branch’. In case it is decided to transfer the account, the cheque
numbers destroyed at the ‘Transferee Branch’ would be destroyed in ‘System’ and

:34
account would be transferred through Menu Option ‘ACXFRSOL’. The status of
transfer of account would be changed from ‘Pending’ to ‘Transferred’ by invoking
Menu Option ‘ACTF’. The Report referred to in Para (c) above, shall be vouched with
24 7
the debit voucher 21
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Closing of Account within 14 days of its opening: No charges

If a depositor closes his account, after trial period of 14 days but within 12 months of its
opening, the prescribed charges shall be recovered.
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Withdrawal Form
i) Withdrawal form does not have the features of a cheque and may pose certain
problems if withdrawal form is allowed for payment at CBS branches other than the base
5

branch. Accordingly, cash payments through withdrawal forms are permitted only at the
branch where the customer maintains the account and not at other branch. The clause,
“Usable at Base Branch only” is printed on the face of the withdrawal slip.
i) The stock of withdrawal forms must remain with the official on the enquiry
counter/SWO. In no case, should withdrawal slips be left in the banking hall
30

outside the counter. The withdrawal slip must be presented by the customer
personally duly filled in and signed by him, along with the pass book.
While handing over the Withdrawal Slip to the Account Holder, supervisory staff
should affix the dater rubber stamp on withdrawal slip.This is to counter check that
the slips have been made available from branch counter.
ii) The payment of Withdrawal slip with dater stamp be made by the Single Window
Operator, within his prescribed passing power with other usual safeguards.
iii) For payments beyond the power of Single Window Operator, The SWO will enter
the same in the computer and issue the Token to the Account Holder. Payment
beyond Rs.50000/- be permitted by the incumbent and it should be ensured by
the dealing officer that withdrawal slip reaches the cashier only through the
person authorised for this purpose and in no case it be handed over to the
Account Holder for delivery to the cashier. Cashier while making the payment to
the Account Holder must :
(a) Obtain the Withdrawal slip along with pass book from the authorised person
only.
(b) Verify the genuineness of the Token.
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 (c) Check the transaction in CBS, before making the payment to the Account
Holder.
iv) Withdrawal slips should be printed with respective branch name and distinctive
number and printing should be centralized at Printing and Stationery Department
only.The withdrawal slips should be printed centrally keeping in view the number
of withdrawals made at the branch through CBS without any specific request from
branch, once in 6 months. The same should be printed and dispatched to the
branches proactively by HO: Printing and Stationery Department. Cash payment
against tender of Withdrawal Slip shall not be permitted to third party, even if the
same is accompanied with pass book.
v) On presentment of Withdrawal Slip by the account holder personally, he/she may
be permitted withdrawal of unlimited amount, subject to observance of usual
safeguards, viz. production of pass book, verification of signatures, availability of
balance etc.
vi) Depositors must produce their passbooks, when withdrawing money from their
accounts, by a withdrawal slip. Such instruments without production of the pass
book, must be referred to the Manager, who may permit such withdrawals only in

:34
very exceptional circumstances, provided he is personally satisfied, that there is
no risk in doing so. While exercising such authority, Manager must satisfy himself
about the genuineness of the mandate and will record the reasons for allowing the
24 7
payment on the back of the withdrawal slip itself. Manager will be held personally
21
liable if it transpires subsequently that payment through withdrawal slip was
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wrongly made.

Cash payment against tender of Withdrawal Slip shall not be permitted to third
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party, even if the same is accompanied with pass book.

DRAWING OF CHEQUES
The customers should be advised as under:
5

(i) Cheques and Drafts, etc. tendered for "collection and credit" to an account should
not be drawn against until these have been actually realised.
(ii) Branches would display following notice at conspicuous place in the banking-hall:
“Bank shall only honour or pay the cheques of the customers against clear balance up
to the previous day and having regard to the drawals of the day already made in the
30

account”.
(iii) The bank will not be held responsible, in the event of cheques being dishonoured
for having been drawn against cover in course of realization.
(iv) The bank will take every precaution to see that funds paid in for credit to accounts
are correctly recorded in the respective accounts; but in case any cheque is returned
by the bank inadvertently, it will not be held liable for any damage arising there-from.
(v) Cheques must be drawn on the bank's printed forms out of the cheque book
supplied to the constituents for the purpose. The bank reserves the right to refuse
payment of any cheque drawn otherwise.
(vi)For cheques drawn for a sum less than Rs.50/-, a charge of Rs.20/- per cheque be
levied.
(vii) Constituents should not overdraw their accounts without having made previous
arrangements.
(viii) Cheques should be drawn in such a way as to prevent subsequent additions or
insertions and the signatures thereon should be in strict conformity with the specimen
signatures supplied to the bank.

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 (ix) The bank reserves the right to refuse payment of cheques that have been altered
in any way, unless the alteration is authenticated under full signatures of the drawer.
(x) No extraneous matter should appear on the cheque otherwise it may be
dishonoured.
(xii) The bank will not be responsible if any post-dated cheque, i.e. bearing a date
subsequent to the date of its presentment, be inadvertently paid.
(xiii) Stale cheques, i.e. bearing a date over three months old to the date of
presentation, will not be paid.
(xiv) Constituents should see that the cheque books received by them bear their
prescribed covers and that the serial number of cheque forms indicated on those
covers is intact. Cheque books should be kept under lock and key and the
constituents should not allow other persons to use cheques from their books.
(xv) In the event of closing an account, the unused cheque forms should be returned
to the bank.

CHEQUE BOOK
Types of Chequebooks

:34
a) In Centralized Banking Solution (CBS), data is stored centrally at Data Centre, Delhi at
ITD-HO and is accessed by the branches in the CBS network (Service Outlets – SOL) for
providing various services to the customers. Under the CBS environment, the customer
has the option to operate his/her account from any CBS – service outlet all over the
24 7
country.
21
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b) With a view to extend quality service, Bank has introduced “Multicity Cheque” which
are payable at any of our branches / back offices.
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Issuance of CTS-2010 Compliant Personalised Cheque book (DBD CIR

NO.15/2017 Dated 03/03/2017)

C) In our Bank all Cheque Books Personalised or Non-personalised are supplied by

5

Printing & Stationery Department, Noida. Since April, 2011 our bank is issuing
CTS-2010 compliant cheque books to the branches. For ready reference of the field we
reiterate below the salient features of CTS-2010 compliant cheques:
• The word CTS-2010 is written along with the name of the printer placed vertical on
left hand side of cheque.
30

• In CTS-2010 Compliant Cheque, date field is in 8 cages.

• Name & Logo of the Bank with branch name and RTGS/NEFT/IFS code are
placed on top left side.
• Pantograph in grey-black colour with hidden/embedded word “VOID” just below
the account field on the left hand side corner in the size of 1x2 cms.
• These cheques would bear complete 9 digit branch specific sort code (City, Bank
and Branch MICR Code printed on MICR Line of the cheque).
All branches would maintain sufficient stock of CTS-2010 cheque –books only, for
issuing to their customers. Chequebook would be issued in customers’ accounts after
ensuring that 16 digit complete account number is legibly written/ stamped on every
cheque leaf

d) Branches would request the customers to bring in the branch, the unused
‘Non-multicity Chequebook’ in their possession, to get the Multicity Chequebook issued
in their account. The ‘Non-multicity Chequebook’, so surrendered shall be destroyed as
per procedure. The ‘Multicity Chequebook’ with generic code (‘000024000’), already

85 | P a g e
issued in Customers’ Accounts would continue to be valid and honoured on presentment
as per extant guidelines on payment of cheques.
e) Printing and Stationery Department would supply only the ‘Multicity Chequebook’, with
Name and Distinctive Number of branch printed thereon.
f) Stock of ‘Multicity Chequebook’ without Name and Distinctive No. of branch printed
thereon (chequebooks with generic code ‘000024000’) has to be destroyed as per laid
down procedures
g) All branches would place their indent to Printing and Stationery Department, HO, for
supply of various sizes of CTS-2010 compliant cheque -books, depending upon the
requirements of the branch. Old cheque books /(Non CTS will not be issued to
customers.

ISSUE OF CHEQUE BOOK

In our Bank all Cheque Books Personalised or Non-personalised are supplied by Printing
& Stationery Department, Noida. Since April, 2011 our bank is issuing CTS- 2010
compliant cheque books to the branches.

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General Instructions
(a) No branch shall issue cheque book in an account maintained at other branch.
(b) After account opening and verification, the cheque book can be issued to the
24 7
customer. Complete 16 digit account number must be written at designated place on all
21
the cheque leaves issued to the account holder.
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(c) It would be ensured that cheque books are delivered over the counters on request to
the depositor or his authorized representative, after observing the system and
procedures in this regard.
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(d) The stock of cheque books must be kept in the custody of two officers, one of whom
must be an Assistant Manager and, in his absence, an officer.
(e) The data relating to cheque book issued should be fed into the system and be
checked by an authorized officer and a printout is taken. This print out should be
5

compared with physical security, signed by the checking officer and preserved.
(f) Cheque Book issue Register is to be maintained manually, as it requires customers
signatures. However the cheque book details in computer be printed every month and
checked with the register maintained manually to ensure that no unauthorized data has
been entered in the system. Cheque book should not be issued without acknowledging
30

the letter of thanks sent to depositors.

(g) Cheque books are not to be issued in accounts which are not properly KYC
compliant.
(h) Branches would issue CTS-2010 cheque books having the name of the printer placed
vertical on left hand side of cheque.
(i) The history of returning of cheques should be verified while considering request for
issue of fresh Cheque Books, so that the incidence of cheque returns is reduced.
(k) While issuing Multi-city cheques to the customers, they must be advised that these
cheques should be used by them only for bona-fide remittances and not for making
money / profits by conducting commission agency business or otherwise.
(l) The account holders, who do not keep sufficient balance in their accounts and whose
cheques are frequently returned due to insufficiency of funds, cheque book should be
issued to such account holders only under the authority of Incumbent in-charge (in case
of ELBs/VLBs under the authority of Sr. Manager/Manager).
(m) Request for issue of bulk cheque-books would be entertained only in the accounts
which are more than one year old and are conducted satisfactorily.

86 | P a g e
(n) Every leaf of the cheque-book issued in a newly opened account would be branded
with a stamp ‘New Account’.
(q) Before parting with the custody of chequebook issued in customer account,
authorised official must ensure that;
• The cheque-book is issued by invoking relevant Menu Option in CBS (presently
• ‘ICHB’) and verified by the Authorised Official through Menu Option ‘ICHBAU’.
• Signatures of all the authorized signatories are uploaded and verified in the
system.
• 16 digit account number is clearly mentioned on all the cheque leaves.
Chequebook has Branch Name and Distinctive Number printed thereon

Procedure for issuing cheques

(a) Presently, cheques are issued to customers at base branch in the following ways:
i. Customer personally visits the base branch (i.e. at Branch, where customer has
opened his account)
ii. Representative of the customer visits the base branch, with latter’s authority letter for

:34
issuance of cheques.
iii. Customer sends his/her requisition to the base branch for sending the chequebook by
post
24 7
21
iv. Request for issue of cheques is received through internet banking.
ISSUE OF CHEQUES ON THE BASIS OF APPLICATION ON PLAIN PAPER
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Bona-fides of the person presenting the application should be ascertained by proper

enquiry/identification and Cheques should be issued, only on the orders of Incumbent
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In-charge / 2nd man, who should fully satisfy himself about authenticity of the request.
ISSUE OF CHEQUES ON THE BASIS OF REQUISITION SLIPS
New chequebook would ordinarily be issued only against written application by the
customer on Bank's prescribed requisition-slip. The requisition slip must be carefully
examined to see that it is out of the customer's ‘current lot of cheques’ by verifying the
5

signature of authorized official on the previous requisition slip.

When a requisition slip is presented by a messenger (authorised representative),
cheques should be issued only if he is known to the bank. On satisfying that the
chequebook may be issued to the messenger (authorised representative), chequebook
of smaller size (containing 10 cheque leaves) would be issued.
30

The customer would be advised on form No. PNB-119, through bank’s messenger or
through post (in no case through the messenger of the account holder, who takes
delivery of the cheque book), that bank has issued chequebook to his / her messenger
(authorised representative) and requested to acknowledge receipt of the issued
chequebook on the acknowledgement form available as a perforated part of PNB-119.

Procedure for Uploading Requisitions:

Customer can submit the request for issuance of personalized cheque book only at
his/her base branch.
(i) The authorized official will ensure that the customer has written the compete postal
address i.e., House No./Shop No., Floor No. Street name, City, Tehsil, District with
6 digit PIN code number etc. in the requisition slip and will verify the same from
address on record. All branches are advised to invariably ensure correct and
complete address of the customer along with 6 Digit Numeric Pin Code (Not
NULL OR 000000) in Finacle before uploading requests for personalized
cheque books.

87 | P a g e
 (ii) Telephone number, mobile phone number and email id (if any) of the customer be
also mentioned along with address to facilitate expeditious delivery of cheque
book through Registered / Speed Post to customer. The branch will ensure that
Cheque book facility flag is not set to “N” while opening the account. The flag is to
be set to “Y”.
(iii) The CTO will feed the requisition in the system immediately through Menu
option ‘CBSCHQBK’ Function (A).
(iv) The officer/supervisor will verify it through function V. Verification is to be done in
same Menu(CBSCHQBK) Function (V)

By giving account number and request date, the details filled as detailed in step V above
are displayed. System asks Verify (Y/N). The verifying officer will check all details before
verification in the system. By pressing key F4, the record is verified.
Other Instructions:
I. The requisition slip will be retained by the branch.
II. All the requisitions received in a day should invariably be entered and verified in
the CBS system on the same day. If left in the entered state, the data will not be

:34
captured at Printing & Stationer Deptt., at Noida. Therefore, verification of data is
must on the same day in the branches.
III. The requisitions uploaded by the branches will be downloaded in the evening by
24 7
Printing & Stationery Deptt., Noida.
21
IV. The cheque book will be received by the customer within 4 to 8 days from the date
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of uploading the request.

V. The personalized cheque books will be dispatched by Printing & Stationery
Deptt., Noida directly to customers at the 275 identified centres. The list is
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enclosed as Annexure.
VI. At centres other than above 275 centres, the personalized cheque books will be
sent directly to the concerned branch for onward delivery to the customer.
VII. In case the cheque book is not received by the customer at the desired address,
5

inquiries can also be made from CHBM menu in Finacle regarding date of issue of
cheque book from Printing & Stationery Deptt., Noida. The present status of
delivery of cheque book can be inquired from Printing & Stationery Deptt.,
Noida (Tel. No. 0120 4757610 Email id [email protected] ). In no case,
customer should be redirected to HO/Contact Centre/Ptg. &Stationery Deptt.,
30

Noida.PSD CIRCULAR NO: 04/2021 GENERIC EMAIL IDS AND PHONE

NUMBERS PERTAINING TO PRINTING & STATIONERY DEPARTMENT
VIII. The cheque book received back as undelivered due to wrong/incomplete
address/any other reason shall be entered in a register and be delivered against
receipt of signatures of customer.
IX. The branches must popularize these cheque books, due to its advantageous
features.
X. The request of the customers for personalized cheque book shall also be
entertained/accepted when received through internet.
XI. The requisition slip available in existing cheque book with the customer can also
be used. In this case the following undertaking be obtained from the customer:
XII. “Please send the cheque book at the registered address through
Regd./Speed post.”
XIII. Branches should preferably issue personalized cheque book centrally, but if
customer is in urgent need of the same, branch should issue non-personalised
cheque book across the counter after ensuring that:
1) Cheque book is being issued to the a/c holder with proper KYC.
88 | P a g e
 2) Every leaf of cheque book is branded with account number.
3) Details of cheque book are duly entered in the CBS system.
XIV. The cheque books not delivered by the Postal authorities due to any reason like
incomplete address etc. are returned to the respective branches. Branches should
immediately contact the customer and arrange for its delivery to him on proper
identification.

ISSUE OF CHEQUE BOOK TO VISUALLY IMPAIRED CUSTOMERS

Considering the fact that the blind persons / persons with low vision are legally
competent to contract, issuance of chequebook / cheque leaves may be permitted to the
visually impaired customers, as under:

(a) Accounts of visually impaired customers who can sign consistently

Where the Incumbent In charge is satisfied about the capacity of the visually impaired
customer with regard to satisfactory conduct of his / her account and that he / she signs

:34
consistently, he / she may be allowed to use chequebook / cheque leaves. Where
chequebook / cheque leaves is / are issued, the same should be marked with ordinary
crossing and the word ‘bearer’ substituted with ‘order’ so that the payees could be
24 7
traced. 21
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(b) Accounts of visually impaired customers who use thumb impression or

cannot sign consistently
The visually impaired customers, who put their thumb impression or cannot sign
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consistently, may also be allowed to open saving / Current / Overdraft Account with
cheque facility. However, the use of cheque facility will be limited for issuance of
cheques in favour of the specified payees for repayment of retail loans, payment of utility
bills, etc. On request, the cheque facility may also be provided in the existing accounts of
5

visually impaired persons for the above-mentioned purposes.

For cheques favouring financial institutions

(i) A letter of request duly witnessed by a literate person with no visual impairment, as per
existing procedures about witnessing, shall be obtained from the visually impaired
30

customer for issuance of cheques. A photocopy of the demand / sanction letter issued to
the customer by the financial institution concerned be also obtained and verified /
attested from the original one. The said letter of request along with the copy of demand /
sanction letter shall be preserved .The ‘requisition slip’ available in the chequebook shall
be detached there from, cancelled and attached with the letter of request.

For payment of utility bills, etc.

(i) On the specific request of the account holder, a few cheques in favour of each utility
providing organization / corporation (e.g. electricity / telephone / water department) may
be issued and the same procedure, as in the case of cheques issued in favour of
financial institutions (as mentioned in (i) above), should be followed for issuance of such
cheques. However, date and amount shall be left blank which shall be filled in by the
visually impaired person (account holder) at the time of issuance of cheque to the
beneficiary.

Procedure to be followed by the paying branch at the time of making payment

89 | P a g e
On presentment of cheques for payment at the issuing branch or any branch, the
passing official would verify the signature of the attesting official who verified the thumb
impression while issuing the cheques and pass the cheque if otherwise in order.
It may be noted that
(i) By issuance of cheque leaves or verification of signature (thumb impression)
thereon, the Bank does not undertake any liability to pay the cheque. The
payment of cheque depends upon the balance available in the account and its
apparent tenor when presented, and
(ii) Post-dated cheques (having regard to due dates of repayment of loan
amount) can be presented any time after that date until the same become stale.
Further, verification of the signature (thumb impression) is done only to facilitate
its acceptance especially in view of physical handicap of the customer.
Non-presence of the official, who verified the signature at the branch or his / her
ceasing to be in service on the date of presentment of cheque, does not matter.

Cash withdrawal by visually impaired customers

As hitherto, the visually impaired customer shall come in person in the branch where his

:34
/ her account is opened for withdrawal of cash from his / her account. Cash payment to a
visually impaired customer, however, should always be made in the presence of a
witness, who should also sign as such. The amount withdrawn should be confirmed to
24 7
the visually impaired customer orally.
21
Keeping in view the guidelines issued by IBA and also the security concerns that may
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arise due to presence of “third party witness”, we advise to take all necessary
precautions and safeguards while dealing with the visually impaired customers, ensuring
safety of the customer and bank, both.
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Branches should ensure that;

a) The “third party witness” should be KYC compliant customer of branch,
b) Presence of “third party witnesses” may not be insisted upon where customer does
not wish presence of outside witness. In such cases, the payment should be made in the
5

presence of bank employee/officer, preferably other than those who have processed the
related payment voucher. Both transaction verifying officer and witness-officer would
record the fact of customer objecting to third party witness, for record and future
reference.
30

Inter-SOL transactions in Customers’ Accounts

i) Under CBS Environment, transaction in an account can be committed at any of our
branches / back offices spread across the Country. All the branches are termed as
SOLs. Branch where account is maintained is referred to as ‘Parent SOL’ and
other branches are called the ‘Service SOLs’.
(ii) To facilitate transactions, bank has introduced ‘Multicity Cheque’. The multicity
cheque can be paid from any of the branches in CBS network across the counter.

Cash Payment in Customers’ Accounts at Service SOL (Branches should refer

guidelines issued from time to time by Integrated Risk Management Division, HO
for inter-SOL transactions in borrowal accounts,)

In order to give benefit of inter-SOL facility for genuine and needful purposes to the
customers and also to put in place checks and balances to discourage misuse for
fraudulent / money laundering and fund diversion purposes, following restrictions are
placed on cash payment in deposit accounts at a branch other than the ‘Parent SOL’:

90 | P a g e
(A) Tender of Withdrawal Form: Cash Payment against tender of withdrawal form would
not be made, even if the withdrawal form is tendered by the account holder with
passbook.
(B) Tender of Cheque out of the chequebook issued in the account:
(B.1) Account holders (including staff) will be allowed Inter-sol cash payment up to Rs
5.00 (five) lakh, per transaction, as under:
(i) In respect of accounts in the name of individual(s), proprietorship concerns,
transaction to be allowed to the account holder against cheque drawn favouring self.
(ii) In respect of Ltd. Companies, Govt Agencies, HUF and similar organizations,
transaction to be allowed against cheque drawn in favour of their representative, whose
identity should be explicit. (In case customers, for bona-fide business requirement,
desire higher amount of inter-sol cash payments at selected branches, Circle Head may
permit such higher limit to be utilized at specified branches, on case to case basis.
Branches would display following notice at a conspicuous place in the branch:

“Notice is hereby given to all the customers of the Bank that to safeguard their
interest, Single cash payment transaction in deposit accounts at Non Parent SOL

:34
or Non-Base Branch or other than Base branch, is restricted to Rs 5 lakh against
self-drawn cheques. Cash Payment to third party would be allowed at other than
the base Branch only in accounts where mobile number is recorded in the
account and is enabled for receiving SMS alerts, as detailed here under:”
24 7
21
-In Saving accounts upto Rs.50000/- in a day.-
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-In current accounts upto Rs.100000/- in a day.

Transfer Transactions
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Debit transfer transaction in a customer’s account can be initiated on the basis of

mandate received through a cheque drawn out of the cheque book issued in the account
or through an authority letter from the account holder.
The Transfer Vouchers are meant for branch use only and are not an instrument for use
5

by the customers for carrying out the transactions in their accounts.

The Inter-SOL transfer transaction /3rd party payment would be permitted as

under:
(A) Transaction on the basis of cheque
30

A.1 Such transactions involve two transactions, one in the account of the drawer of the
cheque and the other one in the account of the ‘Payee’ / ‘Endorsee’ of the cheque’.
A.2 these transactions would be entered either at the Drawer’s Account SOL or at
the ‘Payee’s Account SOL only. Thus the ‘Remote SOL’ (SOL which is not
maintaining account of the Drawer and the Payee / Endorsee, both) is not
ordinarily permitted to enter the transaction. . However, the remote SOL which is not
maintaining accounts of the drawer and the payee/endorsee may permit transactions
after DUE DILIGENCE in accounts where mobile number is recorded in the account and
is enabled for receiving SMS alerts, as detailed hereunder:
i) In Savings Fund Accounts:
- 3rd party cash payments up to a maximum of Rs.50, 000/- per day. Aggregate of
all inter-SOL cash payment transactions on a single day shall be ascertained by
the branch making the payment.
- Transfer Transactions up to a maximum of Rs.1, 00,000/- per day. Aggregate of
all inter-SOL transfer debits on a single day shall be ascertained by the branch
making the transactions.
ii) In Current Accounts:
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 - 3rd party cash payments up to a maximum of Rs.1, 00,000/- per day. Aggregate
of all inter-SOL cash payment transactions on a single day shall be ascertained by
the branch making the payment.
- Transfer Transactions up to a maximum of Rs.2, 00,000/-. Aggregate of all
inter-SOL transfer debits on a single day shall be ascertained by the branch
making the transactions.
Incumbent In-charge of the Remote SOL would be competent to take a decision
after observing the stipulated safeguards, systems and procedure and after exercising
DUE DILIGENCE and permit such transfer transactions in case customers for their
bona-fide business requirement request for the transaction.

Transaction on the basis of Authority Letter

1. Ordinarily, in accounts where chequebook is issued, the transaction involving debiting
of one account and crediting of another account is initiated against a cheque drawn in the
account to be debited.
2. In cases of accounts where chequebook is not issued and in exceptional cases, in
those accounts where cheque book is issued, the transfer transaction may be requested

:34
through an Authority Letter.
3. Where authority letter is presented, the transaction would be processed if;
(i) Such authority letter is presented by the authorised signatory / one of the authorised
24 7
signatories in the account. 21
(ii) In case of Savings Bank account, authority letter so presented by the account holder
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must accompany with the passbook.

These instructions would be applicable in case of accounts in the name of Staff

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Members, Single or Joint, also.

Clearing Transaction
There is no restriction with regard to Clearing Transaction in customers’ account at any
5

Service SOL. Hence, a cheque presented in debit clearing by other Bank may be debited
at the Service SOL. Similarly, a customer may deposit at any SOL a cheque drawn on
other bank for collection in his account.
Telephonic Confirmation of high value cheque from the account holder before
making payment of the Cheque in Clearing
30

In view of rise in cheque related frauds it has been decided that telephonic confirmation
may be obtained from the account holder for cheques of Rs.2.00 lac and above, which
are presented in physical form in clearing also at non-CTS Centres and a noting to this
effect be made invariably on the back of cheque leaf.
Regarding cheques presented in CTS clearing, the telephonic confirmation may be
obtained for cheques of Rs.5.00 lac and above, before passing. A record of such
telephonic conversation may be maintained in a separate register. (INSPECTION &
AUDIT DIVISION CIRCULAR NO. 27 /2018 dated 02.07.2018)

Inter SOL Transactions in Inoperative Accounts

(a) A Savings / Current Account is classified as ‘Inoperative Account’ if there is no
customer-induced transaction in the account for a period of 24 months. These accounts
are maintained separately under separate GL Head. The transactions in an Inoperative
Account should be authorized by the Incumbent-in charge/ authorized officer.
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(b) Inter-SOL transactions in inoperative accounts IS NOT PERMITTED.
(c) Whenever any transaction in Inoperative Account is attempted, ‘System’ will raise an
exception “Customer induced debit transaction to inoperative account” and the branch
initiating the inter-SOL transaction would come to know that the account being debited is
an inoperative account of other branch and should not allow transaction/ operation.

ACCOUNTS NOT PROPERLY CONDUCTED

a) When a customer does not conduct his account properly (e.g. when his cheques have
frequently to be returned for lack of funds, say on three occasions in a quarter) his
attention should be drawn to the fact by issuing a cautionary advice
b) If there is no improvement, 2ndcautionary advice would be issued to the account
holder.
c) If there is still no improvement, he should be directed to close his account within a
period of 30 days.
d) If there is neither an improvement in the account nor is the account closed within the
stipulated period, the account would be closed and the balance lying to the credit of

:34
account would be remitted to the account holder through ‘A/c Payee’ Banker Cheque/
Demand Draft, under cover of letter
e) The above instructions are applicable to deal with frequent dishonouring (for
24 7
want of sufficient balance in the account) of cheques of an amount of less than
21
Rs.25 lacs.
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PROCEDURE FOR RETURNING OF DISHONOURED CHEQUES

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Cheque received from other banks / sister branches in local clearing (Inward
Clearing)
(a) When a cheque is received by a branch in local clearing and dishonoured by it
for some reason, the in-charge of the Section, to whom the cheque relates, shall
5

ensure that the dishonoured cheque is entered in the Cheque Returned Register
under his full signature. He shall then hand over the dishonoured cheque along
with the duly signed and dated Cheque Returning Memo (PNB 113) giving therein
reasons for its dishonour to the in-charge of Clearing Section against latter’s
proper receipt, i.e., against his full signature with date. The in-charge of Clearing
30

Section shall ensure that the cheque is returned to the presenting bank on the
same day / next day when the clearing house meets for exchanging the returning.
In any case, he shall ensure that discipline prescribed for the clearing house in
terms of Uniform Regulations and Rules for Bankers’ Clearing Houses is fully
complied with.

Cheque received from branch’s own customers or sister branches / other banks
for collection in local clearing (Outward Clearing)
(a) When a branch presents a cheque in clearing either for its own customer or on
behalf of any sister branch / other bank and the cheque is returned unpaid, it
should be returned immediately to the customer / sister branch / bank concerned.
(b) Branch shall follow the under noted procedure for returning a dishonoured
cheque, as at (a) above, to the customer / sister branch / bank concerned:
(i) The Clearing Section SWO will mark dishonoring of the cheque in the Outward
Clearing Register against the relative entry and hand over the same to the
in-charge who, after verifying the same, shall hand it over to the in-charge of
the Section which deals with the corresponding credit of the cheque. For
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 example, if the cheque is deposited by a Current Account holder of the branch,
it should be handed over to the in-charge of Current Account Section and in
case the cheque is received from an outstation sister branch / other bank, it
should be handed over to the in-charge of Bills Section against latter’s proper
receipt.
(ii) The Section In-charge concerned shall ensure that the -
(a) Corresponding credit entry of the cheque made while sending it in
clearing is reversed and necessary noting is made against the relative
entry in the IDBC / IDD / LDD register, etc. in case the cheque has
been received from a sister branch / other bank;
(b) Cheque is entered in the Cheque Returned Register; and
(c) Cheque Returning Memo is appended to the dishonoured cheque
inaddition to the Cheque Returning Memo of the drawee bank.
(iii) Thereafter, the dishonoured cheque along with the duly signed Cheque
Returning Memo will be handed over to the In-charge of Dispatch Section
against latter’s proper receipt, for returning / dispatching the same to the
customer / collecting sister branch/bank concerned immediately

:34
Cheque received for in-house collection from branch’s own customers or from
sister branches / other banks
24 7
a) When a branch receives a cheque for in-house collection (i.e., a cheque drawn on an
21
account with the branch itself) from its own customer or from a sister branch / other bank
-20 52

and the cheque is dishonoured, for whatsoever reason, it should immediately be

returned to the customer or to the sender sister branch / other bank, as the case may be,
along with the Cheque Returning Memo.
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b) Branch shall adopt under noted procedure for returning a dishonoured cheque, as at
above, to the payee / sender outstation branch or the bank concerned:
(i) The SWO concerned will enter particulars of the dishonoured cheque in the
prescribed Cheque Returned Register, append a Cheque Returning Memo to the
5

cheque, giving reasons of its dishonour and hand over the same to the In-charge
who, after verifying the correctness of the reason for dishonour of the cheque, shall
put his full signature with date on the Cheque Returning Memo as well as in the
Cheque Returned Register. Thereafter, he shall act as under:
(ii) If the dishonoured cheque happens to be deposited by branch’s own customer, the
30

In-charge shall hand over the same along with Cheque Returning Memo to the
In-charge of the Dispatch Section against latter’s proper receipt, i.e., against his full
signature with date. The In-charge of Dispatch Section shall ensure that the
dishonoured cheque is returned / dispatched to the customer immediately.
(iii) If the dishonoured cheque happens to be received from an outstation branch /
bank, the In-charge will hand over the same along with Cheque Returning Memo
to the In-charge of Bills Section (IDBC, IDD, LDD, etc.) against latter’s proper receipt
as described above. The In-charge of Bills Section shall ensure that necessary noting
is made against the relative entry of the dishonoured cheque in the IDBC / IDD / LDD
register, etc. and then hand it over to the In-charge of Dispatch Section who will act
asdescribed above for returning the cheque to the sender branch / bank.

Outstation cheque sent for collection and received back dishonoured - Branch’s
Own customer or any other bank
a) When a cheque sent for collection to an outstation branch / bank is received back
dishonoured, the In-charge of section of ODBC / ODD / BD shall ensure that –

94 | P a g e
 (i) Necessary noting with regard to dishonour of cheque is made in the ODBC /
ODD / BD register etc. against the relative entry;
(ii) The cheque is entered in the Cheque Returned Register; and
(iii) The Bank’s own Cheque Returning Memo, in addition to that of the drawee bank,
is appended to the cheque giving reasons for its dishonour.
b) The In-charge will then hand over the dishonoured cheque along with duly signed
Cheque Returning Memo to the In-charge of Dispatch Section against latter’s proper
receipt, i.e., against his full signature with date for returning / dispatching it to the
customer / collecting bank immediately.

Cheques purchased by the Bank returned unpaid by the drawee bank

a) In terms of Section 138 of Negotiable Instruments Act, it is essential that the cheques
purchased by the Bank and sent for collection are endorsed by the payee / endorsee in
favour of the Bank. In case the instrument is not endorsed in Bank’s favour, the Bank
does not become a holder in due course and as such losses the right to sue in terms of
the said Section.

:34
b) As such, it must be ensured that the instruments (cheques, drafts, pay order, etc.) that
are purchased by the Bank, invariably bear endorsement of the original payee / last
endorsee, as the case may be, in favour of the Bank so that the Bank becomes a holder
24 7
in due course. 21
Cheques dishonoured for want of funds – Provisions in section 4 of the Banking
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Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act,

1988
a) Branches should return a cheque, which is dishonoured by them for want of sufficient
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funds, to the payee / holder / collecting bank or branch with the reason ‘funds insufficient’
or ‘exceeds arrangement’, mentioning the proper return code.
b) In terms of Section 4 of the Banking Public Financial Institutions and Negotiable
Instruments Laws (Amendment) Act, 1988, it has been provided that where any cheque
5

drawn by a person on an account maintained by him with a banker for payment of money
from out of that account for discharge in whole or in part of any debt or liability, is
returned by the bank unpaid, because of insufficiency of the amount of money standing
to the credit of the account or it exceeds the amount arranged to be paid from out of that
account, such person shall be deemed to have committed an offence and shall be
30

punished with imprisonment which may extend to one year or with fine, which may
extend to twice the amount of cheque or with both. These provisions are in force with
effect from 1stApril 1989.

DEALING WITH INCIDENCE OF FREQUENT DISHONOUR OF CHEQUES -

DETERRENT AND PUNITIVE MEASURES
a) With a view to enforce financial discipline amongst the customers in the matter of
dishonour of cheques for Rs.25 lakh and above for want of sufficient funds / exceeding
arrangement, the branches shall act as under:
(i) Ensure that while issuing a chequebook in newly opened / existing accounts (Current,
Savings Fund, Cash Credit, Overdraft, etc.), the following narration is printed on the
inside of its front cover and in case no such narration is printed thereon, the same be
branded therein with a rubber stamp till new cheque books with this narration printed
thereon are provided to them:
“It is open to the Bank not to issue fresh chequebook in the account or even to
consider closure of account / discontinuance of the credit facility at its discretion

95 | P a g e
 in the event of dishonour of one or more cheque(s) each for Rs.25 lakh and
above for want of sufficient funds on four occasions in a financial year.”
(ii) Display a notice at a conspicuous place in the premises as at a(i) above;
(iii) Ensure to put the under noted narration with a rubber stamp in the terms and
conditions of the various Account Opening Forms including PNB 1057 and PNB 1084,
in respect of current and savings fund accounts, and in Cash Credit / Overdraft
agreements, as the case may be, till the same is permanently incorporated in the
various AOFs / agreements:
“It is open to the Bank not to issue fresh chequebook in the account or even to
consider its closure / discontinuance of the credit facility at its discretion in the
event of frequent dishonour of cheques. The frequency of dishonour and
minimum amount of each such cheque(s) so dishonoured shall be as prescribed
by the Bank from time to time.”
(iv)Shall issue a cautionary advice on the prescribed format to the customer concerned if
such cheques are dishonoured on three occasions for insufficient funds / exceeding
arrangement in a financial year, informing that in case any cheque for Rs.25 lakh and

:34
above is dishonoured on the fourth occasion during the same financial year for the same
reason, the Bank shall not issue any fresh chequebook in the account and may even
consider closing the account / discontinuance of the credit facilities
24 7
21
PARTY-WISE RECORD MAINTENANCE OF DISHONOURED CHEQUES
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In order to ascertain the number of cheques dishonoured (each for Rs.25 lakh and above
in respect of constituents other than stock brokers and irrespective of the amount relating
to the stock brokers drawn in favour of stock exchanges) in a given financial year, the
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branches shall record the returning of cheques, as usual, in the Cheque Returned
Register chronologically and also keep a party-wise record of such cheques on a
separate register on the prescribed format.
INFORMATION ON DISHONOURED CHEQUES – MIS
5

a) Branches shall submit following statements on quarterly basis, as prescribed

relating to cheques dishonoured for want of sufficient funds to their Circle Office, as
th
the case may be, by 5 of every month succeeding the quarter to which it relates:
(i) Cheques drawn in favour of stock exchanges by the stock brokers irrespective of
amount;
30

(ii) Cheques for Rs.25 lakh and above drawn by parties / entities other than stock
brokers; and
(iii) Cheques for Rs.25 lakh and above where the payee is a borrower of the Bank.
b) Circle Office shall consolidate the information received from the branches (including
th
VLBs / ELBs) and shall send the same to Inspection and Audit Division, HO by the 10 of
the month succeeding the quarter to which it relates.
c) From the point of view of safeguarding the Bank’s interest, the Circle Offices shall
monitor such returning in terms of the guidelines contained in this circular and send
consolidated reports to Head Office on the prescribed format giving details of punitive
action / corrective measures taken, both in borrowal and non-borrowal accounts.
d) It may be noted that the information in respect of the cheques drawn by stock brokers
in favour of stock exchanges and returned unpaid due to insufficient funds is required to
be submitted irrespective of the amount. In other cases, the said information is to be
submitted in respect of cheques for Rs.25 lakh and above only.

96 | P a g e
AUTHORITY FOR DETERRENT / PUNITIVE ACTION AGAINST DEFAULTING
CUSTOMERS
a) The authority to withhold issuance of a fresh chequebook and exercising discretion for
losing a current / savings fund account, if four or more cheques each for Rs 25 lakh and
above are dishonoured for want of sufficient funds in a given financial year, shall vest
with the Incumbent In-charge of the branch.
b) In case of Cash Credit / Overdraft accounts, the issue relating to non-issuance of a
fresh chequebook as well as continuation or otherwise of the credit facilities due to
dishonour of cheques each of Rs.25 lakh and above on four occasions during a financial
year on account of “exceeding arrangement” shall be reviewed by an authority one step
higher than the sanctioning authority for a final decision. In case of CMD and MC
sanctions, however, such review may be done by the CMD while in case of Board
sanctions, by the Board.
STAFF ACCOUNTABILITY
a) Staff at all operational levels shall be held accountable for delay in dispatching /
returning a dishonoured cheque to the payee / holder / sender branch or the bank
concerned as per the above mentioned system.

:34
GENERAL
a) Incumbents In-charge should extend full co-operation for the purpose of adducing
24 7
evidence to prove the fact of dishonour of cheque on behalf of a complainant (i.e. payee
21
/ holder of a dishonoured cheque) in any proceeding relating to dishonoured cheque
-20 52

before a court, consumer forum or any other competent authority and should furnish him
documentary proof of the fact of dishonour of cheques.
b) In all the cases described as above, necessary charges as per the Bank’s rules shall
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be recovered whenever a cheque is returned dishonoured. Besides, in case such a

cheque happens to have been purchased / discounted, overdue interest as per the
Bank’s rules shall also be recovered.
5

INOPERATIVE ACCOUNT (It is clarified that in CBS, Inoperative Accounts are

known as ‘Dormant Accounts’) RLBD 32/2022 17.11.2022 (revised guidelines)

(i) Customer Induced Transaction: A transaction in any account is treated as

‘Customer Induced Transaction’ if it has been as a result of mandate from the account
30

holder.

(ii) In FINACLE Application, the classification of ‘Customer-induced Transaction’ and

‘Bank Induced Transaction’ is as under:

For the purpose of classifying an account as ‘inoperative’ both the type of transactions
i.e., debit as well as credit transactions induced at the instance of customers as well as
third party should be considered. However, the service charges levied by the bank or
interest credited by the bank should not be considered.

(iii)A Savings Fund as well as a Current Account would be treated as ‘Inoperative

Account’ if there is no ‘Customer Induced Transaction’ for a continuous period of
24 months.
In case any reply is given by the account holder giving the reasons for not operating the
account, banks should continue classifying the same as an operative account for
one more year within which period the account holder may be requested to operate the
account. However, in case the account holder still does not operate the same during the
97 | P a g e
extended period, banks should classify the same as inoperative account after the expiry
of the extended period.
(iv) ‘Inoperative Accounts’ would be segregated from the ‘Operative Accounts’ and
transferred to a separate ledger under General Ledger Head, ‘Inoperative – Others.
(v) Accounts which have been lying as ‘overdue fixed deposit’ for 24 months will be
transferred to the ‘Inoperative – others’ head in the General Ledger.
(vi)An ‘Inoperative Others’ Account would be classified as ‘Inoperative 10 years & above’
if it continues to be ‘Inoperative Others’ for a period of eight years.
(vii) ‘Inoperative 10 years & above’ accounts would be segregated from the list of
‘Inoperative Others Accounts’ and transferred to a separate ledger under General
Ledger Head, ‘Inoperative – 10 Years & above’. All unclaimed deposits outstanding for
10 years & above should also be reported to Reserve Bank of India in compliance with
Section 26 of Banking Regulation Act.
(viii) Reserve Bank of India vide their circular no. DBOD. No. DEAF Cell.BC.114/
30.01.002/2013-14 dated 27.05.2014 has directed the Banks that Bank shall calculate
the cumulative balances in all accounts (Inoperative Accounts 10 years &above and
amount remained unclaimed for more than 10 years) along with interest accrued, as on

:34
the day prior to the effective date, i.eMay 23, 2014 and such amounts due should be
transferred to the Depositor Education and Awareness Fund on June 30, 2014 (before
the close of banking hours). Subsequently, banks shall transfer to the Fund the amounts
24 7
becoming due in each calendar month (i.e. proceeds of the inoperative accounts and
21
balances remaining unclaimed for ten years or more) as specified in the Scheme and the
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interest accrued thereon on the last working day of the subsequent month.
(ix) The incumbents are advised that data base and all records e.g. AOFs, Specimen
Signature Slips, Ledger sheets, Registers, vouchers, balance books etc., of such
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inoperative accounts / unclaimed deposits viz. inoperative current and savings fund
accounts, Overdue Term Deposit Accounts, Inoperative Cash orders, Overdue Draft
Payable Accounts, Unclaimed Deposit entries lying in Sundry Deposit A/c etc. are
complete, segregated and properly maintained & kept safe with proper control measures
5

as per bank’s guidelines and that balances of such accounts are tallied.
(x) The amount of Stale Drafts / Cash Orders (not paid for a period of 3 months from the
date of issue) would not be transferred to ‘Inoperative Others’ / ‘Inoperative 10 years &
above’ Head. Such Drafts / Cash Orders will continue to outstand in the operative Draft /
Cash Order account but for the purpose of reporting, such Drafts / Cash Orders will be
30

reported in CBS System under appropriate heads – inoperative others / inoperative over
10 years & above.

Performing of the Activity for classifying the accounts

(i) Before an account is transferred to Inoperative category, the branch will intimate the
customer, at least 3 months in advance the date of transfer, consequences specifying
detail of penal charges and procedure for getting the account operative.
(ii) The process for classification of an account as Inoperative Others / Inoperative 10
years & above and transfer to ‘Inoperative Others’ / Inoperative 10 years & above’ Head
is customized in FINACLE Application. The activity for classification and transfer of
accounts as per above would be performed on quarterly basis in the month of January,
April, July and October every year. The process of transferring account to ‘Inoperative
Category’ is centralised in which status of account, GL Sub-head Code are changed and
signatures are transferred from ‘AL’ Category to ‘IN’ Category.
(iii) The ‘System’ will transfer the eligible accounts to inoperative category, create a
transaction debiting and crediting the account with the balance outstanding and generate
an account-wise report, which would be printed by the branches and examined by doing
98 | P a g e
sample checking to ensure that no Ineligible Account is classified as Inoperative’
Account. The checking official shall put his / her signatures in token of having
checked the report. The Report shall be preserved as per guidelines.
On transfer of account to Inoperative system will send a SMS to account holder at
the Mobile Number available on records with bank or a letter as per specimen
given below would be sent to the concerned account holder at the last known
address by Regd. Post.

Allowing Operations in Inoperative Accounts

(i) No transaction in ‘Inoperative Account’ of other branches would be allowed by a
‘Service SOL’. The system will raise an exception “Customer induced debit
transaction to inoperative account” and the branch initiating the intersol transaction
would come to know that the account being debited is an inoperative account of other
branch and should not allow transaction/ operation. Cheques presented in the account
would be returned by assigning Reason Code.
(ii) ‘Parent SOL’ may allow debit transaction in ‘Inoperative Account’ if the transaction

:34
is for closure of the account.
(iii) All other transactions would be permitted in the account only after the account has
been got transferred to ‘Operative Category’ by the Account Holder by making a request
24 7
in this regard and completing KYC requirements.
21
(iv) Funds, if any received for credit to an ‘Inoperative Account’ would be credited to
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‘Sundries – General’ and the account holder would be contacted with the request to
contact the branch for getting the account activated.
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General
(i) The Account Opening Forms and Specimen Signature Slips of the accounts
transferred to inoperative category are segregated and kept in the joint custody of
Manager and an authorised officer. Under computerized environment, Inoperative
5

account signatures are classified separately and access to such signatures is allowed in
a limited way. The general users are not able to see the signatures of inoperative
accounts. The right to view signature of inoperative account is restricted to authorized
officers.
(ii) Necessary safeguards are required for prevention of fraud in these accounts. Any
30

withdrawal or operation in such account should be authorized by the Incumbent-in

charge/ authorized officer only.
(iii) Payments are made in such accounts only when authorised in writing by the
custodians of the inoperative accounts and such withdrawals must be passed by both of
them, irrespective of the amount involved. The passing officers must exercise extra care
while passing withdrawals from inoperative accounts and in case of any doubt, the
depositor must be identified to their satisfaction. Part withdrawals from the credits to
inoperative accounts should be allowed only after the particular account has been
re-transferred to operative accounts. In case the balance of any account is sought to be
withdrawn in full, the operation may be allowed in the inoperative category and account
closed. Drafts and cash orders may be paid direct from the inoperative category when
presented, if otherwise in order and are properly revalidated. All related reports shall be
generated as and when required and preserved for future reference.
(iv) No standing instruction should be accepted for Dormant, inoperative account and
system will display memo pad thereby restricting the data entry.
(v) While transferring accounts from inoperative to operative category under the original
number, a day book voucher will be passed in the System by debiting the amount to
99 | P a g e
inoperative account and crediting it to the operative account, which will be authenticated
by a checking official under his signatures. The relative account opening form and
specimen signature slip will suitably be re-placed in the files and binders of operative
accounts.
(vi) An inoperative account should be subjected to the KYC procedures as and when any
transaction comes up and it is sought to be transferred to the operative category. No
service Charge for transfer of account to ‘Operative Category’ would be charged
in the account.
vii) The outstanding in the inoperative accounts are tallied as at the close of each
half-year, with the balances of "inoperative accounts (others)" and "inoperative accounts
(10 years or over)" in the general ledger.
(viii) Incidental charges will be applied to inoperative current and savings accounts and
interest will be allowed on savings accounts, as prescribed from time to time by Head
Office.
(ix) Branches shall make all out efforts on on-going basis, towards reduction in
inoperative accounts. There may be instances where depositor may have expired and
the legal representatives of the deceased may not be aware of existence of any account

:34
in his / her name
(x) With a view to reducing the number of accounts lying under Inoperative category,
including ‘Inoperative 10 years & above’ , Circle Offices shall constitute special teams of
24 7
dedicated staff at branch / station level for contacting the depositors for transferring their
21
accounts to operative category. Where depositor is not found residing at the recorded
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address, efforts should be made to enquire into the whereabouts of such depositors or
about their legal heirs / nominees.
(xi) The segregation of the inoperative accounts is from the point of view of reducing risk
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of frauds etc. However, the customer should not be inconvenienced in any way, just
because his account has become inoperative. The classification is there only to bring to
the attention of dealing staff, the increased risk in the account.
(xii) If the letter sent is returned undelivered, branch would immediately be put on enquiry
5

to find out the whereabouts of customers or their legal heirs in case they are deceased.
Account holder may be tried to be contacted telephonically, through e-mail in case his
telephone number / Cell number / e-mail address is available with the branch.
(xiii) In case the whereabouts of the customers are not traceable, contacting the persons
who had introduced the account holder, the employer / or any other person whose details
30

are available with the branch record should also be considered.

(xiv) Branches are instructed to pay ‘Simple’ interest on ‘Overdue Term Deposits’
at Savings Bank Rate of Interest for the period from due date or 22.08.2008,
whichever is later to the date of payment, where Fixed Deposit is not intended to
be renewed by the depositor.
Transfer of an Inoperative Account to Operative Category
a) When a customer-induced transaction happens on an inoperative account, system
raises an exception; such accounts shall then be transferred from inoperative to
operative category.
b) While transferring accounts from inoperative to operative category under the original
number, a day book voucher will be passed by debiting the amount to inoperative
account and crediting it to the operative account, which will be authenticated by a
checking official under his signatures. The relative account opening form and specimen
signature slip will suitably be re-placed in the files and binders of operative accounts.
c) An inoperative account should be subjected to the KYC procedures as and when any
transaction comes up and it is sought to be transferred to the operative category.

100 | P a g e
STANDING INSTRUCTIONS
a) Standing instructions should be accepted in all deposit accounts for payments like
insurance premium, taxes, rentals, etc. As per instructions of Reserve Bank of India,
acceptance of standing instructions in Pension Accounts for transfer of funds from the
account is admissible. No standing instruction should be accepted for Inoperative
account.
b) In the ‘Compensation Policy of Bank’, it is stipulated that Bank will carry out direct /
standing debit instruction of customer in time. In the event of Bank’s failing to meet such
commitment, customer will be compensated to the extent of financial loss incurred on
account of delay in carrying out the instruction, viz. loss of interest, cheque returning
charges.
c) If any instruction falls due on a holiday, it should be complied with on the immediate
preceding day.
d) Intimation of compliance/non-compliance of standing instructions should be sent to
customers immediately. If the amount is to be credited in another account at the branch,
the official initiating the debit will prepare the debit and credit advices. Similarly, if a draft
has to be sent, the same official will prepare the forwarding letter to the draft for onward

:34
transmission to the beneficiary. Whenever a standing instruction is not carried out
for any reason the account holder should be informed at once.
e) Instructions dependent upon the balance of an account or on the receipt of dividends,
24 7
etc., should also be recorded separately for review.
21
f) Customer's signatures on letters containing standing instructions to make periodical
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remittances, etc., must, on receipt, be verified and the letters acknowledged on form no.
PNB-450.
g) The documents relating to standing instructions i.e. addition, deletion, modification
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should be preserved in separate files.

h) The standing instructions file will be kept by the section incharge, who must ensure
that the system of recording and carrying out customer's instructions is such that no
instruction can be overlooked or duplicated in error.
5

i) The SWO will enter the details of standing instructions in the system / register and
authorized officer will verify and authenticate the same. The print out of the report
containing the details of standing instructions (i.e. Standing Instruction Register) should
be preserved / recorded. The report generated from the system regarding standing
instruction may be maintained date-wise in an era file.
30

j) The standing Instruction once noted in the computer system are executed
automatically on due dates at prescribed periodicity. This process is a part of “Day Begin
Activity” where vouchers are also printed by the system.
k) The authorized officer will ensure execution of the standing instructions at the time of
day begin or as instructed by the customer. Report of all standing instructions executed
must be generated and preserved alphabetically under the names of the account
holders, on daily basis.
l) The charges for standing instructions (Registration, execution, non-execution etc.), as
stipulated by Resource Mobilization Division (previously Resource Mobilization
Division), be recovered. Even if standing instruction is not put through for want of funds,
the prescribed charges are to be recovered.
m) If the transaction involves an upcountry Centre, remittance charges at the prescribed
rate and the actual postage shall be recovered additionally from the account from which
the amount is transferred
n) To exercise overall control, the incumbent In-charge/ assistant manager will examine
the standing instructions at the close of each month and verify that the standing
instructions falling due during the month have been duly complied with on due date(s).
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Also he will append a certificate, under his signature and date, on a separate sheet
attached at the end of the daily report in token of his having conducted the above
checking.
o) Care must be taken when an account is transferred to another office that all relative
standing instructions are passed on thereto for compliance after confirmation by the
customer.

DEATH, INSOLVENCY AND INSANITY OF A CUSTOMER

a) Notice or knowledge of the death, insolvency or insanity of a customer precludes the
bank from paying further cheques on his account even though these may be dated prior
to his death, insolvency or insanity. The fact, with the date and the source of information,
should be recorded in the relevant account in the system and authenticated by the
checking official. A note should also be made in the specimen signature slip.
b) Deceased accounts are required to be handled with care and caution. At the same
time there is an imperative need to avoid inconvenience and undue hardship to legal
heirs. As part of our drive towards efficient customer service steps should be taken to
ensure expeditious settlement of claim cases in deceased accounts. With a view to

:34
avoiding procedural difficulties in disposal of claim cases, steps may be initiated to
convert existing single accounts into joint accounts as also to register nomination in all
accounts, wherever permissible. All required guidance on ‘nomination’ and its
24 7
benefits be provided to the deposit account holder/locker hirers of the bank, as
21
per guidelines issued by the bank from time to time.
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c) Numerous complaints regarding delay and procedural difficulties in the disposal of

balances in deceased accounts in single names can be avoided by encouraging
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prospective account-holders to keep their deposit accounts in joint names with a

provision for payment of balance to the surviving co- account holder and to have
nominations registered. Efforts should be made to dispose of claim cases at the earliest.
d) In accounts, where nomination has been registered, settlement of claim should be
5

paid as per prescribed procedure.

PROHIBITORY AND ATTACHMENT ORDERS

a) Generally, bank receives attachment orders from Civil Courts and/or Income Tax
Authorities.
30

Under Section 226(3), I.T. Act, Income Tax Officer can attach any debts due which may
be payable at the time of attachment order or afterwards and also any amount
subsequently received. In view of this specific provision the attachment order
issued by the Income Tax Officer applies to the credit balances due or becoming
due and proceeds of instruments in collection when received.
b) Freezing/Seizure of account means that no money may be deposited or
withdrawn in the account.
c) Each order has to be perused as to its nature and effect and further action has to be
taken, accordingly.
d) The order received should be in writing and specific. If oral order is received, the order
issuing authority should be informed that only written order received in terms of any
provision of Law will be acted upon.
e) Genuineness of order received be verified. (For verification of the genuineness of
the Court Orders, Branches may follow the following procedure:
“When Succession Certificate / Letters of Administration / Probate are produced as proof
of Title, the genuineness of the document be checked up. If need be, Court records be
inspected personally or through a Counsel. If it is done personally, a report to that effect

102 | P a g e
be kept on record. If done by counsel, a report be obtained and kept on record. If the
order produced is not genuine, necessary FIR be filed. Where claim is settled on the
basis of Succession Certificate / Letters of Administration / Probate, indemnity/surety
need not be called for. A letter of request and certified copy issued by the court of the
Succession Certificate/Letters of Administration/Probate be kept on record.”
f) All such instructions received by the branches from DRI / IT / Customs / Excise / Court
or any other competent authority should be recorded in the relevant account in the
system. A record of all such orders received and action taken should be maintained in a
register. The original order should be kept in a separate file.
g) The account holder be immediately notified about the court order and a copy of the
order so received be provided, if requested for (cost of providing copy of the order would
be borne by the account holder).
h) The order so received would be effective for the period mentioned in the order. In case
no period is specified, the branch should write to such authority after every one year to
confirm its enforceability, until the order is satisfied or vacated.
i) Satisfaction or vacation of the order should also be recorded in the System as well as
in the relevant register (refer clause (f) above) and letter remitting the amount, order of

:34
vacation be kept in the file maintained for the purpose.
j) A prohibitory or attachment order issued by a Court or a Competent Govt. Department
affects a customer’s account only to the extent specified in the order.
24 7
k) If the attachment order specifies the amount to be attached, the balance, over and
21
above the amount to be attached, can be allowed to be withdrawn by the account holder.
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However, where the amount to be attached is not specified and the order refers generally
to debts due from the bank to the customer, the bank is prohibited from paying away any
credit outstanding balance in the customer’s account.
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The legal position of powers of the civil courts and Income Tax Authorities with
regard to issuing of attachment orders are as under:
i. In case of attachment orders issued by Civil Court, there is no obligation to pay the
5

cheques of the depositor up to the amount of the order. The attachment order applies to
all credit balances lying in SB/CA and FDRs which are due for payment in future. Even if
the customer has made request for withdrawal of the amount but the same has
not actually been paid to him, the order will apply to the amount held with the
bank.
30

ii. The attachment order issued by Civil Courts as per legal position is not applicable to
future credits coming in the account of the customer. Therefore, in case of attachment
order, future credits can be continued in the account. However, sometimes Courts are
also not appreciating this difference in their power of attachments. As such, every
attachment order and its scope should be examined to act within the framework of the
order issued. It is for the customer to agitate legal position before the Court/Authority for
its cancellation, modification etc.
iii. In case credit is afforded on the basis of instrument sent in clearing for
collection but instrument is received back as dishonoured, the attachment order
will not apply to such amount.
iv. If the instrument is received in clearing and though has been debited to the account
but not yet communicated to the presenter, the attachment order shall apply to such an
amount as the bank has not parted with the funds.

Effect of Attachment Order on Instruments sent for collection:

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Case 1 – Customer tenders a cheque for collection in the frozen / seized account
a) Customer be advised that transaction cannot be entertained in a frozen account.
However, if collection is insisted upon by the customer, it can be informed to the
customer that the amount collected cannot be collected to the frozen account and
therefore is to be kept in sundry account. The customer may take appropriate steps for
withdrawal/modification of the order. Entry should continue in the sundry account till the
freezing order is lifted.
(If amount so collected is credited to the account, the amount will also stand frozen.
However, if amount is kept in sundry, our customer will be at liberty to get this amount
transferred / credited to any other account, if in the meanwhile no direction is received.)

Case 2 – A customer tenders cheque for collection in local clearing. His account
is not frozen at this point of time. The instrument is lodged in outward clearing.
Before the cheque is released to shadow balance, the branch freezes the
customer account.
a) In case of freezing/seizure order in the account, there cannot be any debit/credit in the
account. Releasing of funds in the account under shadow is a process for completion of

:34
the transaction. As soon as the freeze / seizure instructions are issued, all the processes
involved in the transaction an account are suspended. Hence, the amount will be stored
in shadow status, to sundry account.
24 7
21
Case 3 - The customer account is frozen after the cheque has been released to
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shadow balance, which means that as at the time of freezing, the customer
account balance was partly clear and partly un-clear. The branch receives
returning of the cheque that was released to shadow balance.
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a) As clarified above, in case credit is afforded on the basis of instrument sent in clearing
for collection but instrument is received back as dishonoured, the attachment order will
not apply to such amount. Accordingly, the amount for the dishonoured cheque will be
debited to the account.
5

EVIDENCE IN COURT
a) Under the Bankers' Books Evidence Act, the bank is not compelled, unless by special
order of the court, to produce its books as evidence in any legal proceedings, to which it
is not a party. It is ordinarily sufficient for the bank to furnish relative extracts from its
30

books, duly certified by the incumbent in-charge in the following form:

“Certified that the above is a true copy of entry/entries in the ............ which is/are one of
the ordinary books of the bank, that such entry was/entries were made in usual and
ordinary course of business and that such book(s) is/are still in the custody of the bank.”
b) If the bank is summoned to give formal evidence to the income-tax authorities, the
customer should be notified that, unless steps are taken by him to have the summons
withdrawn, the bank will have to comply with it. If the summons is not withdrawn,
information should be supplied, as far as possible, in the form of a certified statement as
provided for under the Bankers' Books Evidence Act. This statement should be confined
to the particular information asked for and, should verbal evidence be insisted upon, it
must be given with the utmost caution.
c) The Information Technology Act, 2000 has come into force with effect from
17.10.2000. The IT Act has also made amendments to the Bankers' Book Evidence Act,
1891.
d) It is pertinent to mention that the definition "Bankers' Book", as amended includes the
ledgers, day-books, etc. used in the ordinary business of a bank kept not only in the
written form but also as printouts of data stored in a floppy, disc, tape or any other form of
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electro-magnetic data storage device. Further, "certified copy" means also the books of a
bank consisting of printouts of data stored in a floppy, disc, tape or any other
electro-magnetic data storage device, a printout of such entry, or a copy of such printout
together with such statements certified in accordance with the provisions of the Act.
e) The Act has prescribed the following certificates in case of the printout:
I. A certificate to the effect that it is a printout of such entry or a copy of such printout
by the principal accountant or branch manager; and
II. A certificate by a person in-charge of computer system containing a brief
description of the computer system and the particulars of the safeguards adopted
by the system to ensure that data is entered or any other operation performed
only by authorized persons;
III. The safeguards adopted to prevent and detect unauthorized change of data;
IV. The safeguards available to retrieve data that is lost due to systemic failure or any
other reasons;
V. The manner in which data is transferred from system to removable media like
floppies, disc, tapes or other electro-magnetic data storage devices;
VI. The mode of verification in order to ensure that data has been accurately

:34
transferred to such removable media;
VII. The mode of identification of such data storage devices;
VIII. The arrangements for the storage and custody of such storage devices;
24 7
IX. The safeguards to prevent and detect any tampering with the system;
21
X. Any other factor which will vouch for the integrity and accuracy of the system.
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f) A further certificate from the person in-charge of the computer system to the effect that
to the best of his knowledge and belief, such computer system operated properly at the
material time, he was provided with all the relevant data and the printout in question
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represents correctly, or is appropriately derived from, the relevant data."

g) Hence, in case a certified copy in the form of printout/copy of printout of a/cs or other
material from other books are furnished at the time of filing suit or as called for by any
order of court or of any authority, then the proforma of certificate(s) are as follows :
5

Certificate by Principal Accountant/Branch Manager

"Certified that the above a/c is a printout/a copy of the printout of entries of one of the
ordinary books of the bank.”
30

OFFICER MANAGER

105 | P a g e
INSPECTION OF RECORD BY INCOME TAX DEPARTMENT
a) Income tax officers have no powers to inspect all books of the branch. They can,
however, inspect the record of a particular assessee over whom the income tax officer
has jurisdiction, under section 133-A of the Income Tax Act, 1961.

OPERATION OF BANK ACCOUNTS BY OLD/ SICK/ INCAPACITATED

CUSTOMERS:
The cases of sick/old incapacitated account holders fall into following categories:
(a) An account holder who is too ill to sign a cheque and cannot be physically present in
the bank to withdraw money from his bank account but can put his/ her thumb impression
on the cheque/withdrawal form and
(b) An account holder who is not only unable to be physically present in the bank but is
also not even able to put his/her thumb impression on the cheque/ withdrawal form due
to certain physical defect/ incapacity.
With a view to enabling the old/sick account holders to operate their bank accounts, it is
advised to follow the procedure enumerated below: -
(i) Wherever thumb or toe impression of the sick/old incapacitated account holder is

:34
obtained, it should be identified by two witnesses having business relationship with the
bank, one of whom should be a bank official.
(II) Where the customer cannot even put his/her thumb impression and also would not be
24 7
able to be physically present in the bank, a mark can be obtained on the
21
cheque/withdrawal form, which should be identified by two witnesses having business
-20 52

relationship with the bank, one of whom should be a bank official.

("In terms of the General Clauses Act, the term "Sign" with its grammatical variations
and cognate expressions, shall with reference to a person who is unable to write his
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name, include "mark" with its grammatical variations and cognate expressions. There
must be physical contact between the person who is to sign and the signature or the
mark put on the document. Therefore, in the case of the person who has lost both
his hands, the signature can be by means of a mark. It could be the toe impression. It
5

can be by means of mark which anybody can put on behalf of the person who has to
sign, the mark being put by an instrument which has had a physical contact with the
person who has to sign.")
(iii) The customer may also be asked to indicate to the bank as to who would withdraw
the amount from the bank on the basis of cheque/withdrawal form as obtained above and
30

that person should be identified by two independent witnesses. The person who would
be actually drawing the money from the bank should be asked to furnish his signature.
The branches are advised to obtain a letter in respect of above.
(iv) The person concerned has to make some mark somehow in the cheque/withdrawal
slip for allowing operation in the account. On the very backside of the instrument on
which the person is giving the instruction by a mark, the independent witnesses can
confirm that the said mark was put up by the person concerned himself in their presence.
The bank official may visit the house/hospital, if necessary to identify the customer and
genuineness of the case.
A letter as suggested above can be taken at the time of making the payment to the
authorized person.

106 | P a g e
In this connection some queries may arise for which the clarification is given below for
the guidance of the branches:
Query No.1
Standardization of mark in the absence of thumb/toe impression should be made specific
and properly defined, as otherwise it could lead to avoidable complication and
uncertainties as, for instance, a customer may opt for taking impression of knee, elbow,
nose or ear etc.
Clarification
Regarding standardisation of mark in the absence of thumb/toe impression / keeping in
view the judgment of the Supreme Court. in AIR 1950 page 265, Law Division is of the
opinion that 'the person concerned has to make some mark somehow in the
cheque/withdrawal slip for allowing operation in the account. On the very backside of the
instrument on which the person is, giving the instruction by a mark, the independent
witnesses can confirm the said mark was put up by the person concerned himself in their
presence.

:34
Query No. 2
Whether, bank would get a valid discharge as against the account holder if payment is
made to some other person on account of the old/sick/incapacitated account holder.
24 7
Clarification 21
If the mark on the cheque/withdrawal slip in question is taken as stated herein above,
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bank would get a valid discharge as against the payments in question. In as much as his
marking is his signature.
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Query No. 3
Whether official will visit the customer at his house / hospitable?
Clarification
The bank official may visit the house/hospitable, if necessary to identify the customer
5

and genuineness of the case.

Query No. 4
Obtention of photograph of the authorized person, to whom payment is made on account
of the account holder concerned, should be prescribed.
30

Clarification
There is no necessity of getting the photographs of the authorized person to whom the
payment is made in a particular account. Instead of the photograph a letter as suggested
above can be taken at the time of making the payment to the authorized person.

Query No. 5
It is to be determined whether the facility could be made to Non-residents could be
excluded.
Clarification
When a facility is given to an account holder, bank cannot make a distinction between a
resident or non-resident of account holders.

107 | P a g e
OPENING AND ALLOWING OPERATION IN THE ACCOUNTS IN THE NAME OF
PERSONS WHO ARE MENTALLY ILL AND PERSONS SUFFERING FROM
DISABILITIES LIKE AUTISM, CEREBRAL PALSY, MENTAL RETARDATION AND
MULTIPLE DISABILITIES, UNDER GUARDIANSHIP, GUARDIAN APPOINTED
UNDER RELEVANT ACTS.

(i) Mental Health Act, 1987. The Act deals with persons who are mentally ill (persons
in need of treatment by reason of any mental disorder other than mental
retardation). Under the Act,where the mentally ill person is incapable of taking care of
himself, the Distt. Court or where a direction has been issued under the Act, the Collector
of the Distt may appoint any suitable person to be his guardian.

(ii) National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental
Retardation and Multiple Disabilities Act, 1999. (Act deals with persons suffering
from disabilities like Autism, Cerebral Palsy, Mental Retardation and Multiple
Disabilities). Under the Act, a parent of a person with disability or his relative, defined
under the Act, may make an application to the local level committee for appointment of

:34
any person of his choice to act as a guardian of persons with disability. Under the Act,
Local Level Committees can be constituted and they are also empowered to appoint
guardian under the Act.
24 7
21
The guidelines will be applicable to mentally handicapped persons, whether the person
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is minor or major.

Where guardian of a minor or major person, approaches the branch for

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opening/continuing to operate the account of such person, such accounts (savings/term

deposits and recurring deposit accounts only) may be opened/allowed to be
operated by the guardian appointed under the aforesaid Acts. The operational guidelines
in such cases will be same as are applicable for accounts opened in the name of minor
5

under guardianship.

The guardianship will continue (even after attaining the age of 18 years, in case of minor)
as long as the disability continues.
The guardian, appointed under any of the above Acts, will be asked to furnish once in a
30

year, a certificate from the appointing Authority that he/she continues to be guardian of
such person/s and has not been removed from the guardianship.

Opening / transfer of account of newly married girl- Customer identification

procedure under KYC guidelines

a) It has been observed that problems are being faced by married woman in providing of
identification / address proof documents while opening of new account or for changing
the pre-marital name and address in an existing account.

b) With a view to mitigate the hardships being faced by married woman and also to
provide guidelines to be followed by all the branches uniformly, list of various documents
that can be relied upon in dealing with the requests from newly married woman for
opening new account or modification in the existing account is provided hereunder.
However, Incumbents are advised that basic ‘KYC’ / ‘AML’ guidelines, that the
identification of the applicant is ensured beyond doubt, as contained in IAD circular no.
65/05 dated 30.12.2005, should not be compromised.
108 | P a g e
EXISTING ACCOUNT

A. Change in Address:
a) Where a change in address is sought in existing KYC compliant account, the same
may be acceded to on the basis of;
i. Her self-declaration; and
ii. Identity and Address proof of the groom supported by marriage certificate. In absence
of marriage certificate, notarized affidavit and clear photograph of the wedding where the
photo of the woman and her husband are shown together and the photo of the woman
matches with the photo on the pre-marital identification document available on bank’s
record.

B. Change in Name:
a) In case of change in surname
i. Her self-declaration requesting a change in surname and indicating her desire to
change the style / words of her signatures be obtained; and
ii. Marriage certificate issued by Magistrate. In absence of marriage certificate, notarized

:34
affidavit and clear photograph of the wedding where the photo of the woman and her
husband are shown together and the photo of the woman matches with the photo on the
pre-marital identification document available on Bank’s record; and
24 7
iii. Identification and address document of the husband where the family name matches
21
with that on the application to change in the pre-marital surname.
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iv. Where it is difficult to produce evidence of marriage, it is adequate if a confirmation of

change of name is provided on the letter of request, from duly respectable person well
known to the Bank.
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v. Fresh specimen signature mentioning the style of account is also obtained.

vi. Where the newly married woman is working in organized sector (corporate sector),
the employer’s certificate – about proof of residence, changed name / surname.
vii. Where the newly married woman is working in unorganized sector (home – maids,
5

etc.) declaration by the introducer of the account (introducer can be husband or any
other person having at least two years banking relationship with the bank) about the
address and changed name / surname.
b) In case of change in name in full, the procedure, as laid down in the extant law relating
to change of name, is to be adopted by the applicant woman.
30

OPENING A NEW ACCOUNT

In absence of any of the identification documents branches may rely upon;
i. Marriage certificate (which has been made legally compulsory now);
ii. In absence of marriage certificate, notarized affidavit and clear photograph of the
wedding where the photo of the woman and her husband are shown together and the
photograph of the woman matches with the photograph on the pre-marital identification
document available on Bank’s record;
iii. In case of non-availability of wedding photograph as at ii) above, marriage invitation
card with joint photograph (marriage photograph) of the bride and groom can be
obtained;
iv. Identity and address proof documents of the husband where family name matches
with that on the application;
v. Introduction from any respectable person in the locality known to the Bank
vi. Where the newly married woman is working in organized sector (corporate sector),
the employer’s certificate – about proof of residence, changed name / surname.

109 | P a g e
vii. Where the newly married woman is working in unorganized sector (home – maids,
etc.) declaration by the introducer of the account (introducer can be husband or any
other person having at least two years banking relationship with the bank) about the
address and changed name / surname.
viii. Upon opening of the account, letter of thanks be sent by the Registered Post with
Acknowledgement Due to the new account holder and the introducer. This would serve
as a confirmation of not only the introduction but also the correctness of the address
provided.

(Ref: IAD Cir No 32/2017)

CHEQUES LOST IN TRANSIT, CHEQUES SIGNED AS AUTHORISED SIGNATORY,

SAFE CUSTODY OF POST DATED CHEQUES, PROCESSING UNDER UV LAMP,
DEALING WITH FAKE CHEQUES AND ISSUANCE OF C.T.S CHEQUES (IAD Cir
45/2017)
DISHONOUR OF NON-CTS 2010 CHEQUES: “It is clarified that non CTS 2010 cheques
issued by our customers in their accounts shall continue to be honoured as per existing

:34
guidelines, TILL FURTHER INSTRUCTIONS.” However, Non CTS Cheque Books will
not be issued in any account.
Issuance of Cheque Books in Customers’ Accounts: Following guidelines are
24 7
followed meticulously: 21
I. While issuing chequebook to the customer, the complete account number be
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written / branded on each cheque leaf.

II. On presentment of a cheque for payment, in case any exception is raised by the
system, it should not be ignored and causes must be ascertained and due
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precautions be exercised before making payment/debiting the cheque.

Branches are further advised to display following notice in the branches:
“Customers are requested to verify that all cheque leaves in their possession bear the
complete 16-digit account number and in case it is not so, the complete account number
5

be immediately got filled up from the branch.”

PROCESSING OF CHEQUES UNDER ‘MAGNIFYING GLASS CUM UV LAMP’ / UV

ENABLED CHEQUE IMAGING SCANNERS:
All cheques of Rs.1,00,000/- & above, (drawn in our customers’ accounts) received
30

across the counter or through Clearing would invariably be processed through the
„Magnifying Glass and the ‘UV Lamp’ (Magnifying glass cum UV Lamp) by the
concerned official before processing / passing the cheques. In case of any suspicion,
cheques of lesser amount may also be scanned through the „Magnifying glass cum UV
lamp‟. The cheques would be honoured only after fully satisfying that the transaction is
supported by genuine instrument. Every care has to be taken that no genuine cheque is
rejected while complying with the aforesaid guidelines on processing of cheques through
UV Lamp. Wherever doubt arises, account holder should be contacted with best possible
communication and confirmation be obtained for issue of the cheque, so that genuine
cheque is not returned without sufficient reason.
In branches, which are members of clearing house/s functioning under „Cheque
Truncation System‟ (CTS clearing), all cheques irrespective of the amount would be
processed through “UV Enabled Cheque Imaging Scanners” before these are lodged in
clearing. The cheques imaging scanners provided to branches are equipped with UV
Scanner as well. The Circle Heads to ensure that necessary infrastructure is in place in
all branches under CTS system and the cheques imaging scanners provided to
branches are equipped with UV Scanner as well.
110 | P a g e
In CTS clearing, the original cheque remains in the custody of the Collecting Banker. As
the payment processing is done on the basis of images, the onus of due diligence shifts
to the Presenting Bank. The Incumbent In-charge of the branch has to ensure that norms
for KYC (Know Your Customer) are enforced in letter and spirit. The concerned officials
should observe all precautions which a prudent banker does under normal
circumstances, e.g. to check the apparent tenor of the instrument, physical feel of the
instrument, any tampering visible to the naked eye with reasonable care etc. In case of
doubt about the genuineness of the instrument, the presenting Bank must take up the
matter with the customer to ensure the legitimacy of the transaction being done.
It should be ensured that all cheques received by cheque processing Center
(CPC)/CDPC/Back Office) in respect of P2F items, irrespective of the amount, are
invariably processed through the „UV Lamp‟ before processing / passing these cheques.
In order to ensure meticulous compliance, a rubber stamp on back of all eligible cheques
that „It was scrutinized using „ Magnifying glass cum UV lamp‟ and found in order‟ be
affixed at source by the concerned official. The fact should also be authenticated with full
signatures or justifiable legible initials.
In case of any fraud, which could have been prevented had the cheque been processed

:34
through „Magnifying Glass cum UV Lamp‟, the Official(s) involved in the process of
cheque shall be held personally accountable.

Customers’ Accounts – Specimen Signatures – Allowing Operations in

24 7
21
Customers’ Accounts against Instruments Signed as Authorized Signatory/ies
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Executive Committee, vide its Resolution No. 3, meeting dated 23.07.2009, has
approved following modifications in the guidelines on issue of personalized cheque
books, obtaining of Specimen Signatures in customers‟ accounts and honouring of
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instruments / authority letters issued in the accounts:

a) Issuing of cheque books from Back Office (wherever applicable):

(i) Back office would issue Personalized cheque books in customers‟ accounts,
5

in the name of Organizations, viz, Firms, Companies, Societies, etc. and in

other Fiduciary Accounts, with following text printed in the space meant for
putting signatures by the persons authorized in this regard;

For XXXXXXX;
30

(Name of the Firm / Company / Society / Trust / HUF, Etc., as appearing in the
account)

Authorised Signatory (ies)

b) Specimen Signature Slips – Existing Accounts

(i) In existing accounts, the Specimen Signatures already held (with Designation
of the authorised signatory/ies) would continue to be in force, until the same are
desired to be modified by the customer.

c) Specimen Signature Slips – New Accounts

(i) In new accounts, Specimen Signatures would be obtained with words
“Authorised Signatory/ies;

For example;
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 (i) For The Sports Trading Company

A.B.
Authorised Signatory/ies

d) Drawing of cheques / issuing of Authority letter in the account – Existing Accounts

(i) Existing customers may issue Authority Letter / non-personalised
cheques, already in their possession / fresh chequebooks got issued
from the branch, by putting Rubber Stamp, either with designation of
the authorised signatory (Sole proprietor/partner/director, etc, as at
present) or with words, “Authorsed Signatory/ies
(ii) Personalised cheques would not require affixing of any Rubber Stamp,
as the name of account and the words, “Authorised Signatory/ies would
already be printed thereon.
e) Drawing of cheques / issuing of Authority letter in the account – New Accounts In
new accounts, customers would be advised to issue authority letter / cheques as
per the specimen signatures provided to the Bank, i.e. with words “Authorised

:34
Signatory/ies”. However, if any cheque / authority letter is issued with designation
of the authorised signatory, the same would not be dishonoured, merely for the
reason that Designation instead of word “Authorised Signatory” has been
24 7
mentioned on the cheque. 21
f) Honouring of authority letters / Cheques presented at branches or at Back Offices
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(i) While processing the cheque presented in the account, authorised official
would verify the „signatures‟ on the authority letter / cheque with of the „specimen
of signature‟ of person authorised to operate the account available on records,
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and verify the transaction as per the Mandate / Operational Instructions in the
account.
Other operational guidelines on processing / verification of transactions in
customers account would remain the same.
5

Branches are advised to note that the specific mandate / mode of operation of the
account, given in the Account Opening Form, as modified from time to time, are
invariably uploaded in the „System‟, explicitly and clearly, so that no legitimate
transaction in an account is refused and no illegitimate transaction is honored.
30

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FRAUD PREVENTION MEASURES-DEALING WITH FAKE CHEQUES

Collection of Cheques: Branches should check the physical feel of the instrument and
see that the instrument does not feel differently than others in the similar category.
During the touch & feel of the instrument, if the quality of the paper and/or printing
thereon is suspected to be of inferior quality or appears to be doubtful, collecting branch
should exercise due care and diligence by verifying the customer’s details and
transaction history of the account and consider presenting such cheque only after
satisfying itself.
Under CTS system while scanning, the capture system sometimes may reject all MICR
fields. This may be due to an alert that the cheque is fraudulently printed/photocopy.
Such cheque should be rescanned and if on rescanning also all MICR fields are rejected,
user instead of routinely repairing all rejected MICR fields manually should refer the
matter to incumbent in charge. The incumbent in charge must carry out due diligence on
the intended transaction and only after being fully satisfied should permit in writing
manual repair of MICR fields rejected by the capture system.
In case of any doubt i.e situations where the dealings of the customer are such as to

:34
create suspicion in the given circumstances, make necessary enquiries. While doing so,
the amount of cheque, the history of the account in which given cheque is to be collected,
the antecedents of the customer and relationship between payee customer and drawer
24 7
should be taken into consideration. 21
All cheques of Rs.1,00,000/- & above, (drawn in our customers’accounts) received
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across the counter or through Clearing would invariably be processed through

the Magnifying Glass and the UV Lamp (Magnifying glass cum UV Lamp) by the
concerned official before processing / passing the cheques.
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UV Lamp should be used for scrutiny of high value cheques to check such high order
forgeries/ alterations over cheque.
“Magnifying Glass cum UV Lamp” should be provided on every desk dealing with
5

Cheque Payments / lodging of cheques for collection as a “fixed feature‟ to detect

any material alteration on the cheques.
In branches, which are members of clearing house/s functioning under “Cheque
Truncation System‟ (CTS clearing), all cheques irrespective of the amount would
be processed through “UV Enabled Cheque Imaging Scanners” before these are
30

lodged in clearing.

Payment of Altered/Fake Cheques: Passing Official should examine carefully the

Font Size and style or writing of the payee name vis-à-vis other particulars of the cheque.
If on examination, the cheque creates suspicion of fraud, forgery, tampering or
destruction of the instrument, the paying branch/processing center must demand the
physical cheque of the truncated cheque for verification if the instrument is presented
through clearing. Any apparent alteration in the account number and cheque number be
examined carefully.
RBI has issued the guidelines on prohibiting alterations/corrections on cheques, which
state as under: “No changes / corrections should be carried out on the cheques (other
than for date validation purposes, if required). For any change in the payee’s name,
courtesy amount (amount in figures) or legal amount (amount in words), etc., fresh
cheque forms should be used by customers. This would help banks to identify and
control fraudulent alterations.”
The signatures should be examined more carefully in case of high value cheques and
cheques in favor of individuals and little known firms, companies.
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The back of the cheque be also examined especially in view of any writings on the back
of the cheques and endorsements thereon.
The exceptions raised by the system during passing of cheques should be dealt with due
diligence and not merely overruled in a routine manner. In case of high value cheques,
the user should carefully examine the image of the cheque for verifying the font size of
the payee name vis-à-vis other particulars on the cheque.
Reporting of fraud where Altered/ Fake cheque has been encashed
In case of collection of altered / fake cheque involving two or more branches, the branch
where the altered / fake cheque has been encashed, should report the fraud to
controlling office.
In the event of an altered / fake cheque having been paid / encashed involving two or
more branches, there could be a possibility of dispute /difference of opinion as to
whether the branch where the drawer of the cheque maintains the account or the branch
where the encashment has taken place should report the matter to the controlling offices.
In such cases also the branch which has released the payment against an altered / fake
cheque should report the fraud to the controlling office.
In this context, we reiterate need for strict compliance of the laid down systems and

:34
procedures, to avoid occurrence/recurrence of the instances of loss events and advise
Incumbents of all offices engaged in processing of cheques to ensure that:
24 7
(a) Extraordinary care is taken while accepting high value cheques in newly opened
21
Savings/ Current accounts / accounts of low networth customers like private security
-20 52

guards, daily workers, courier boys, etc. History & nature of transactions in these
accounts to be checked to study the pattern of their operation.
(b) Originating source of funds should be checked up with i.e. branch/bank from where
-11 216

the money is coming.

(c) Before making any cash payment, it should be ensured that there are no abnormal
transactions in the account and source of high value credit is checked beyond doubt.
(d) With regard to clearing of cheque, in case of high value cheques collecting branch
5

should ensure its genuineness whether all security features are there in the cheque in
question as per Printing & Stationery Department vide circular no 07/2015 dated
20.10.2015.

GUIDELINES FOR SAFE CUSTODY OF POST DATED / ADVANCE CHEQUES: The

30

guidelines for Safe custody of Post Dated /Advance Cheques as also taking of legal
action under Section 138 of Negotiable Instruments Act, contained in aforesaid IAD
circular are reiterated hereunder:
i) Advance cheques given by the borrowers be kept in a separate envelope
(account-wise) in joint custody of Loans In-charge and the Incumbent
Incharge/Second man in case of ELB / VLB branches. These cheques shall be drawn
favoring “Punjab National Bank”; and on the reverse of the cheques, “Payment of
instalment in Loan Account No___________” be also mentioned.
ii) In case cheque/s is/are dishonoured/returned unpaid, the same be immediately
brought to the notice of the borrower, as per proforma available at Annexure. If
payment is still not forthcoming, legal action may be taken against the borrower within
the stipulated time under Section 138 of Negotiable Instruments Act (Given Below).
iii) The procedure for safe custody of Advance cheques received should also be
followed for Returned cheques.
Section 138 of Negotiable Instruments Act provides as under
Where any cheque drawn by a person on an account maintained by him with a banker for
payment of any amount of money to another person from out of that account for the
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discharge, in whole or in part, of any debt or other liability,is returned by the bank unpaid,
either because of the amount of money standing to the credit of that account is
insufficient to honour the cheque or that it exceeds the amount arranged to be paid from
that account by an agreement made with that bank, such person shall be deemed to
have committed an offence and shall without prejudice to any other provisions of this Act,
be punished with imprisonment for a term which may extend to two years, or with fine
which may extend to twice the amount of the cheque, or with both:

Provided that nothing contained in this section shall apply unless:-

a) The cheque has been presented to the bank within a period of three months from the
date on which it is drawn or within the period of its validity, whichever is earlier.
b) The payee or the holder in due course of the cheque, as the case may be, makes a
demand for the payment of the said amount of money by giving a notice, in writing, to
the drawer, of the cheque, within thirty days of the receipt of information by him from
the bank regarding the return of the cheques as unpaid, and
c) The drawer of such cheque fails to make the payment of the said amount of money to
the payee or, as the case may be, to the holder in due course of the cheque, within

:34
fifteen days of the receipt of the said notice. Explanation: For the purpose of this
section, “debt or other liability”, means a legally enforceable debt or other liability.

Cheques / Instruments lost in transit / in clearing process or at paying bank’s

24 7
branch
21
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In the matter of cheques / instruments lost in transit or clearing process, the Reserve
Bank of India has framed the following guidelines for implementation by the banks:
(a) In respect of cheques lost in transit or in the clearing process or at the paying bank’s
-11 216

branch, the bank should immediately bring the same to the notice of the account holder
so that the account holder can inform the drawer to record stop payment and also take
care that other cheques issued by him are not dishonoured due to non-credit of the
amount of the lost cheques / instruments.
5

(b) The onus of such loss lies with the collecting banker and not the account holder.
(c) The banks should reimburse the account holder related expenses for obtaining
duplicate instruments and also interest for reasonable delays occurred in obtaining the
same.
(d) If the cheque / instrument has been lost at the paying bank’s branch, the collecting
30

banker should have a right to recover the amount reimbursed to the customer for the loss
of the cheque / instrument from the paying banker.
All the Incumbents In-charge are, therefore, advised to ensure that utmost care is taken
while handling the instruments tendered by the customers for collection as well as
received for payment in clearing / collection so that the same do not get misplaced, for
any reason, in the branch premises. The proper handling of these instruments, as per the
guidelines, not only ensures safety of the same but also helps avoid any sort of
harassment to the customers in procuring duplicate thereof apart from financial /
reputational loss to the Bank.

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NOMINATION AND CLAIM CASES(LAW DIVISION 04/2023)
a) The Central Government framed, in consultation with the Reserve Bank of India, the
Banking Companies (Nomination) Rules, 1985. These Rules, together with the provision
of new Sections 45ZA to 45ZF of the Banking Regulation Act, 1949 regarding nomination
facilities, were brought into force with effect from 1985.

The Banking Companies (Nomination) Rules, 1985 provide for:-

(i) Nomination Forms for deposit accounts, articles kept in safe custody and contents of
safety lockers.
(ii) Forms for cancellation and variation of the nominations.
(iii) Registration of Nominations and cancellation and variation of nominations, and
(iv) Matters related to the above.

b) Deceased Customers’ Accounts are required to be handled with care and caution. At
the same time there is an imperative need to avoid inconvenience and undue hardship to
legal heirs.
To avoid procedural difficulties involved in the disposal of claim cases in the

:34
absence of nomination, the existing as well as prospective customers must be
encouraged to make nominations in their deposit accounts, for articles kept in
safe custody and safe deposit vaults (Lockers). All required guidance on
‘nomination’ and its benefits should be provided to the deposit account
24 7
21
holders/locker hirers of the bank, as per guidelines issued by the bank from time
-20 52

to time.

b (i) As per delegation of powers, the Branch Manager / Officer In charge of the
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Section has full powers to sanction the payment of deposit / delivery / release of the
articles kept in safe custody / locker, on the basis of nomination, to the nominee.

b (ii) The payment of the balance in the deposit account to the nominee of a deceased
5

deposit account holder represents a valid discharge of the bank's liability provided:

- Due care and caution has been exercised in establishing the identity of the
survivor(s) / nominee and the fact of death of the account holder, through
appropriate documentary evidence;
30

- There is no order from the competent court restraining the bank from making the
payment from the account of the deceased; and
- It has been made clear to the survivor(s) / nominee that he would be receiving the
payment from the bank as a trustee of the legal heirs of the deceased depositor,
i.e., such payment to him shall not affect the right or claim which any person may
have against the survivor(s) / nominee to whom the payment is made.

b (iii) It may be noted that since payment made to the survivor(s) / nominee, subject to
the foregoing conditions, would constitute a full discharge of the bank's liability,
production of succession certificate, letter of administration or probate etc. or obtaining of
indemnity or surety from the nominee, irrespective of the amount standing to the credit of
the deceased account holder should not be insisted upon.

b (iv) The Bank is to obtain a death certificate or any other proof of death, acceptable to
the bank. The bank has to establish nominee’s identity before dealing with nominee.
Nominee should be asked to fill up claim format (PNB 831) for establishing his identity,
duly certified by:-
116 | P a g e
 - Magistrate of judicial officer or
- An officer of central or state govt. or
- A bank officer or
- Two reputed persons acceptable to the bank.

Letter of request from the nominee (PNB – 831) and death certificate produced should
be kept on record. Unused cheque leaves issued in the account would be destroyed &
recorded in the System as per procedure in this regard. Payment of balance with up to
date interest shall be made to the nominee by closing the deceased depositor’s account.
Related pass book shall be updated and handed over to the nominee with remarks,
‘Account Closed by settlement of claim and payment made to Shri / Ms, Nominee’.

b (v) It should be made clear to the nominee that payment is made to him only as a
trustee of the legal heirs/legatee(s) of the deceased account holder i.e. such payment
given to him shall not affect the right or claim which any person may have for that money.

:34
c) Nomination facility is intended for individuals including a sole proprietary concern.

d) Nomination is a rule, rather than an exception. It should generally be insisted that all
24 7
the existing as well as prospective account holders make nomination in their deposit
21
accounts, for articles kept in safe custody and safe deposit vaults (lockers), whether held
-20 52

in single name or jointly with other individual/s.

e) While making nomination, cancellation or change thereof, it is not required to be

-11 216

attested by witnesses. However, in case of thumb impression of the account holders is

obtained on nomination forms, this requires to be attested by two witnesses. The
signatures of the account holders are rather to be verified by the Authorized Official to
place on record that the nomination has been made by the depositor only. Making
5

nomination / cancellation of nomination / variation in nomination must be signed by all

the account holders.

f) The nomination can be made in favour of only one individual, irrespective of the fact
that the account is in joint name.
30

g) Where the nominee is a minor, the depositor, or all the depositors together, shall,
while making the nomination, appoint another individual, not being a minor, to receive
the amount of the deposit on behalf of the nominee in the event of the death of the
depositor or, as the case may be, all the depositors during the minority of the nominee.

h) Where the customer himself prefers not to avail the facility of nomination, the fact of
his / her refusal for availing Nomination facility would be recorded in the Account
Opening Form(AOF) (relevant option available in the AOF). The customer would be
explained the advantages of nomination facility. If he / she still chooses not to make a
nomination, he / she will be asked to give letter to this effect.
i) Nomination facility is also available for Savings Bank Account opened for credit of
pension.
j) The relevant rules relating to nomination in a deposit made in the name of a minor are
as under:

117 | P a g e
 i. As per Banking Companies (Nomination) Rules, 1985, in respect of deposit
accounts in the name of minor, nomination shall be made by a person lawfully
entitled to act on behalf of minor.
ii. Opening of account by the minor of the age 10 years & above cannot be
extended to mean that he can be allowed to register nomination.
iii. The person ‘Lawfully entitled to act’ on behalf of minor has to be looked into as
per faith / religion to which the minor is subject.
iv. In all cases, the guardian appointed by Court are persons lawfully entitled to act
on behalf of minor.
v. On minor’s attaining majority, he / she can register fresh nomination.

k) A nomination, cancellation of nomination or variation of nomination may be made as

aforesaid at any time during which the deposit is held by the Branch to the credit of the
depositor or depositors, as the case may be. A nomination or cancellation of nomination
or variation of nomination does not cease to be in force merely by reason of the renewal
of the deposit.

:34
l) Branch must put a rubber stamp on the pass book/Term deposit receipt indicating
"Nomination Registered". However, name of the nominee should not be disclosed.

m) Reserve Bank of India has further advised that in addition to the legend “Nomination
24 7
21
Registered”, banks should also indicate the name of the Nominee in the Pass
-20 52

Books / Statement of Accounts / FDRs, in case the customer is agreeable to the

same.
-11 216

n) Details of different forms prescribed for registering nominations, cancellation or

variation thereof relating to Articles in Safe Custody and in respect of safe Deposit
Lockers are detailed in the respective chapters.
5

o) The various forms prescribed for acceptance/ cancellation/ variation in Nomination

have been allotted permanent form numbers under PNB series and are supplied by
Printing & Stationery Department under Form Number PNB-819-A to 819-C; 820-A to
820-C; and 821-A to 821-E.
30

Settlement of claims in the absence of ‘Nomination’ and / or ‘Survivorship’

mandate.
In such cases, the claimant(s) should be asked to submit claim form (PNB 46-47) duly
filled in along with death certificate and other required / supporting documents / papers.
A format of the receipt to be obtained from the claimant(s) in respect of deposit
accounts is given at Annexure IV-2(Law Div. Cir. No.8/Law/2022 dt.31.03.2022).
This be suitably modified in the case of lockers and safe custody articles.

Legal representation
No lower or upper limit has been prescribed by the bank, with regard to the value of
claim, for the purpose of settlement of claims, without the production of Succession
Certificate, Letter of Administration, etc.
Therefore, if the Incumbent-in-charge is satisfied that the legal heirs are identifiable and
that there is no dispute amongst them in respect of the claim, there is no necessity for
production of legal representation. The claim can be settled on the basis of Indemnity
Bond with surety to the satisfaction of the sanctioning authority.
118 | P a g e
However, in case there is any dispute amongst the legal heirs or all the legal heirs do not
join in settlement of the claim and / or in indemnifying the bank or in any other case
where there is reasonable doubt about the veracity of the claimant(s) of their being the
only legal heir(s) of the deceased customer, Succession Certificate may be asked for
from the claimants.

Wills, Probates, Letters of Administration

Probates, Letters of administration, Succession Certificates, court orders appointing
Receivers, etc. as and when submitted to the bank must be carefully examined.
Under Section 273 of the Indian Succession Act probates and letters of
administration have effect over all the property and estate, movable and immovable, of
the deceased throughout the State in which these are granted. These probates/letters
of administration do not have effect outside the State unless these are granted (a) by a
High Court, or (b) by a District Judge, where the deceased, at the time of his death, had
a fixed place of abode within the jurisdiction of the Judge and the Judge certifies that the
value of the property and estate beyond the limits of the State does not exceed
Rs.10,000/-.

:34
These provisions do not apply to Succession Certificate which will have effect
throughout India (Section 380 of the Indian Succession Act, 1925).

Legally established title – Verification of Succession Certificate /Letters of

24 7
Administration / Probate
21
-20 52

When Succession Certificate / Letters of Administration / Probate is produced as proof of

Title, the genuineness of the document be checked. If need be, Court records be
inspected personally or through a Counsel. Where claim is settled on the basis of
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Succession Certificate /Letters of Administration / Probate, indemnity / surety need not

be obtained. A letter of request and certified copy of the Succession Certificate / Letters
of Administration / Probate issued by the court be kept on record.
5

Claim based on ‘Will’

In case the deceased customer has left a “Will”, the branch may ask for probate of the
“Will”. However, if that is not feasible and if the facts are not complicated, all the legal
heirs may be asked to confirm the genuineness of the Will and that they (legal heirs)
have no objection for settling of the claim in terms of the Will by executing a suitable
30

declaration duly attested by notary or magistrate. While examining the “Will” it be

checked up whether the “Will” has been attested by at least two witnesses. Copy of the
“Will” submitted by the claimant(s) be verified with the original and the fact of such
verification with the original be recorded on the copy and the original “Will” be returned
against proper acknowledgment signed by the legatee i.e. the person in whose favour
the “Will” has been executed. While examining a “Will” submitted in support of the claim,
the following aspects be also taken care of:-
- Find out who is / are the legatee(s) under the “Will”entitled to the claim.
- An affidavit of the attesting witnesses, affirming that the “Will”was executed in their
presence by the deceased while he/she was in sound mind and with free will
without any coercion or undue influence, be obtained and kept on record.
- An affidavit from the claimant(s) be obtained and kept on record to the effect that
the “Will”submitted and relied upon in support of his /their claim is the last “Will”of
the deceased and that no litigation challenging the “Will”is pending in any court.

Power of Attorney

119 | P a g e
If all the legal heirs are not able to join for receiving the payment of the deposit /delivery
of articles, such of them who cannot join, may execute Power of Attorney (POA) in favour
of one of the legal heirs / claimants on the format as per ANNEXURE-V (for deposit
accounts) and ANNEXURE-VI (for lockers)
The PoA should be duly stamped and attested by Notary / Magistrate. Any modifications
in the format, if required, may be got done in consultation with local Counsel / Law Officer
at the Circle Office / FGMO.
The PoA executed abroad, should be attested by the official authorized at the Indian
Consulate or High Commission, as the case may be, of that country. The provisions of
the Diplomatic & Consular Officers (Oaths & Fees) Act, 1948 enable diplomatic or
consular officer to attest/to do all notarial acts. Power of Attorney so executed is required
to be stamped in India by Collector of Stamps within three months of its receipt in India.
Whenever payment of deposit / delivery of articles of locker is made to one of the legal
heirs, on the basis of PoA executed in his/her favour, Receipt (as per Annexure – IV-2:
8/Law/2022) and Indemnity Bond have to be signed / executed by the person so
authorized, for self and as attorney of the persons (name(s) to be specified).
Likewise, when mother / father acts as guardian, he/she shall sign the Receipt and the

:34
Indemnity Bond for self and as guardian of the minor(s) (name to be specified).
In respect of claims up to the value of Rs.2.00 lac, in place of Power of Attorney, a Letter
of Consent-cum-Relinquishment, duly notarized /attested, (as per Annexure-X:
24 7
8/Law/2022) may be executed by the legal heirs in favour of one of the major legal heirs
21
authorizing him/her to lodge claim, execute documents, receive claim amount, etc.
-20 52

However, the branchshould verify the identity of the executants of Letter of

Consent-cum-Relinquishment to its satisfaction before acting thereon.
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Claims in respect of contents of Locker

If the claim is to be settled on the basis of legally established title, the claimant be
advised to bring "Letter of administration‟ from the competent court. Claim case in
respect of contents of locker may be settled against execution of Agreement of Indemnity
5

/ Indemnity Bond with surety on the format as per ANNEXURE-VII & ANNEXURE-IX:
(8/Law/2022) based on the value of the contents of locker and after completion of other
formalities like submission of declaration on Form No. PNB-46-47, preparation of
inventory of the contents of locker etc.
Settlement of claim case where value of claim does not exceed Rs.5000/-
30

In claim cases involving an amount / value not exceeding Rs.5000/-,payment may be

made to the legal heirs of the deceased customer, after relying on the declaration made
in the claim form about the legal heirs of the deceased, duly attested by
Notary/Magistrate. Payment can be made to legal heirs/claimants against execution of
an agreement of indemnity (as perANNEXURE-VII(8/Law/2022).

In claim cases of the amount not exceeding Rs.5000/-, rural branches located in far flung
areas and far away from the city, need not insist upon attestation of the claim form by
Notary or Magistrate and the claimant be asked to obtain and submit a Certificate from
Sarpanch or other equivalent authority, as the branch may deem proper besides
verifying the fact of death and about the legal heirs of the deceased.

Settlement of claim cases where value of claim does not exceed Rs.50000/-
In claim cases involving an amount/ value not exceeding Rs. 50000/-payment may be
made to the legal heirs of the deceased customer, after relying on the declaration made
in the claim form about the legal heirs of the deceased, duly attested by
Notary/Magistrate. Payment can be made to legal heirs/ claimants against execution of
120 | P a g e
an agreement of indemnity, specimen of which is enclosed as
ANNEXURE-VII(8/Law/2022). Gold ornaments or other securities held against
advances may also be released, on adjustment/ repayment of the outstanding dues in
the loan account concerned, on the above lines. No confidential enquiry need to be
made by the Incumbent or any surety be insisted upon.

Settlement of claim cases, where value of the claim exceeds Rs.50000/-

In claim cases involving an amount / value exceeding Rs.50000/-, confidential enquiry
be made by the branch about the legal heirs of the deceased customer. Keeping in view
the outcome of the confidential enquiry, if there is no dispute amongst the legal heirs and
all are ready to join in settlement of the claim, the claim may be settled and paid to the
legal heirs against Indemnity Bond with surety to the satisfaction of the Incumbent in
charge / Sanctioning Authority (Specimen of the ‘Indemnity bond with Surety’ in
case of Deposit Account and Locker are given at ANNEXURE-VIII& ANNEXURE-IX
respectively:8/Law/2022). Gold ornaments or other securities held against advances
may also be released on adjustment / repayment of the outstanding dues in the loan
account concerned, on the above lines.

:34
Time Norms for settlement of claims:
Claims pertaining to deceased customers are to be settled expeditiously and positively
24 7
within the time prescribed hereunder:-
21
1. In case of deposit accounts and lockers having nomination/survivorship mandate, the
-20 52

claim in respect of the deceased customer should be settled and payment to the
nominee / survivor(s) should be released within a period not exceeding15 days from
the date of receipt of the claim subject to the production of proof of death of the deceased
-11 216

customer and suitable identification of the claimant(s) to the satisfaction of the branch
manager; and
2. In the case of deposit accounts and lockers without survivorship mandate /
nomination, the claim should be settled, in accordance with the bank’s guidelines, within
5

one month from the date on which the requisite documents are submitted.

Reference: Law Div. Cir No.4/Law/2024

30

121 | P a g e
POLICY FOR COLLECTION OF CHEQUES / INSTRUMENTS OF THE BANK FOR FY
2024-25 (Operations (Customer Care) 16/2024 dated 18-04-2024
1. Introduction
Keeping in view the technological progress in payment and settlement systems and the
qualitative changes in operational systems and processes that have been undertaken
by a number of banks, the Reserve Bank of India had, with effect from 1 st November
2004, withdrawn its earlier instructions to commercial banks on (i) Immediate Credit of
local/outstation cheques, (ii) Time Frame for Collection of Local / Outstation
Instruments and (iii) Interest Payment for Delayed Collection. The withdrawal of these
mandatory guidelines was expected to enable market forces of competition to come
into play to improve efficiencies in collection of cheques and other instruments. This
collection policy of the Bank is a reflection of our on-going efforts to provide better
service to our customers and set higher standards for performance. The policy is
based on principles of transparency and fairness in the treatment of customers. The
bank is committed to increased use of technology to provide quick collection services
to its customers. This policy document covers the followingaspects:

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➢ Collection of cheques and other instruments payable locally, at centers within
India and abroad.
➢ Our commitment regarding time norms for collection ofinstruments.
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➢ Policy on payment of interest in cases where the bank fails to meet time norms
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for realization of proceeds of outstationinstruments.

➢ Our policy on dealing with collection instruments lost intransit.
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2. Arrangements for Collection:

2.1. LocalCheques
All CTS compliant cheques and other Negotiable Instruments payable locally would be
presented through the clearing system prevailing at the centre. Cheques deposited at
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branch counters and in collection boxes within the branch premises before the
specified cut-off time will be presented for clearing on the same day. Cheques
deposited after the cut-off time and in collection boxes outside the branch premises
including off-site ATMs will be presented in the next clearing cycle.
As a policy, bank would give credit to the customer account on the same day clearing
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settlement takes place. Withdrawal of amounts so credited would be permitted as per

the cheque return schedule of the clearing house.
Bank branches situated at centers where no clearing house exists, would present local
cheques on drawee banks across the counter and it would be the bank’s endeavor to
credit the proceeds at the earliest but not later than 3 rd working day from the date of
deposit by customer.

2.2. OutstationCheques
Cheques drawn on other banks at outstation centres will normally be collected through
bank’s branches at those centers, where the bank does not have a branch of its own,
the instrument would be directly sent for collection to the drawee bank or collected
through a correspondent bank. The bank would also use the National Clearing services
offered by the Reserve Bank of India at centers where such collection services exist.

Since the bank is offering anywhere banking services to its customers same day credit
will be provided in respect of outstation instruments drawn on any of its branches in the
CBS network if received in the branch up to specified time and latest by next working

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 day if deposited/dropped in collection box outside the branch premises including the
offsite ATMs.

2.3 Cheques payable in Foreign Countries

Cheques payable at foreign centres where the bank has branch operations (or banking
operations through a subsidiary, etc.) will be collected through that office. The services
of correspondent banks will be utilized in country/centres where the correspondent has
presence.

Cheques drawn on foreign banks at centres where the bank or its correspondents do
not have direct presence will be sent direct to the drawee bank with instructions to
credit proceeds to the respective Nostro Account of the bank maintained with one of
the correspondent banks.

2.4 Purchase of local/outstationcheques

Bank may, at its discretion, purchase local/outstation cheque tendered for collection at

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the specific request of the customer or as per prior arrangement. Besides satisfactory
conduct of account, the standing of the drawer of the cheque will also be a factor
considered while purchasing the cheque.
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3. Time Frame for Collection of Local / Outstation Cheques /Instruments:
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For local cheques presented in clearing credit will be afforded as on the date of
settlement of funds in clearing and the account holder will be allowed to withdraw funds
as per return clearing norms in vogue.
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Cheques / Instruments presented in high value clearing (with the minimum value of
Rs.1 Lakh) shall be credited on the same day (applicable only in areas covered by high
value / same day clearing).
For cheques and other instruments sent for collection to centers within the country the
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following time norms shall be applied:

Cheques presented atCTSCenters: Maximum period of 7 days.

NonCTSCenters: Maximum period of 10days.
Cheques drawn on foreign countries: Such instruments are accepted for collection
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on the ‘best of efforts’ basis. Bank may enter into specific collection arrangement with
its correspondent bank for speedy collection of such instrument. Bank would give credit
to the party on credit of proceeds to the bank’s Nostro Account with the correspondent
bank after taking into account cooling periods as applicable to the countriesconcerned.

The above time norms are applicable irrespective of whether cheques/instruments are
drawn on the bank’s own branches or branches of other banks.

4. Payment of Interest for delayed Collection of OutstationCheques:

As part of the compensation policy of the bank, the bank will pay interest to its
customer on the amount of collection instruments in case there is delay in giving credit
beyond the time period mentioned above. Such interest shall be paid without any
demand from customers in all typesof accounts. There shall be no distinction between
instruments drawn on the bank’s own branches or on other banks for the purpose of
payment of interest on delayedcollection.

Interest for delayed collection shall be paid at the following rates:

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 a) Savings Bank rate for the period of delay beyond 3 working days in case of local
cheques.
b) Saving Bank rate for the period of delay beyond 7 days in collection of outstation
cheques payable at CTS centers and 10 days in non CTScentres.
c) Where the delay is beyond 14 days interest will be paid at the rate applicable to
for term deposit for the respectiveperiod.
d) In case of extraordinary delay, i.e. delays exceeding 90 days interest will be paid
at the rate of 2% above the corresponding Term Depositrate.
e) In the event the proceeds of cheque under collection was to be credited to an
overdraft/loan account of the customer, interest will be paid at the rate
applicable to the loan account. For extraordinary delays, interest will be paid at
the rate of 2% above the rate applicable to the loanaccount.

It may be noted that interest payment as given above would be applicable only for
instruments sent for collection within India.
5. Cheques / Instruments lost in transit / in clearing process or at paying bank’s

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branch:
In the event a cheque or an instrument accepted for collection is lost in transit or in the
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clearing process or at the paying bank’s branch, the bank shall immediately on coming
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to know of the loss, bring the same to the notice of the accountholder so that the
accountholder can inform the drawer to record stop payment and also take care that
cheques, if any, issued by him / her are not dishonored due to non-credit of the amount
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of the lost cheques / instruments. The bankwould provide all assistance to the
customer to obtain a duplicate instrument from the drawer of the cheque.

In line with the compensation policy of the bank the bank will compensate the
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accountholder in respect of instruments lost in transit in the following way:

a) In case intimation regarding loss of instrument is conveyed to the customer

beyond the time limit stipulated for collection (7/10 days as the case may be)
interest will be paid for the period exceeding the stipulated collection period
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at the rates specified above.

b) In addition, bank will pay interest on the amount of the cheque for a further
period of 15 days at Savings Bank rate to provide for likely further delay in
obtaining duplicate cheque/instrument and collectionthereof.

c) The bank would also compensate the customer for any reasonable charges
he/she incurs in getting duplicate cheque/instrument upon production of
receipt, in the event the instrument is to be obtained from a bank/ institution
who would charge a fee for issue of duplicateinstrument.

6. Delay in re-presentation of technical return cheques and levy of charges

for such returns.

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 The bank will levy cheque return charges only in cases where the customer is at fault
and is responsible for such returns.

Further in cases where the cheques need to be re-presented without any recourse to
the payee, such re-presentation shall be made in the immediate next clearing
presentation not later than 24 hours (excluding holidays) with due notification to the
customers of such representation through SMS alerts, email etc.

6.1 RBI directed that no changes/corrections should be carried out on the cheques. For
any changes in the payee’s name, courtesy amount (amount in figures) or legal
amount (amount in words) etc. excepting change in the date for validation period,
fresh cheque forms should be used by customers. This will help the bank to identify
and control fraudulent alterations.

6.2 Reduction of validity of cheque /draft /pay order/Banker’s cheque from 6 months to
3 months w.e.f.01.04.2012

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6.3 Dishonour /Return of cheques: Bank needs to mention the `Date of Return’ & sign/
initial the Cheque Return Memo and the Objection Slip is to be
signed/initialedgiving
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hereindefiniteandvalidreasonforrefusingpayment,asprescribedinRule6oftheUniform
Regulations and Rules for Bankers’ Clearing Houses (URRBCH). This will enable
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the holder of the instrument to have legal recourse against the drawer of the
cheque.
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7. Miscellaneous:
Cheques which are deposited with wrong account number mentioned on the pay-in
slip, Bank will return such cheques to the customer on the addressed mentioned
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within 48 working hours. However, in cases with incomplete address, incomplete

phone no. or no phone number mentioned on the pay-in slip, the bank will be
responsible to keep these instruments for a maximum period of 3 months.
Cheques received back unpaid will be returned by post/courier etc. to the customer
within 48 working hours on the address recorded in Bank’s database. However,
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these will be kept in the Bank for returning to the customer over the counter if he/she
makes a request for the same. If not collected by the customer within 15 days’ bank
will send back at the recorded address by post orcourier.

8. Service charges
The Bank will recover appropriate service charges, for all collection services, as
decided by Bank from time to time and communicate to the customers by displaying
the same on bank’s website.

9. Periodicity of review of thePolicy

The policy will be effective for one year from the date of approval and it will continue
to be in force till the reviewed policy comes into place

10. ForceMajeure

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 The bank shall not be liable to compensate customers for delayed credit if some
unforeseen event (including but not limited to civil commotion, sabotage, lockout,
strike or other labour disturbances, accident, fires, natural disasters or other “Acts
of God”, war, damage to the bank’s facilities or of its correspondent bank(s),
absence of the usual means of communication or all types of transportation, etc
beyond the control of the bank prevents it from performing its obligations within the
specified service delivery parameters.

CUSTOMER COMPENSATION POLICY (CUSTOMER CARE CENTRE -08/2024 )

Introduction
1.1 Customer Compensation Policy of Bank is designed to cover areas relatingto
unauthorized debiting of account, unauthorized Electronic banking transactions,
payment of interest to customers for delay in collection of cheques / instruments,
payment of cheques after acknowledging stop payment instructions, remittances
within India, foreign exchange services, lending etc. The policy is based on
principles of transparency and fairness in treatment of the customers and

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regulatoryguidelines.

1.2 The objective of the Policy is to establish a system, whereby the customer is
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compensated for the financial loss due to deficiency in service or an act of
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omission or commission directly attributable to theBank.
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1.3 The customer, as far as possible, will be compensated without having to ask for it.
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1.4 The Policy covers only compensation for financial losses which customer might
incur due to deficiency in the services offered by the bank which can be measured
directly and as such the commitments under the Policy are without prejudice to any
right the bank will have in defending its position before any forum duly constituted
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to adjudicate banker-customerdisputes.

2 Deficiencies requiring compensation and the level ofcompensation

2.1 Unauthorized / ErroneousDebit
2.1.1(a) If the bank has raised an unauthorized / erroneous direct debit to an account,
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the entry will be reversed immediately on being informed of the erroneous debit,
after verifying the position. In the event the unauthorized / erroneous debit has
resulted in a financial loss for the customer by way of reduction in the minimum
balance applicable for payment of interest on Savings Fund deposit or payment of
additional interest to the bank in a loan account, the bank will compensate the
customer for such loss. Further, if the customer has suffered any financial loss
incidental to return of a cheque or failure of direct debit instruction due to
insufficiency of balance on account of the unauthorized / erroneous debit (other
than those on account of third party breaches), the bank will compensate the
customer to the extent of such financial losses after taking into consideration of all
relevant factors

2.1.2 L
iability of a Customer or Bank in unauthorized electronic Banking
Transactions:

a) Zero Liability of a customer

A customer’s entitlement to zero liability shall arise where the unauthorized transaction
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occurs in the following events:
(i) Contributory fraud/ negligence/ deficiency on the part of the bank (irrespective of
whether or not the transaction is reported by thecustomer).

(ii) Third party breach where the deficiency lies neither with the bank nor with the
customer but lies elsewhere in the system, and the customer notifies the bank
within three working days of receiving the communication. Here, the
communication means information to customer through SMS, mails, passbook and
othermeans.
(b) Limited Liability of aCustomer
A customer shall be liable for the loss occurring due to unauthorized
transactions in the following cases:
(i) In cases where the loss is due to negligence by a customer, such as where he has
shared the payment credentials (viz. User ID, Passwords, PIN, MPIN, OTP, Card
Details, Mobile Device sharing or any other credential that may be defined by the

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Bank), the customer will bear the entire loss until he reports the unauthorized
transaction to the bank. Any loss occurring after the reporting of the unauthorized
transaction shall be borne by thebank.
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(ii) In cases where the responsibility for the unauthorized electronic banking transaction
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lies neither with the bank nor with the customer, but lies elsewhere in the system and
the customer notifies such transaction on fourth to seventh day after receiving the
communication from the bank (here, the communication to customer means
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information to customer through SMS, mails, passbook and other means), the per
transaction liability of the customer shall be limited to the transaction value or the
amount mentioned in Table 1, whichever islower.
Maximum Liability of a Customer
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(iii) Further, if the delay in reporting is beyond seventh working day, the customer
liability shall be determined asunder:
The customer will bear the entire loss until he reports the unauthorized transaction
to the bank. Any loss occurring after the reporting of the unauthorized transaction

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 shall be borne by the bank. However, depending on case to case basis, Bank may
compensate customer an amount of maximum Rs.25000/- (if reported within 30
days) irrespective of the fact whether there is single or multiple number of
transactions or transaction amount whichever is lower.

Overall liability of the customer in third party breaches, where the deficiency
lies neither with the bank nor with the customer but lies elsewhere in the
system, is summarized in the Table2 below:

Summary of Customer’s Liability

Time taken to reportthe Customer’s Liability (Rs.)

fraudulent transaction from
the date of receiving
the communication

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Within 3 working days Zero Liability
Within 4th to 7th working day The transaction value or the amount mentionedin
table 1, whichever is lower
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Beyond 7th Working day
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The customer will bear the entire loss until he reports
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the unauthorized transaction to the bank. Any loss

occurring after the reporting of the unauthorized
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transaction shall be borne by the bank. However,

depending on case to case basis, Bank may
compensate customer an amount of maximum
Rs.25000/- (if reported within 30 days) irrespective
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of the fact whether there is single or multiple number

of transactions or transaction amount
whicheverislower.
eversalTime line for Zero Liability / Limited Liability of a Customer:
R
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On being notified by the customer, the Bank shall credit (shadow reversal) the amount
involved in the unauthorized electronic transaction to the customer’s account within 10
working days from the date of such notification by the customer (without waiting for
settlement of insurance claim, if any). The credit shall be value dated to be as the date
of unauthorized transaction.

Burden of Proof: The burden of proving the customer liability in case of unauthorized
electronic Banking transactions shall lie on the Bank. Such cases of Zero liability /
limited liability of customers and compensation amount shall be examined and decided
by DBD Division in case of unauthorized electronic transactions and by FRMD in case
of fraudulent electronictransactions.

2.1.2 (i) In case verification of the entry reported to be erroneous by the customer
does not involve a third party, the bank will endeavor to complete the process of
verification within a maximum period of seven working days from the date of reporting of
erroneous debit. In case, the verification involves a third party or where verification is to
be done at overseas centers, the bank shall complete the verification process within a
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maximum period of one month from the date of reporting of erroneous transaction by
thecustomer.

2.1.3 (a) Erroneous transactions reported by customers in respect of credit card

operations which require specific reference to a merchant establishment will be handled
as per rules laid down by cardassociation.

(b) Where it is established that bank had issued and activated a credit card without
written consent of the recipient, the bank would not only reverse the charges
immediately but also pay a penalty without demur to the recipient amounting to twice
the value of charges reversed as per regulatory guidelines in thisregard.

(c) The compensation on account of delays in collection of instruments would be as

indicated in the bank’s collectionpolicy.

2.2 Payment of Cheques after Stop Payment Instructions

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In case a cheque has been paid after stop payment instruction is acknowledged by the
bank, the bank shall reverse the transaction within two working days after receiving the
intimation and give value-dated credit to protect the interest of the customer. Any
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consequential financial loss to the customer will be compensated as provided under
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para 2.1.

2.3 ECS direct debits / other debits to accounts

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2.3.1 The bank will undertake to carry out direct debit / ECS debit instructions of
customers in time. In the event the bank fails to meet such commitments customer will
be compensated to the extent of any financial loss customer would incur on account of
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delay in carrying out the instruction / failure to carry out the instructions.

2.3.2 The bank would debit the customer’s account with any applicable service
charge as per schedule of charges notified by the bank from time to time and displayed
on bank’s website www.pnbindia.in, which will be a notice to the public at large. In the
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event the bank levies any charge in violation of the arrangement, the bank will reverse
the charges when pointed out by the customer subject to scrutiny of agreed terms and
conditions. Any consequential financial loss to the customer will also be compensated.

2.3.3 Delay in collection of local cheques and other Negotiable Instruments:

All cheques and other negotiable instruments payable locally would be presented
through the Clearing System prevailing at the center. Bank would give credit to the
customer account on the day the clearing settlement takes place.

Interest for delayed collection shall be paid at the following rates:

• If the proceeds of cheque under collection were to be credited to Savings Bank or

Current account of the customer, interest at the rate of Saving Bank Rate for the period
ofdelay.

• If the proceeds of cheque under collection were to be credited to an overdraft/loan

account of the customer, interest will be paid at the rate applicable to the
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overdraft/loanaccount.
Delays in Collection of Outstation Cheques and other Negotiable Instruments in
India

As part of the compensation policy of the bank, the bank will pay interest to its customer
on the amount of collection instruments in case there is delay in giving credit beyond the
time period specified in banks cheque collection policy. Such interest shall be paid
without any demand from customers in all type of accounts.

There shall be no distinction between instruments drawn on the bank’s own branches or
on other banks for the purpose of payment of interest on delayed collection.
Interest for delayed collection shall be paid at the following rates:
(a) If the proceeds of cheque under collection were to be credited to Savings
Bank or Current account of the customer,

(i) Savings Bank rate for the period of delay beyond 7/10/14 days as the casemay be in

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collection of outstationcheques.
(ii) Where the delay is beyond 14 days but up to 90 days, interest will be paid at the rate
applicable to term deposit for the corresponding period or Saving Bank rate,
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whichever ishigher.
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(iii) In case of extraordinary delay, i.e. delays exceeding 90 days’ interest will be paid at
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the rate of 2% above the rate applicable to term deposit for the corresponding
period.
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(b) If the proceeds of cheque under collection were to be credited to overdraft /

loan account of the customer,
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Interest will be paid at the rate applicable to the loan account. For extraordinary delays,
i.e. delays exceeding 90 days’ interest will be paid at the rate of 2% above the rate
applicable to the loan account.
It may be noted that interest payment as given above would be applicable only for
instruments sent for collection within India and when the amount calculated is Rs.10/-
and above. Interest amount will be rounded off to the nearest rupee.
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2.4 Delay in Collection of Cheques / Instruments (Payable Outside India)

The compensation on account of delays in collection of instruments would be as per the
FEDAI Rules (7.1 Edition) Rule 4.5 for Cheques / Instruments which reads as under:

Authorized Dealers shall pay or send Intimation, as the case may be, to the beneficiary
in two working days from the date of receipt of credit advice / nostro statement. In case
of delay, the bank shall pay the beneficiary interest @ 2 % over its savings bank
interstate.

2.5 Payment of Penal Interest for delayed credit/refunds of NEFT transactions

In case of delay in crediting the beneficiary customer’s account or in returning the
un-credited amount to the remitter in case of NEFT, Bank shall pay penal interest at the
current RBI LAF Repo Rate plus two percent for the period of delay/till the date of
refund as the case may be to the affected customers suo moto, without waiting for claim
from customers.
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Customer Facilitation Centers(CFCs) have been established to handle customer
queries/complaints regarding NEFT transactions. The contact details of CFCs are
available on website of the Bank as well as the website of RBI for easy availability to the
customers. Further, Bank shall keep the contact details of their CFCs, set up to handle
customer queries/complaints regarding NEFT transactions, updated at all times.
Changes, if any, should be advised by the Bank immediately to the National Clearing
Cell, Nariman Point, RBI for updating the central directory placed on RBI website. Bank
shall also ensure that calls made/e-mails sent to the CFCs are promptly attended to and
sufficient resources are dedicated for the same.

2.6 Payment of compensation to the Exporters in respect of delayed credit

relating to bills negotiated/sent on collection basis.

On receipt of credit advice/statement of Nostro/Vostro account and compliance of

guidelines, requirements of the Bank and FEMA, the Bank shall transfer funds to the
credit of exporter’s account within two working days.

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If the above stipulated time limit is not observed, Bank shall pay compensation for the
delayed period at the minimum interest rate charged on export credit as advised by RBI
from time to time.
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2.7 Delay in payment of Inward Remittance
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Bank shall pay or send intimation, as the case may be, to the beneficiary within two
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working days from the date of receipt of credit advice/nostro statement.

In case of delay, Bank shall pay the beneficiary interest @ 2% over the savings bank
interest rate.
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2.8 Cheques / Instruments lost in transit / in clearing process/ at paying bank’s

branch:

In the event a cheque or an instrument accepted for collection is lost in transit or in the
clearing process or at the paying bank’s branch, the bank shall immediately on coming
30

to know of the loss, bring the same to the notice of the accountholder so that the
accountholder can inform the drawer to record stop payment and also
takecarethatcheques,ifany,issuedbyhim/herarenotdishonoredduetonon-credit of the
amount of the lost cheques / instruments. The bank would provide all assistance to the
customer to obtain a duplicate instrument from the drawer of the cheque.

The bank will compensate the accountholder in respect of instruments lost in transit in
the following way:

a) In case intimation regarding loss of instrument is conveyed to the customer beyond

the time limit stipulated for collection (7/10/14 days as the case may be) interest will be
paid for the period exceeding the stipulated collection period at the rates specified under
clause2.4.
b) In addition, bank will pay interest on the amount of the cheque for a further period of
15 days at Savings Bank rate to provide for likely further delay in obtaining duplicate
cheque/instrument and collection thereof.
(a) The bank would also compensate the customer for any reasonable charges
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he/she incurs in getting duplicate cheque/instrument upon production of receipt, in the
event the instrument is to be obtained from a bank/ institution who would charge a fee
for issue of duplicate instrument.

2.9 Delay in Issue of duplicate draft

Duplicate draft will be issued within a fortnight from the receipt of such request from the
purchaser along with submission of documents as prescribed by the bank. For delay
beyond the above stipulated period, interest at the rate applicable for fixed deposit of
corresponding period will be paid as compensation to the customer for such delay. The
period of fortnight prescribed would be applicable only in cases where the request for
duplicate demand draft is made by the purchaser or the beneficiary and would not be
applicable in the case of third party endorsements.

2.10 ATM Failure to dispense cash/short cash

It is mandatory for bank to reimburse the customer, the amount wrongfully debited on
account of failed ATM transactions within a maximum period of 7 (seven) working days

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from the receipt of the customer complaint. For any failure to re- credit the customer’s
account within 7 (seven) working days from the date of receipt of the complaint, bank
shall pay compensation of Rs.100/- per day to the aggrieved customer. This
compensation shall be credited to the customer’s account automatically without any
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claim from the customer, on the same day when bank affords the credit for the failed
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ATMtransactions.

Customer is entitled to receive such compensation only if claim is lodged with the issuer
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bank within 30 days of the date of transaction.

Further, this is applicable for domestic ATM transactions only. Details of charge back in
case of ATM transaction by a customer of the bank when he uses other bank ATM may
5

be included.

All disputes regarding ATM failed transactions shall be settled by the issuing and the
acquiring bank through the ATM System Provider only. No bilateral settlement
arrangement outside the dispute resolution mechanism available with the System
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Provider is permissible. This measure is intended to bring down the instances of

disputes in payment of compensation between the issuing and acquiring banks.

2.11 Delay in disbursement of revised pension and arrears

All the pensioners are compensated for the delayed period, if delay is on the part of the
Bank, beyond the due date at a fixed interest rate of 8%. Compensation shall be
credited automatically without any claim from the pensioner on the same day when the
bank affords the credit.

3. Violation of the Code by bank’s agent

In the event of receipt of any complaint from the customer that Bank’s representative /
courier or Direct Selling Agent (DSA) has engaged in any improper conduct or acted in
violation of the Code of Bank’s Commitment to Customers which the bank has adopted
voluntarily, the bank is committed to investigate the matter and endeavor to
communicate the findings to the customer within 7 working days from the date of receipt
of complaint and wherever justified, compensate the customer for financial losses, if
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any, as contemplated under this policy.

4. Transaction of “at par instruments” of Co-operative Banks

Bank will not honor Cheques drawn on current accounts maintained by co- operative
banks with it unless arrangements are made for funding cheques issued. Issuing bank
shall be responsible to compensate the cheque holder for non-payment / delayed
payment of cheques in the absence of adequate funding arrangement.

5. Lender’s liability: Commitments to borrowers

The bank has adopted the principles of lender’s liability. In terms of the guidelines for
lenders liability, and the Code of Bank’s Commitment to Customers adopted by the
bank, the bank would return to the borrowers all the securities/documents/title deeds
to mortgaged property within 15 days of repayment of all dues agreed to or
contracted. The bank will compensate the borrower for monetary loss suffered, if any
due to delay in return of the same. In the event of loss of title deeds to mortgaged

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property at the hands of the banks the compensation will cover out of pocket
expenses for obtaining duplicate documents plus a lum-sum amount as decided by
the bank.
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6. Customer’s Responsibility
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Bank will not be responsible for the loss to the customers due to customer’s
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carelessness in keeping the Cheque book, passbook, cards, PIN or other security
information and not following Do’s and Don’ts issued by Bank, until the Bank has
been notified by the customer.
5

Bank will not be responsible for the loss to the customer, if the customer acts
fraudulently and/or acts without reasonable care which has resulted into loss to
him/her. Bank will also not be responsible for the losses arising out of misuse of lost
PIN, compromise of passwords/secured or confidential information, until the time the
Bank has been notified and has taken steps to prevent misuse.
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6.1 RBI directed that no changes/corrections should be carried out on the cheques. For
any changes in the payee’s name, courtesy amount (amount in figures) or legal
amount (amount in words) etc. excepting change in the date for validation period,
fresh cheque forms should be used by customers. This will help the bank to identify
and control fraudulent alterations.

6.2 Reduction of validity of cheque /draft /pay order/Banker’s cheque from 6 months to 3
months w.e.f. 01.04.2012.

Dishonor/Return of cheques: Bank needs to mention the `Date of Return’

&sign/initialtheChequeReturnMemoandtheObjectionSlipistobesigned/initialed giving
therein a definite and valid reason for refusing payment, as prescribed in Rule 6 of the
Uniform Regulations and Rules for Bankers’ Clearing Houses (URRBCH). This will
enable the holder of the instrument to have legal recourse against the drawer of the
cheque.

7. Disclaimer Clause
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 Notwithstanding anything contained hereinabove, the Bank shall not pay any
compensation in the following cases:-
i) Any deficiency in regard to loans and advances activities of the Bank.
ii) Dishonor of at par payment agreement with other banks, due to non-funding and
security compliance.
iii) Delays on account of non-functioning of business due to factors beyond the
control of the bank the period covered by such events shall be omitted for
calculation of delayetc.
iv) Where the issues are subjudiced and pending before Courts, Ombudsman,
Arbitrator, Government and matter put on hold due tostay.
8. Wealth Management Products
Bank is a corporate agent and distributor of insurance and mutual fund products
respectively. For any deficiencies in services bank will assist customers to raise their
grievances with the tie-up partners. For any deficiencies in service at bank level
raised by the customer, the issue will be examined by the bank and if the lapse on
part of the bank is confirmed (mis-selling) customer will be compensated as per the
provisions of thesepolicies.

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9. Force Majeure
The Bank shall not be liable to compensate customers for delayed credit if some
24 7
unforeseen event (including but not limited to civil commotion, sabotage, lockout,
21
strike or other labor disturbances, accident, fires, natural disasters or other “Acts of
-20 52

God”, war, damage to Bank’s facilities or of its correspondent bank(s), absence of

the usual means of communication or all types of transportation, etc.) beyond the
control of Bank prevents it from performing its obligations within the specified service
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delivery parameters.

10. Amendment/modification of thePolicy

5

The bank reverses the right to amend/modify this policy, as and when deemed fit
and proper, at its sole discretion.

Dishonour of Cheques, ECS – Refund of Charges:In references of our Customer

Compensation Policy and Customer Rights policy and in those cases where no fault
30

lies with the customer, field staff must proactively refund any charges levied due to
cheque returning and non-execution of ECS mandate without any request from the
customers. The charges levied by other banks, if any, be also refunded after
obtaining proof thereof to the satisfaction of the Branch Head.

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IBA’S CODE FOR BANKING PRACTICE, OUR BANK’S DEPOSIT POLICY &RBI
DIRECTIVES

BCSBI - Code of Bank's commitments to customer

This is a non-statutory Code issued on a voluntary basis. It is to be observed by the
Member Banks in dealing with their personal customers (hereinafter referred to as
customers). It covers specifically banking services such as current accounts, savings
and other deposit accounts, advances (loans and overdrafts). However, principles of the
Code will apply to overall relationship between the Member Banks themselves and their
customers.

Objectives
The Code is intended –
(a) To promote good banking practices by setting out the minimum standards which
Member Banks will follow in their dealings with customers.
(b) To foster customer confidence in the banking system;
(c) To inculcate self-discipline amongst Member Banks with a view to promoting healthy

:34
competition and ethical practices in respect of banking services.

Member Banks of the Indian Banks' Association (the Association) agree to observe and
24 7
abide by the following Ground Rules: 21
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1. Member Banks shall not give prizes, gifts, donations, etc., or any direct or indirect
benefits in the purchase price or in respect of any other transactions relating to
securities, bonds, etc., as consideration or with a view to getting or retaining a deposit
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and or advance account.

2. ASSOCIATION WITH CHIT FUNDS/SPECULATIVE VENTURES

Member Banks shall not associate themselves with chit fund companies, which conduct
5

lottery, gift schemes, etc., or any other speculative ventures.

3. DEPOSIT RECEIPTS
When Member Banks issue deposit receipts against cheques/drafts/pay-orders drawn
on local banks, the banks may pay interest on such deposits from the date on which the
30

relative instrument gets credited/adjusted in the bank's account at the clearing house
(RBI, SBI, etc.).

4. SAVINGS BANK ACCOUNT

Member Banks shall not open savings bank accounts in the name of the institutions
which have been listed out in the Annexure to this Code and also as amended from time
to time.

5. INTRODUCTION OF ACCOUNTS
In all cases (except wherever specifically prescribed), antecedents of prospective
customer have to be verified to the satisfaction of the official authorized to allow opening
the account, in addition to obtaining documents as prescribed. Introduction by an
existing KYC compliant customer need not be insisted upon.
It is however reiterated that due diligence at the time of accepting a customer is of utmost
importance to avoid frauds. Spirit of KYC Norms is to ensure the authenticity of
Identity and Address of the customer.

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6. PRINTING OF CUSTOMER'S LOGO, ETC., ON CHEQUE LEAVES
Member Banks shall not print or allow the customers to print any logo, advertisement,
etc., on the cheque leaves.

7. COLLECTION OF TERM DEPOSIT RECEIPT ON MATURITY

The Term Deposit Receipt (TDR) received for collection from another bank shall not be
renewed by the TDR issuing bank and delivered to the customer directly. The TDR
issuing bank shall either pay to the collecting bank or else, the instrument shall be
returned, if the issuing bank has any valid reasons not to pay.

8. RENEWAL OF OVERDUE DOMESTIC TERM DEPOSIT

Renewal of overdue domestic term deposit (from maturity date of overdue deposit) shall
be for a period extending up to at least 7 days beyond the actual date of renewal. If the
renewed overdue domestic deposit is tendered for premature foreclosure/ encashment
before completion of minimum 7 days from the actual date of the renewal, no interest be
paid for the overdue period Updated even if the total overdue period from the date of
maturity of the old deposit receipt exceeds 7 days.

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9. PAYMENT OF INTEREST ON TERM DEPOSIT MATURING ON HOLIDAYS
If the noted due date of a term deposit falls on a holiday, Sunday, non-business working
24 7
day, interest be paid for such intervening day(s), at the originally contracted rate, till the
21
succeeding working day.
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10. MATURITY VALUE CERTIFICATE (MVC)

Member Banks shall not issue Maturity Value Certificates (MVCs) under any
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circumstances to any person who approaches bank branches with offer to procure
substantial rupee deposits.

11. NEGATIVE PUBLICITY

5

Member Banks shall not make publicity of adverse/weak position of other banks, in order
to wean away the customers of the affected banks.

12. INTEREST PAYMENT

The statements with regard to the rate of interest, method of interest calculation, etc. in
30

any publicity literature, advertisement and other forms of publicity on deposit scheme/s
of banks shall be precise and intelligible.

13. GENERAL CONVENTIONS FOR DOMESTIC DEPOSITS

Member Banks may not accept any deposits for a period longer than 10 years. However,
banks may accept deposits for periods exceeding 10 years in terms of orders of
competent courts or in the case of minors where interests of minors are involved,
provided banks are convinced that it is necessary to do so:

(a) Interest on deposits for fixed term may be paid, credited, transferred or reinvested
with frequency not less than the quarterly rests. However, payment of monthly interest
may be allowed, if required, by discounting the quarterly interest accrued (refer to the
Association's Master Charts).

(b) Interest on deposits where the terminal period (month/ quarter/half year etc., as the
case may be) is incomplete shall be paid on maturity.

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(c) On deposits repayable in less than three months or where the terminal quarter is
incomplete, interest would be paid for the actual number of days on the basis of 365 days
in a year.

14. TERMS OF ACCEPTANCE OF DEPOSITS

(a) Member Banks shall not issue an incomplete term deposit receipt which does not
clearly mention the amount actually deposited, period for which the deposit is
placed/accepted and the rate of interest payable as also periodical rest at which interest
is payable.
(b) In case of Reinvestment Plan Deposit, Recurring Deposit and Cash Certificate in
addition to the particulars stated in the above para, banks shall also mention the maturity
value and periodical rest at which the interest shall be compounded.

15. OVERDRAFT IN SAVINGS BANK ACCOUNT

No overdraft limit on a regular basis be permitted in saving bank account.

B) OUR BANK’S DEPOSIT POLICY

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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
24 7
recognized. Detailed operational instructions on various deposit schemes and related
21
services will be issued from time to time.
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1. Types of Deposit Accounts

Various deposit products offered by the Bank are assigned different names. The deposit
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products can be categorized broadly into the following types. Definition of major deposits
schemes are as under: -
i. “Demand deposits” means a deposit received by the Bank which is withdraw able on
demand;
5

ii. “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
iii. “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
30

Benefit Deposits/Short Deposits/Fixed Deposits/ Monthly Income Certificate /Quarterly

Income Certificate etc.
iv. Notice Deposit means term deposit for specific period but withdrawable on giving at
least one complete banking days’ notice;
v. “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. Account Opening and Operation of Deposit Accounts

A.The Bank before opening any deposit account will carry out due diligence as required
under “Know Your Customer” (KYC) guidelines issued by RBI

B. The regulatory guidelines require banks to categorise customers based on risk

perception and prepare profiles of customers for the purpose of transaction monitoring.

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C. 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 will 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 cheques books, additional statement of accounts, duplicate pass
book, folio charges, etc. All such details, regarding terms and conditions for operation of
the accounts and schedule of charges for various services provided will be
communicated to the prospective depositor while opening the account.

3. Savings Bank Accounts can be opened for eligible person / persons and certain
organizations / agencies (as advised by Reserve Bank of India (RBI) from time to time)

4. Current Accounts can be opened by individual’s / partnership firms / Private and

Public Limited Companies / HUFs / Specified Associates / Societies / Trusts,

:34
Departments of Authority created by Government (Central or State Limited Liability
Partnership), Etc.
24 7
21
5. Pension Accounts of retiring employees approaching for opening their pension
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accounts before retirement (in case of joint account) be openedwith first name of
pensioner only.
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6. Term Deposits Accounts can be opened by individual’s/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.
5

7. The due diligence process, while opening a deposit account will involve satisfying
about the identity of the person, verification of address, satisfying about his occupation
and source of income. Obtaining introduction of the prospective depositor from a person
acceptable to the Bank and obtaining recent photograph of the person/s opening
/operating the account are part of due diligence process.
30

8.In addition to the due diligence requirements, under KYC norms the Bank is required
by law to obtain Permanent Account Number (PAN) or General Index Register (GIR)
Number or alternatively declaration in Form No. 60 or 61 as specified under the Income
Tax Act / Rules.

9. 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 granted and no cheque books will be
provided to such accounts.

10. 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

138 | P a g e
mandate for operating the account can be modified with the consent of all account
holders.

11. The joint account holders can give any of the following mandates for the disposal of
balance in the above accounts:
a. Either or Survivor: If the account is held by two individuals say, A & B, the final
balance along with interest, if applicable, will be paid to survivor on death of anyone of
the account holders.
b. 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 the survivor on
death of any two account holders.

12. 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.

13. 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

:34
period on the date of maturity.

14. Nomination facility is available on all deposit accounts opened by the individuals.
24 7
Nomination is also available to a sole proprietary concern account. Nomination can be
21
made in favour of one individual only. Nomination so made can be cancelled or changed
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by the account holder/s any time. While making nomination, cancellation or change
thereof, it is not required to be attested by witnesses, however, thumb impression of
the account holders obtained on nomination forms are required to be attested by
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two witnesses. Nomination can be modified by the consent of account holder/s.

Nomination can be made in favour of a minor also.

15. Bank recommends that all depositors avail nomination facility. The nominee, in the
5

event of death of the depositor/s, would receive the balance outstanding in the account
as a trustee of legal heirs. The depositor will be informed of the advantages of the
nomination facility while opening a deposit account.

16. A statement of account will be provided by the Bank to Savings Bank as well as
30

Current Deposit Account Holders periodically as per terms and conditions of opening of
the account. Alternatively, the Bank may issue a Pass Book to these account holders.

17. The deposit accounts may be transferred to any other branch of the Bank at the
request of the depositor.

INTEREST PAYMENTS

18. Interest shall be paid on saving account at the rate specified by Reserve Bank of
India directive from time to time. However, term deposit interest rates are decided by the
Bank within the general guidelines issued by the Reserve Bank of India from time to time.

19. In terms of Reserve Bank of India directives, interest shall be calculated at quarterly
intervals on term deposits and paid at the rate decided by the Bank depending upon the
period of deposits. In case of monthly deposit scheme, the interest shall be calculated for
the quarter and paid monthly at discounted value. The interest on term deposits is

139 | P a g e
calculated by the Bank in accordance with the formulae and conventions advised by
Indian Banks’ Association.
20. The rate of interest on deposits will be prominently displayed in the branch
Premises. Changes, if any, with regard to the deposit schemes and other related
services shall also be communicated upfront and shall be prominently displayed.

21. The Bank has statutory obligation to deduct tax at source if the total interest
paid/payable on all term deposits held by a person exceeds the amount specified under
the Income Tax Act. The Bank will issue a tax deduction certificate (TDS Certificate) for
the amount of tax deducted. The depositor, if entitled to exemption from TDS can submit
declaration in the prescribed format at the beginning of every financial year.

ADDITION OR DELETION OF THE NAME/S OF JOINT ACCOUNT HOLDERS

The bank may at the request of all the joint account holders allow addition or deletion of
name/s of joint account holder/s if the circumstances so warrant or allow an individual
depositor to add the name of another person as a joint account holder.

:34
CUSTOMER INFORMATION
The customer information collected from the customers shall not be used for cross
selling of services or products by the Bank, their subsidiaries and affiliates. If the Bank
24 7
proposes to use such information, it should be strictly with the consent of the
21
accountholder.
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SECRECY OF CUSTOMER’S ACCOUNTS

The Bank shall not disclose details/particulars of the customer’s account to a third
-11 216

person or party without the expressed or implied consent from the customer. However,
there are some exceptions, viz. disclosure of information under compulsion of law, where
there is a duty to public to disclose and where interest of the Bank requires disclosure.
5

PREMATURE WITHDRAWAL OF TERM DEPOSIT

The Bank on request from the depositor, at its discretion may allow withdrawal of term
deposit before completion of the period of the deposit agreed upon at the time of placing
the deposit. The Bank shall declare their penal interest rates policy for premature
withdrawal of term deposit. The Bank shall make depositors aware of the applicable rate
30

along with the deposit rate.

PREMATURE RENEWAL OF TERM DEPOSIT

In case the depositor desires to renew the deposit by seeking premature closure of an
existing term deposit account, the bank will permit the renewal at the applicable rate on
the date of renewal, provided the deposit is renewed for a period longer than the balance
period of the original deposit. While prematurely closing a deposit for the purpose of
renewal, interest on the deposit for the period it has remained with the bank will be paid
at the rate applicable on the date of deposit to the period for which the deposit remained
with the bank

RENEWAL OF OVERDUE TERM DEPOSITS

(a) Overdue Term Deposits are to be renewed on the date of presentation and not to be
renewed from retrospective date.
(b) The appropriate prevailing rate of interest shall be applicable from the date of renewal
of the FDR.

140 | P a g e
(c) Interest on Overdue Term Deposits is not subjected to Tax Deduction at Source in
terms of section 194A of the Income Tax Act, 1961. However, in the cases where the
said overdue deposits are renewed further, the interest on such renewed term deposits
will be subjected to same provisions of TDS applicable in the case of any other new/fresh
terms deposits.

ADVANCES AGAINST DEPOSITS

The Bank may consider request of the depositor/s for loan / overdraft facility against term
deposits duly discharged by the depositor/s on execution of necessary security
documents. The Bank may also consider loan against deposit standing in the name of
minor, however, a suitable declaration stating that loan is for the benefit of the minor, is to
be furnished by the depositor - applicant.

INTEREST PAYABLE ON TERM DEPOSIT IN DECEASED ACCOUNT

i. In the event of death of the depositor before the date of maturity of deposit and amount
of the deposit is claimed after the date of maturity, the Bank shall pay interest at the
contracted rate till the date of maturity. From the date of maturity to the date of payment,

:34
the bank shall pay interest as permissible in case of overdue term deposits for the period
for which the deposit remained with the Bank beyond the date of maturity.
ii. However, in the case of death of the depositor after the date of maturity of the deposit,
24 7
where the depositor failed to renew the deposit for a further period, the bank shall pay
21
interest as permissible in case of overdue term deposits.
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INSURANCE COVER FOR DEPOSITS

All bank deposits are covered under the insurance scheme offered by Deposit Insurance
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and Credit Guarantee Corporation of India (DICGC) subject to certain limits and
conditions.

STOP PAYMENT FACILITY

5

The Bank will accept stop payment instruction from the depositors in respect of cheques
issued by them. Charges, as specified, will be recovered.

DORMANT ACCOUNTS
Accounts which are not operated for a period of two years will be transferred to a
30

separate dormant/inoperative account status in the interest of the depositor as well as

the bank. The depositor will be informed of charges, if any, which the bank will levy on
dormant / inoperative accounts, the depositor can request the bank to activate the
account for operating it. However, bank shall not charge any fee for reactivation of
the saving account.

SAFE DEPOSIT LOCKERS

This facility is not offered through all bank branches and wherever the facility is offered,
allotment of safe deposit vault will be subject to availability and compliance with other
terms and conditions attached to the service. Safe deposit lockers may be hired by an
individual (being not a minor) singly or jointly with another individual(s), HUFs, firms,
limited companies, associates, societies, trusts etc. Nomination facility is available to
individual(s) holding the lockers singly or jointly. In respect of lockers held in joint names,
up to two nominees can be appointed. Joint locker holders can give mandate for access
to the lockers in the event of death of one of the holders on the lines similar to those for
deposit accounts. In the absence of nomination or mandate for disposal of contents of
lockers, with a view to avoid hardship to common persons, the bank will release the
141 | P a g e
contents of locker to the legal heirs against indemnity on the lines as applicable to
deposit accounts

SALIENT FEATURES OF THE RBI DIRECTIVES- INTEREST RATES ON DEPOSITS

1. Minimum tenor and rates of interest payable on Savings deposits and on Term
deposits
• Banks are free to determine their savings bank deposit interest rate, subject to the
following two conditions:
• First, each bank will have to offer a uniform interest rate on savings bank deposits up to
Rs.1 lakh, irrespective of the amount in the account within this limit.
• Second, for savings bank deposits over Rs.1 lakh, a bank may provide differential rates
of interest, if it so chooses, subject to the condition that banks will not discriminate in the
matter of interest paid on such deposits, between one deposit and another of similar
amount, accepted on the same date, at any of its offices.
(ii) The payment of interest on savings bank accounts by scheduled commercial banks
should be calculated on a daily product basis.

:34
2. Floating Rate Deposits
On Domestic Term Deposits, a bank may offer floating rate clearly linked to an anchor
24 7
rate. Only market-based rupee benchmark rates, which are directly observable and
21
transparent to the customer, should be used by banks for pricing their floating rate
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deposits.

3. Payment of interest on accounts frozen by banks

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Banks are advised to follow the procedure detailed below in the case of Term Deposit
Accounts of customers frozen by the orders of the enforcement authorities:
(i) A request letter from the customer on maturity. In case the depositor does not exercise
his option of choosing the term for renewal, banks may renew the same for a term equal
5

to the original term.

(ii) No new receipt is required to be issued. However, suitable note should be made
regarding renewal in the deposit ledger.
(iii) Renewal of deposit should be advised by registered letter / speed post / courier
service to the concerned Government department under advice to the depositor. In the
30

advice to the depositor, the rate of interest at which the deposit is renewed should also
be mentioned.

4. Payment of interest on fixed deposit - Method of calculation of interest

IBA, for the purpose of calculation of interest on domestic term deposit, has prescribed
that on deposits repayable in less than three months or where the terminal quarter is
incomplete, interest should be paid. Proportionately for the actual number of days
reckoning the year at 365 days. Some banks are adopting the method of reckoning the
year at 366 days in a Leap year and 365 days in other years. While banks are free to
adopt their methodology, they should provide information to their depositors about the
manner of calculation of interest appropriately while accepting the deposits and display
the same at their branches. If a Fixed Deposit Receipt matures and proceeds are unpaid,
the amount left unclaimed with the bank will attract savings bank rate of interest.

5. Additional interest to Army Group Insurance Directorate (AGID), Naval Group

Insurance Fund (NGIF) and Air-Force Group Insurance Society (AFGIS)

142 | P a g e
A Public Sector Bank is permitted to pay additional interest of 1.28 per cent per annum
over and above the normal rate of interest permissible

6. Discretion to Regional Rural Banks /Local Area Banks to pay additional interest
Regional Rural Banks/Local Area Banks may, at their discretion, allow additional interest
of half percent per annum on savings deposits.

7. Discretion to pay additional interest not exceeding one percent on deposits of

bank’s staff and their exclusive associations
In respect of a savings or a term deposit account opened in the name of:
a. a member or a retired member of the bank’s staff, either singly or jointly with any
member or members of his/her family; or
b. the spouse of a deceased member or a deceased retired member of the bank’s staff;
and
c. an Association or a fund, members of which are members of the bank’s staff;

In case of resignation by any employee other than the above listed clauses, no

:34
additional rate of interest would be applicable.

8. Discretion to pay additional interest not exceeding one per cent on deposits of
24 7
Chairman and Managing Director and Executive Directors of the bank
21
They are eligible to get the benefit above only during the period of their tenure.
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9. Discretion to pay interest on current accounts maintained by Regional Rural

Banks with sponsor banks
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10. Discretion to pay interest on the minimum credit balance in the composite
cash credit account of a farmer
A bank may, at its discretion, pay interest at a rate based on its perception and other
5

relevant factors on the minimum credit balance in the composite cash credit account of a
farmer during the period from the 10th to the last day of each calendar month.

11. Deposit Scheme for Senior Citizens

(i) Banks have been permitted to formulate, with the approval of their Boards of
30

Directors, fixed deposit schemes specifically for resident Indian senior citizens offering
higher and fixed rates of interest as compared to normal deposits of any size.
12. Premature withdrawal of term deposit
(i) While prematurely closing a deposit, interest on the deposit for the period that it has
remained with the bank will be paid at the rate applicable to the period for which the
deposit remained with the bank and not at the contracted rate. No interest is payable,
where premature withdrawal of deposits takes place before completion of the minimum
period prescribed.
1% penal interest to be charged at the time of premature cancellation/part withdrawal of
domestic term deposits for all tenors and interest rate payable shall be Interest rate
applicable to the amount & period for which the deposit remained with the bank minus
1.00% and not at the contracted rate. (BA & RM DIVISION – SAVING DEPOSIT, DEBIT
CARD, NRI BUSINESS & OTHER LIABILITIES BUSINESS CIRCULAR No 23/2023)

Penalty Clause on premature withdrawal of term deposits as modified by

Resource Mobilization Division, HO from time to time may be referred.

143 | P a g e
(ii) In the case of premature withdrawal of NRE term deposits for conversion into
Resident Foreign Currency (RFC) Account, the bank should not levy any penalty for
premature withdrawal. (iii) Conversion of NRE deposit into FCNR(B) deposit and vice
versa before maturity should be subject to the penal provision relating to premature
withdrawal.
(iv) Conversion of NRSR/NRNR deposit into NRO deposit before maturity will be subject
to the penal provision relating to premature withdrawal.

13. Renewal of Overdue Term Deposit:

Overdue Term Deposits are to be renewed on the date of presentation and not to be
renewed from retrospective date. The banks not to auto renew the term deposits
accountswithout having obtained customer consent in writing.
The appropriate prevailing rate of interest of FDR shall be applicable from the date of
renewal.
Interest for the overdue period is to be paid at Savings Bank rate of interest as applicable
from time to time.

:34
Interest on Overdue Term Deposits is not subjected to Tax Deduction at Source in terms
of section 194A of the Income Tax Act, 1961. However, in the cases where the said
overdue deposits are renewed further, the interest on such renewed term deposits will be
24 7
subjected to same provisions of TDS applicable in the case of any other new/fresh terms
21
deposits.
-20 52

The Incumbents In-charge shall ensure that no term deposit account should be
transferred to overdue category as per mandate of depositor. If at all, it has to be
transferred to overdue category, the reasons be ascertained by effective follow up for
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renewal of the same immediately. Report of overdue fixed deposits of branch must be
generated on daily basis under menu option “ACS’’ under sub-GL code-03152 in the
system (CBS-Finacle).
5

14. Non-Renewal of Overdue Term Deposit:

“Interest would be paid at savings bank rate of interest as applicable from time to time.
Interest would be calculated on ‘Simple basis’ and would bepayable w.e.f. 22.08.2008 or
the date of maturity whichever is later for the overdue periodalong with the maturity
proceeds of the matured term deposits”.
30

These revised guidelines shall be made effective on all Overdue Term Deposits,
including:
(i)PNB Tax Saver Fixed Deposit Scheme (ii) Capital Gain Scheme (iii) Certificate of
Deposits (iv) Recurring Deposit/Flexi Recurring Deposit. (Reference: RBD (Resource)
CIRCULAR NO.15/2020dt. 30/03/2020 & RLBD CIR No. 20/2021 dt. 20/10/2021)

Addition or deletion of the name(s) of Joint account holders

A Bank may at the request of all the joint account holders allow the addition or deletion of
name(s) of joint account holder(s) if the circumstances so warrant or allow an individual
depositor to add the name of another person as a joint account holder; Provided that in
no case shall the amount or duration of original deposit undergo change in any manner in
case the deposit is a term deposit.

Rounding off of transactions

All transactions including payment of interest on deposits/charging of interest on
advances shall be rounded off to the nearest rupee, i.e. fraction of 50 paise and above

144 | P a g e
shall be rounded off to the next higher rupee and fraction of less than 50 paise shall be
ignored.

Issue of term deposit receipt

A bank shall issue term deposit receipt indicating therein full details, such as, date of
issue, period of deposit, due date, applicable rate of interest, etc.

15. Payment of interest on term deposit maturing on Sunday/holiday/

non-business working day.
In case of reinvestment deposits and recurring deposits, banks should pay
interest for the intervening Sunday/holiday/non-business working day (as also
Saturday in case of NRE deposits) on the maturity value. However, in the case of
ordinary term deposits, the interest for the intervening
Sunday/holiday/non-business working day (as also Saturday in case of NRE
deposits) should be paid on the original principal amount.
In respect of a term deposit maturing for payment on a Sunday or a holiday or a
non-business working day, or Saturday in case of NRE deposits, bank shall pay interest

:34
at the originally contracted rate on the deposit amount for the
Sunday/holiday/non-business working day and also Saturday in case of NRE deposits,
intervening between the date of the expiry of the specified term of the deposit and the
24 7
date of payment of the proceeds of the deposit on the succeeding working day.
21
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16. MINIMUM BALANCE IN SAVINGS BANK ACCOUNTS

At the time of opening the accounts, banks should inform their customers in a
transparent manner the requirement of maintaining minimum balance and levying of
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charges etc., if the minimum balance is not maintained. Any charge levied subsequently
should be transparently made known to all depositors in advances with one month’s
notice. The banks should inform, at least one month in advance, the existing account
holders any change in the prescribed minimum balance and the charges that may be
5

levied if the prescribed minimum balance is not maintained.

17. No frills account

With a view to achieve the objective of greater financial inclusion all banks should make
available a basic banking ‘no frills’ account either with ‘nil’ or very low minimum balances
30

as well as charges that would make such accounts accessible to vast sections of
population. The nature and number of transactions in such accounts could be restricted,
but made known to the customer in advances in a transparent manner. All banks should
give wide publicity to the facility of such no frills account including in the local media
indicating the facilities and charges in a transparent manner.

18. Prohibitions
No bank should -
(a) Pay interest on Current Account
(b) Discriminate in the matter of interest paid on deposits, between one deposit and
another, accepted on the same date and for the same maturity, whether such deposits
are accepted at the same office or at different offices of the bank,
(c) pay brokerage in the form of commission or gift or incentives on deposits in any
manner or in any other form to any individual, firm, company, association, institution or
any other person except -
(d) Commission paid to agents employed to collect door-to-door deposits under aspecial
scheme.
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(e) employ/ engage any individual, firm, company, association, institution or any other
person for collection of deposit or for selling any other deposit linked products on
payment of remuneration or fees or commission in any form or manner, except to the
extent permitted in sub-clause (i) of clause (d) above.
(f) Launch prize/lottery/free trips (in India and/or abroad), etc. oriented deposit
mobilization schemes.
(g) Resort to unethical practices of raising of resources through agents/third parties to
meet the credit needs of the existing/prospective borrowers or to grant loans to the
intermediaries based on the consideration of deposit mobilization.
(h) Issue any advertisement/literature soliciting deposits from public highlighting only the
compounded yield on term deposits without indicating the actual rate of simple interest
offered by the bank for the particular period.
(i) Pay interest on margin money held in current account.
(j) pay interest on “deposit at call” receipts issued by it to the tenderers (contractors) for
submission to Government Departments/Semi-Quasi Government bodies, local bodies,
etc. against the money held in current account.
(k) Accept interest-free deposit other than in current account or pay compensation

:34
indirectly.
(l) accept deposits from/at the instance of private financiers or unincorporated bodies
under any arrangement which provides for either issue of deposit receipt/s favouring
24 7
client/s of private financiers or giving of an authority by power of attorney, nomination or
21
other-wise, for such clients receiving such deposits on maturity.
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(m) Grant advances against fixed deposit receipts or other term deposits of other banks.

19. PROHIBITION AGAINST OPENING OF SAVINGS BANK ACCOUNTS IN THE

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NAME OF CERTAIN BODIES/ORGANISATIONS

(Vide paragraph 9.1.3 Manual of Instructions (June 1998): Department of Banking
Operations and Development, Reserve Bank of India)
i) Savings deposit account cannot be opened by banks in the name of:
5

. Government departments
• Bodies depending upon budgetary allocations for performance of their functions.
• Municipal Corporations or Municipal Committees
• Panchayat Samities
• State Housing Boards
30

• Water and Sewerage/Drainage Boards

• State Text Book Publishing Corporations
• Societies
• Metropolitan Development Authority
• State/District Level Housing Co-op. Societies, etc.
• Any trading, business or professional concern (e.g. firms of Chartered Accountants,
Lawyers, etc.) whether such concern is a proprietary or a partnership firm or a company
or an association
• Political Party
ii) The above prohibition will not apply in the case of the following
organizations/agencies:
• Primary Co-operative Credit Society which is being financed by the bank
• Small Farmers’ Development Agencies (SFDA)/Fish Farmers’ Development
Agencies (FFDAs)
• Marginal Farmers’ and Agricultural Labourers’ Agencies (MFALAs)
• Drought Prone Areas Programme (DPAP)
• District Development Authority (DDA)
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• District Rural Development Agency/Society (DRDA/DADS)
• Integrated Rural Development Programme (IRDP)/Development of Women and
Children in Rural Areas (DWCRA)/Self-Help Groups (SHGs), registered or
unregistered, which are engaged in promoting savings habit among their
members/Farmers Clubs-Vikas Volunteer Vahini (VVV), informal groups of rural farmers
or entrepreneur.
• Integrated Tribal Development Agency (ITDA)
• Agricultural Produce Market Committees
• Khadi and Village Industries Boards
• Societies registered under the Societies Registration Act, 1860 or any other
corresponding law in force in State or a Union Territory.
• Companies governed by the Companies Act, 1956 which have been licensed by the
Central Government under Section 25 of the said Act, or under the corresponding
provision in the Indian Companies Act, 1913 and permitted, not to add to their names the
words ‘Limited’ or the words ‘Private Limited’
• Institutions other than those mentioned in clause (i) above and whose entire income is
exempt from payment of income-tax under the Income-Tax Act, 1961.

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• ZillaParishads/Gram Panchayats only in respect of Jawahar Rojgar Yojana Funds
• Nagar Panchayats, Nagar Palikas and Municipal bodies in relation to funds (Central
assistance + State share) given under Nehru Rozgar Yojana towards the components of
24 7
(i) Subsidy and (ii) Training and Infrastructure of the Scheme of Urban Micro Enterprise
21
(SUME) and Scheme of Urban Wage Employment (SUWE) and interest earned on
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deposits under both the components of SUME and on deposits under SUWE subject,
however, to the condition that no such account shall be opened with a bank other than
public sector bank.
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(Reference: BA & RM DIVISION – SAVING DEPOSIT, DEBIT CARD, NRI BUSINESS

& OTHER LIABILITIES BUSINESS CIRCULAR No 16/2023 dated 25.07.2023)
30 5

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 CASH MANAGEMENT (IAD CIRCULAR 32/2016)

1. Cash balance must be kept in the strong room in the joint custody of the ‘Head
Cashier’ and the Incumbent Incharge or the Deputy Manager/Manager/Sr. Manager
(referred to as ‘Cash Incharge’) (jointly referred to as ‘Custodians of Cash’).

1.1 In the event of the ‘Head Cashier’ falling sick & absenting himself from the office
and there is no other SWO working in the branch, the cash balance may be kept
in joint custody of Incumbent Incharge and the senior most Supervisory Staff
after taking over complete charge of the cash from the Head Cashier and giving a
receipt there for in the daily cash balance book and the cash reserve register.

1.2 At offices, where it is not possible to take charge of the cash jointly with the
‘Senior-most Supervisory Staff’, the Incumbent Incharge should take-over
complete charge of the cash from the Head Cashier. Until the availability of
substitute, cash may remain under the single custody of the Incumbent Incharge
and matter would be taken up with Circle Office, through fastest means of

:34
communication.

2. The cash safe/s should always be under double lock and should be secured each
24 7
time these are opened in the presence of both the Custodians. Every entry in the cash
21
reserve book must be authenticated by both the joint Custodians. Under no
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circumstances both the keys be given to one Official to singly deposit/withdraw the cash
from the safe. The strong room must remain under the double lock of the ‘Custodians of
cash’.
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2.1 Before the strong room is opened for taking out or deposit of cash, the main door
of the branch should be closed and persons, unconcerned with cash, should not be
allowed access to the strong room and it should remain so till the transaction is
5

complete.

2.2 It should be ensured that the armed guard has taken necessary precautions
including checking of fire arms etc. and is in a position to guard the cash in case of
need. Whenever the strong room is opened, presence of both the Custodians of Cash is
30

a must and neither of them should enter the strong room except in the presence of the
other. After entering the strong room and before opening the cash safe, the grill door of
the strong room should be closed from inside. The cash safes in the strong room should
also be under their double lock and should be secured each time these are
opened. Gold/silver Jewellery/ornaments pledged against advances granted against
these and also the articles kept in safe custody of Bank must also remain in the joint
custody of the joint custodians of cash.

3. All notes and coins withdrawn from or deposited in the joint custody of the custodians
will be entered immediately in the cash reserve register (PNB-31), under initials of both
the custodians of cash. The cash reserve register will remain in the strong room during
the day and overnight, the register shall be kept outside the safe at secured place. The
balance of cash remaining in the strong room will be entered at the time of each
transaction in the cash reserve register and will be agreed at the close of business each
day with the daily cash balance book (PNB-107).

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4. Particulars of cash balance at the close of business each day will be recorded in the
daily cash balance book (PNB-107), which will be checked and signed by the custodians
of cash after ensuring that the cash balance tallies with the closing balance recorded in
the cash book.

BANDING PROCEDURE OF NOTE PACKETS

5. Consequent upon implementation of Clean Note Policy of RBI w.e.f. 01.01.2003, all
the branches are advised to accept and issue only unstapled notes and to do away with
stapling of any note packets and instead secure note packets with paper/rubber bands
only.

6. CASH PAYMENT TO CUSTOMERS

(i) At the beginning of day, SWO handling the cash receives from the Head
Cashier, the cross-banded packets of issuable notes for payment to the
customers against duly authenticated payment voucher.

:34
(ii) Where the cross banded packet is to be broken for making payment in
loose notes, the paying SWO shall first count notes in the packet by breaking its
horizontal (length wise) band and, on finding the number of notes in order in all
24 7
respects, shall break the vertical (breadth wise) band as well to make the
21
payment. While counting, if any shortage or if some fake/mutilated notes are
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found, the SWO will immediately bring it to the notice of the Head Cashier before
breaking the vertical (breadth wise) band.
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(iii) The customer will count the note after breaking the horizontal (length
wise) band only and satisfy himself before leaving the counter.

7. CASH REMITTED BY BRANCHES TO CURRENCY CHESTS

5

(i) The branch will remit not only cross banded packets of non issuable notes
to currency chests but also cross banded packets of issuable notes which are in
excess of the cash retention limit of the branch.
30

8. CASH REMITTED BY CURRENCY CHEST TO BRANCHES

(i) Currency chest will not issue non-issuable notes to branches. These
would be remitted to RBI only.

(ii) The SWO/officer receiving the cash from Currency Chest, will count the
number of packets handed over to him by the currency chest and satisfy himself
that the value of these is equal to the cash shown as paid. He will not put his
signature on the packets but should ensure that all the packets are properly
banded and bear full signatures (with full name and date) of the SWOs of the
currency chests.

On receiving cash at the branch from currency chest, the Head Cashier will again
count only the number of packets and not the individual notes therein. He will not
put his signature on these packets.

CHECKING OF CASH BALANCE

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9. Before taking notes and coins into joint custody, the Cash Incharge must satisfy
himself as to the correctness of the cash thus deposited.

10. At the close of each business day, the Cash Incharge will conduct a complete
checking of one or more items of cash, selected at random, every evening while keeping
cash in strong room. He / she will satisfy himself / herself, by counting packets and test
checking of one or more packets, as he / she deems necessary, that the cash balance in
hand corresponds exactly with the details given in the daily cash balance book.

11. At irregular intervals of not exceeding a fortnight, the entire cash in hand will be
checked alternatively by Incumbent Incharge and Manager/Deputy Manager (one of the
custodian) and a certificate to this effect will be appended in the daily cash balance
books.

12. The Incumbent Incharge will ensure that the cash balance in hand/on the counter
is kept as low as conveniently possible.

:34
13. Any shortage in the cash balance, however occasioned, should be recovered the
same day from the concerned SWO / Head Cashier at fault, if possible. Failing recovery
the same day, the amount must be debited to appropriate sub-head of '‘Non Borrowal
24 7
21
Impaired Assets’ account under advice to the Circle Head and Inspection and Audit
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Division, HO.

REMITTANCES AND RECEIPT OF FUNDS BY BRANCHES

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14. Remittances should not be confined to Fridays. As & when there is cash beyond
the retention limit of branch, the excess cash should be remitted to Currency Chest.
5

CASH REMITTANCES (IAD CIRCULAR 18/2017)

15. The guideline on constitution of escort team for remittance of cash is given
hereunder:

Sl.No Amount of Remittance Composition of Escort Team

30

1. Not Exceeding Rs 20 lacs One Clerk or One Officer

2. Above Rs 20 lac but not exceeding May be two Clerks or One Clerk and
Rs 50 lac One Officer or One Clerk and One
Guard (with or without arms)
irrespective of whether the insured own
vehicle is used or private vehicle is
engaged.

3. Above Rs 50 lac but not exceeding Minimum One Clerk and One Officer +
Rs 5 crore two armed Guards with fire arms
irrespective of whether the insured own
vehicle is used or private vehicle is
engaged.

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16. Where a cash van is not available, a hired vehicle should be used while selecting
such vehicle; a taxi should be preferred to a three wheeler scooter and later to a cycle
rickshaw.

17.While hiring a transport as far as possible, efforts should be made to call it from a
distant stand and vehicle parked near the branch should not be used.

18.The cash container should, as far as possible, be chained to the seat of the vehicle
and should be ensured that this arrangement is available in the vehicle and the doors
can also be locked from inside.

19. Great secrecy should be maintained regarding the dispatch of cash remittances and
routes, where traffic bottlenecks are a common feature, should be avoided.

20. The cash, the vehicle, the armed escort, the accompanying SWO etc. should be
ready well before the actual time of loading the cash. The cash containers, to be used

:34
for the remittance, should be kept ready, as soon as it is decided to transport cash and
should be securely locked. Before taking out the cash for transportation and ready to
leave, the armed guard should first go out and ensure that there is no danger and that no
24 7
suspicious characters are hanging around. Cash should be taken out of the strong
21
room only after an assurance/signal to the effect that there is no apparent danger, is
-20 52

received from the armed guard. The cash container should be placed in the cash van
only when the driver is ready in his seat to move and van engine is already started.
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21. No unconcerned employee/outsider should be allowed to travel in the cash van/

vehicle carrying cash. If enroute, the driver encounters any blockade of road/unexpected
diversion, he should change the route or return to the nearest police station or branch. If
the vehicle has to stop enroute for some reason, the inmates should avoid entering into
5

conversation, with any outsider.

22. Discussions about cash remittances should be restricted to those people directly
concerned with the remittances and should be held only at secure places.
30

23. When the cash is taken for deposit with local branch, currency chest/other bank, or
Reserve Bank of India, the van should be parked as near to the entrance of the receiving
office as possible. The SWO should open the remittance in the presence of joint
custodian of the cash and have the cash counted in his presence and obtain a receipt on
the counterfoil of the relative pay-in-slip. However, while counterfoil duly receipted for
the cash deposited, may be given to the remitting branch by the receiving branch, the
Non Customer Inter Branch A/c (3171160) of remitting Branch should be credited giving
details of amount remitted. The remittance box should be opened in the strong room
after observing necessary safeguards. Any discrepancy should be pointed out
immediately and signature of the SWO of remitting branch obtained.

24.Remittance of cash for branches in Naxal hit areas: There are certain branches of
the bank located in states where Naxalites and Maoists are active, such as Chattisgarh,
Jharkhand, West Bengal, Orissa, Andhra Pradesh, Maharashtra and Bihar (and other
states/ areas which may get affected by similar conditions where looting of arms by ultras
is main reason to attack banks cash movements. Hence, remittance of cash in these
areas using guards with weapon is more likely to be targeted by the ultras. Remittance
151 | P a g e
in such affected areas will, therefore, be done without arms escort, irrespective of
amount. A letter from the bank indicating this procedure to be as per the banks
internal guidelines will be made available in case of a claim.

EXCHANGE OF CASH BETWEEN CSAs AND PROPER MAINTENANCE OF

RECORDS OF SUCH EXCHANGES

25. Where more than one CSAs are posted/deployed in any branch, the exchange of
cash between two CSAs is required to be done through proper receipts against signature
of the receiving CSA(s) in the paying CSA’s Long Book or Kacha Book. Similarly, every
time the cash is received from (taken from) or passed on (handed over) to the head
cashier, the concerned CSA must ensure that the same is properly recorded in their
respective long book against proper receipt and under no circumstances any drawals or
deposits of cash are done without proper recording/authentication in the SWO’s long
book.

26. All cases of robberies/dacoities /thefts/shortage in cash, actual or suspected cases

:34
of frauds or attempts thereof should be reported to respective Circle Head under copy to
Inspection and Audit Division by quickest means of communication besides lodging a
report with the police.
24 7
21
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5
30

152 | P a g e
 DETECTING AND IMPOUNDING OF COUNTERFEIT CURRENCY NOTES

(GBD Circular No. 31/2023 Dated10.04.2023)

Guidelines regarding detection and impounding of Counterfeit currency notes have been
issued by Reserve Bank of India. As per these guidelines, following offices are
authorized to impound counterfeit currency Notes:
i) All Banks
ii) All Treasuries and Sub- Treasuries
iii) Issue Offices of Reserve Bank of India

Detection of counterfeit notes:

Banknotes tendered over the counter / received directly at the back office / currency
chest through bulk tenders should be examined for authenticity through machines.
No credit to customer’s account is to be given for counterfeit notes, if any, detected in the
tender received over the counter or at the back-office / currency chest.
In no case, the counterfeit notes should be returned to the tenderer or destroyed by the

:34
bank branches / treasuries. Failure of the banks to impound counterfeit notes detected at
their end will be construed as wilful involvement of the bank concerned, in circulating
counterfeit notes and penalty will be imposed for violation of guidelines dated November
24 7
19, 2009 issued by the Reserve Bank of India in this regard.
21
-20 52

Impounding of counterfeit notes & Issue of Receipt to Tenderer:

Notes determined as counterfeit shall be stamped as "COUNTERFEIT NOTE" and
impounded in the prescribed manner. Each such impounded note shall be recorded
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under authentication, in a separate register.

Each banknote, which, on examination of various security features / parameters, is
determined as a counterfeit one, shall be branded with a stamp "COUNTERFEIT
BANKNOTE". For this purpose, a stamp with a uniform size of 5 cm x 5 cm with the
5

following inscription may be used.

COUNTERFEIT BANKNOTE IMPOUNDED

BANK / TREASURY/ SUB-TREASURY :
BRANCH / CURRENCY CHEST
30

:
DATESIGNATURE

When a banknote tendered at the counter of a bank branch/back office and currency
chest or treasury is found to be counterfeit, an acknowledgement receipt in the
prescribed format must be issued to the tenderer, after stamping the note as
"COUNTERFEIT NOTE". The receipt, in running serial numbers, should be
authenticated by the cashier and tenderer. Notice to this effect should be displayed
prominently at the offices / branches for information of the public. The receipt is to be
issued even in cases where the tenderer is unwilling to countersign it.

Reporting to Police and other bodies

The following procedure should be followed while reporting incidence of detection of

counterfeit note to the Police:

153 | P a g e
 - For cases of detection of counterfeit notes up to 4 pieces, in a single transaction, a
consolidated report in the prescribed format should be sent by the Nodal Bank
Officer to the police authorities or the Nodal Police Station, along with the suspect
counterfeit notes, at the end of the month.
- For cases of detection of counterfeit notes of 5 or more pieces, in a single
transaction, the counterfeit notes should be forwarded immediately by the Nodal
Bank Officer to the local police authorities or the Nodal Police Station for
investigation by filing FIR in the prescribed format.
Acknowledgement of the police authorities concerned has to be obtained for note/s
forwarded to them both as consolidated monthly statement and FIR. If the counterfeit
notes are sent to the police by insured post, acknowledgement of receipt thereof by the
police should be invariably obtained and kept on record. A proper follow-up of receipt of
acknowledgement from the police authorities is necessary. In case, any difficulty is faced
by the Offices / Branches due to reluctance of the police to receive monthly consolidate
statement / file FIRs, the matter may be sorted out in consultation with the Nodal Officer
of the police authority designated to coordinate matters relating to investigation of
counterfeit banknotes cases. The list of Nodal Police Station may be obtained from the

:34
respective Regional Office of Reserve Bank.
Branches should also monitor the patterns / trends of such detection and
suspicious trends / patterns should be brought to the notice of RBI /Police authorities
24 7
immediately. 21
The progress made by banks in detection and reporting of counterfeit notes to Police,
-20 52

RBI, etc. and problems thereof, should be discussed regularly in the meetings of various
State Level Committees viz. State Level Bankers’ Committee (SLBC), Standing
Committee on Currency Management (SCCM), State Level Security Committee (SLSC),
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etc.
The data on detection of counterfeit Indian notes at bank branches & treasuries should
be included in the monthly Returns forwarded to the Reserve Bank Issue Offices.
Under Rule 3 of Prevention of Money Laundering Rules, 2005, Principal Officers of
5

banks are also required to report information on cash transactions where forged notes
have been used as genuine note to The Director, FIU-IND, Financial Intelligence Unit-
India, 6th Floor, Hotel Samrat, Chanakyapuri, New Delhi-110021, within seven working
days.
A “nil “report may be sent in case no counterfeit has been detected during the month.
30

Preservation of Counterfeit Notes Received back from Police Authorities

All Counterfeit Notes received back from the police authorities/courts may be carefully
preserved in the safe custody of the bank and a record thereof be maintained by the
branch concerned. Forged Note Vigilance Cell of the bank shall also maintain a
branch-wise consolidated record of such Counterfeit Notes.
These Counterfeit Notes at branches should be subjected to verification on a
half-yearly basis (on 31st March and 30th September) by the Officer-in- Charge of the
bank office concerned. They should be preserved for a period of three years from the
date of receipt from the police authorities.
They may thereafter be sent to the concerned Issue Office of Reserve Bank of India with
full details.
Counterfeit notes, which are the subject matter of litigation in the court of law, should be
preserved with the branch concerned for three years after conclusion of the court case.

Examination of the Banknotes before Issuing over Counters, Feeding

154 | P a g e
ATMs and Remitting to Issue Offices of the Reserve Bank
The banks should re-align their cash management in such a manner so as to ensure
that cash receipts in the denominations of ₹100 and above are not put into
recirculation
without the notes being machine processed for authenticity. The said
instructions shall be applicable to all bank branches, irrespective of the volume of
daily cash receipt. Any non-compliance will be construed as violation of the Directive
No.3158/09.39.00 (Policy)/2009-10 dated November 19, 2009 issued by the
Reserve Bank

RBI NOTE REFUND RULES, 2009

Introduction
The Reserve Bank has been extending facilities to the public for exchanging cut and
mutilated notes at all its Issue Offices and currency chest branches of commercial banks.
In order to make the Note Refund Rules easy to understand and to apply, these have

:34
been comprehensively revised and simplified. It has also been decided that any officer of
the designated branch can adjudicate mutilated notes presented thereat. It is hoped that
simplification and liberalisation of the Rules would help both, the prescribed officers as
24 7
well as the tenderers of mutilated notes to easily comprehend the revised Rules and
21
enable the former to apply the Note Refund Rules without leaving any scope for
-20 52

subjectivity.

While the facility for exchange of soiled notes is to be provided by all banks at all of their
-11 216

branches, the facility of exchange of mutilated notes would be available at designated

bank branch/es (including cooperative banks and RRBs) to all tenderers whether they
are account holders or not. This is a duty that the banking system as a whole owes to the
public. It needs no emphasis that the object of simplification of RBI Note Refund Rules
5

and its extension is to help members of the public exchange the cut/mutilated notes in
their possession without difficulty. The designated bank branches should play an active
role and ensure that the facility is operated for the benefit of the members of public at
large and is not pre-empted by a group of persons.
30

General provisions in relation to all claims-

(1) No claim in respect of a note, which is alleged to have been stolen, lost or wholly
destroyed, shall be entertained.
(2) If the Prescribed Officer is satisfied that a mutilated note presented before him is
one which appears to have been cancelled at any office of the Bank or the claim is
one which appears to have already been paid under these rules, he may, after
making enquiries under rule 5 above reject the claim on such note.
(3) A claim in respect of a note, which, -
i. cannot be identified with certainty as a genuine note for which the Bank is liable
under the Act;
ii. has been made imperfect or mutilated, thereby causing the note to appear to be of
a higher denomination, or has been deliberately cut, torn, defaced, altered or
dealt with in any other manner, not necessarily by the claimants, enabling the use
of the same for making of a false claim under these rules or otherwise to defraud
the Bank or the public,

155 | P a g e
 iii. carries any extrinsic words or visible representations intended to convey or
capable of conveying any message of a political or religious character or
furthering the interest of any person or entity;
iv. has been imported into India by the claimant from any place outside India in
contravention of the provision of any law;
v. any information called for by the Prescribed Officer or the Bank, as the case may
be, is not furnished by a claimant within a period of three months from the date of
receipt of the notice or letter asking for the information, or
vi. in the opinion of the Prescribed Officer, a deliberate fraudulent intention appears
in respect of such a claim shall be rejected and shall not be eligible for
consideration under any other Law for the time being in force.

Imperfect note –
The value of an imperfect note may be paid for full value/half value as specified
in Note Refund rules, if-,
a. the matter, which is printed on the note has not become totally illegible , and
b. the Prescribed Officer is satisfied, having regard to the printed matter which is

:34
legible on the note, that it is a genuine note.
Mutilated notes-
(1) The adjudication of claims in respect of notes of one rupee, two rupee, five
24 7
rupee, ten rupee and twenty rupees denomination shall be made in the following
21
manner, namely,
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(i) if the area of the single largest undivided piece of the note presented is more
than 50 percent of the area of the respective denomination, rounded off to the
next complete square centimetre, full value on mutilated notes of the above
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denominations shall be payable;

(ii) If the area of the largest undivided piece of the note presented is less than or
equal to 50 percent of the area of the note, the claim shall be rejected.
5

Explanation: For the purposes of this sub-rule, it is hereby clarified that the value
of a mutilated note of one rupee, two rupee, five rupee, ten rupee and twenty
rupees denomination may be refunded in full if the undivided area of the single
largest piece of the note, as specified in the Table-1 below, presented is equal to
or more than 31, 34, 38, 44, and 47 square centimetres (cms) respectively.
30

156 | P a g e
 2) The payment of claim in respect of note of rupees fifty and above
denominations shall be made in the following manner, namely-,
(i) Full value of the mutilated notes of the above denominations shall be payable if
the area of the single largest undivided piece of the note presented is more than
80 percent of the area of the respective denomination rounded off to the next
complete square centimetre;
(ii) if the undivided area of the single largest undivided piece of the note presented
is equal to or more than 40 percent and less than or equal to 80 percent of the
area of the respective denomination rounded off to the next complete square
centimetre, half the value of the note is payable.
(iii) If the area of the single largest undivided piece of the note is less than 40
percent, no value shall be payable, and the claim shall be rejected.
(iv) if the claim of mutilated notes of rupees fifty to rupees one thousand
denomination notes consists of a note composed of two pieces of the same note
and the two pieces, individually, have an area equal to or more than 40 percent of
the total area of the note in that denomination, then the claim may be refunded for
full value and need not be treated as consisting of two tenders for half value.

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Explanation: For the purposes of this sub-rule, it is hereby clarified that, as
specified in Table-2 below,-
24 7
(a) if the area of the single largest undivided piece of the mutilated note of rupees
21
fifty, rupees one hundred, rupees five hundred and rupees one thousand note
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presented is at least 70, 75, 80 and 84 square centimetres, respectively, the same
may be paid for full value;
(b) if the area of the largest undivided piece is less than as specified above, the
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claim may be considered for payment of half value as provided for at clause 2(ii)
of sub-rule 8 above;
(c) the value of a mutilated bank note of rupees fifty, rupees one hundred, rupees
five hundred and rupees one thousand may be paid for half value, if the area of
5

the single largest undivided piece of the note presented is at least or more than
43, 46, 49 and 52 square centimetres, respectively.
(d) if the area of the single largest undivided piece is less than the above
specification, the claim shall be rejected.
30

157 | P a g e
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24 7
21
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Payment of claim in respect of mismatched note- The payment of claim in

respect of a mismatched note may be dealt with as follows, namely-,
a. in case of notes upto rupees twenty denomination notes, the area of the larger of
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the two pieces presented may be measured and adjudicated as per the provisions
of sub-rule (1) of Rule 8, ignoring the smaller half.
b. if none of the two pieces presented meets the minimum area stipulated as per the
provisions of clause (i) of sub-rule 1 of rule 8 above, the claim shall be rejected.
5

c. in case of rupees fifty and above denominations, the two pieces may be treated as
two separate claims and dealt with accordingly.
Claimants to be bound by rules-
(1) Any payment which is provided under these rules shall be made only as matter
of grace and the Bank may, as it deems fit, from time to time issue such
30

supplementary or detailed instructions for carrying out the provisions of these

rules, for the guidance of the Prescribed Officer.
(2) Any person who makes any claim on account of an imperfect note or mutilated
note shall be deemed to have made the said claim under the proviso to section 28
of the Act and subject to the provisions of these rules, which shall be deemed to
be binding on all claimants and their heirs or assigns.

Retention and destruction of note- Notwithstanding the denomination of a note or the

decision of the Prescribed Officer on the claim, a note presented before the Prescribed
Officer for the purpose of making a claim shall be retained and destroyed or otherwise
disposed of by the Bank in the following manner, namely-,
a. in the case of a note in respect of which full payment is made, at any time after the
payment; and
b. in the case of a note in respect of which no payment is made, or on which half
value payment has been made, on the expiry of a period of three months from the
date of the decision rejecting the claim or to pay half-value, as the case may be,
unless within this period, an order from a competent Court is submitted to any

158 | P a g e
 office of the Bank or branch of the designated bank restraining the Bank from
destroying or otherwise disposing of the said note.

Payment to Legal heirs or nominees-

(1) If a claimant who has submitted a claim under these rules, is dead, his
legal representatives shall be eligible to receive the payment due to the
claimant subject to the determination of the claim by the Prescribed
Officer.
(2) The legal representatives shall be entitled to receive the payment due to
the claimant, if any, upon furnishing to the Prescribed Officer an indemnity
bond executed by the legal representative in favour of the branch or office
of the Bank or any other institution or entity as designated by the Bank for
this purpose; Provided payment upto an amount of rupees five hundred
may be made to the legal heir of the claimant on a declaration for this
purpose.
(3) In case of mutilated note presented at the Bank through Triple Lock
Receptacle (TLR) cover, the tenderer shall indicate his name and address

:34
alongwith other details, such as, bank account number, etc. as specified
on the cover, and the individual tenderers, may, at their option, in addition,
also indicate on the cover, the name and address of the nominee who may
24 7
receive the amount that is determined to be due on the claim without
21
production of indemnity, subject to proper identification.
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Stamp Duty- The value of the stamp duty on the indemnity bond shall be paid by
the person executing the bond.
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Procedure when payee is untraced-

(1) In case of the note having been adjudicated at the office of the Bank, the value
or part of the value of a note is payable to the claimant and if such claimant, is not
5

found or is dead, his legal representatives or the nominee specified by him cannot
be found or fails within a period of three months from the date of communication to
him the decision to take steps to receive payment, the amount payable shall be
paid to the Banking Department of the Bank.
(2) In case of the mutilated note having been adjudicated at the branch of
30

designated bank or other entities, such payment may be credited with the Issue
Office of the Bank after a period of three months from the date of communication
to the tenderer of the decision to take steps to receive the exchange value.

Procedure for receipt, adjudication, payment and disposal of / mutilated notes at

designated bank branches

1. Branches where facilities are available:

For the benefit and convenience of the public, Reserve Bank of India has
authorized the designated branches of the banks to accept exchange and pay the
admissible exchange value of mutilated notes in accordance with the Reserve
Bank of India (Note Refund) Rules, 2009 or reject such mutilated notes as are not
payable under these Rules.

2. Which notes shall be accepted?

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 The branches shall accept notes in the denomination of Rs. 1, 2, 5, 10, 20, 50,
100, 500, 1000 (and such other denominations of notes that may be issued in
future) for exchange under the Rules.
Further, such notes which have turned extremely brittle or are badly burnt,
charred, inseparably stuck together and therefore cannot withstand further
handling or which may lose their original identity with the passage of time shall not
be accepted by the branches for exchange. The holder/s of such notes may be
advised to tender them to the In- charge, Issue Department of the Reserve Bank
of India under whose jurisdiction the currency chest falls where such notes will be
examined under Special Procedure.

3. From whom notes shall be accepted

The branches shall freely accept the notes from any one who wishes to get his/her
mutilated notes exchanged from the branch. For serving a larger section of the
public the branch may, if necessary impose a reasonable restriction on the
number of the notes to be tendered at a time by an individual tenderer. Large
quantity of notes may be accepted from the Government Departments and banks

:34
by mutual arrangements. The branches shall take steps to see that the exchange
facilities are not cornered by private money changers or professional dealers of
defective notes.
24 7
4. How the notes should be accepted
21
The notes may be accepted over the counter. On receipt of the notes,a paper
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token in form DN –I in duplicate indicating the number of pieces of notes and their
value in each denomination may be prepared. The receiving staff /official should
also authenticate the total pieces and value on both copies of the token by
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subscribing his initials. The original should be handed over to the tenderer. The
duplicate should be attached to the notes and the token together with the notes
should be passed on to the prescribed officer for adjudication. The notes should
be securely fastened to the relative tokens to avoid mix-up of tenders covered by
5

different tokens. It should further be ensured that the notes do not get damaged
during receipt and transmission to the prescribed officer. The paper tokens should
be serially numbered. To avoid disputes that may be raised by the tenderers in
respect of rejected notes, it is advisable to write the token number on all the notes
tendered. The details of each tender should be recorded in the register inform
30

DN-2.

5. Prescribed Officer - Adjudication and payment:

Prescribed officer is the officer who has been authorized to adjudicate the
mutilated notes by the designated branch as defined in Section 2(j) of the RBI
(Note Refund) Rules 2009 for the purpose of adjudication of the mutilated notes
under the Rules. He shall examine each and every mutilated note on its merit and
decide its playability strictly according to the Rules. He shall record his 'Pay' order
by subscribing his initial to a pay stamp, to be affixed on the notes, which are
found payable by him under the Rules. Similarly, he shall, by subscribing his
initials to dated 'Reject' stamp affixed on the note, record his rejection order
indicating rules 6(3),8(1)(ii) ,8(2)(iii) and Explanation (d) under which the claim is
rejected. The pay or rejection order should be put on front side of the note and not
on any paper used for pasting the notes etc. or on the reverse side of the note.
The prescribed officer shall also record his orders on the duplicate paper token
attached etc. the notes and get the rejection advice in form DN-3 prepared. The

160 | P a g e
 notes with the covering token should then be sent back to the counter for making
payment to the tenderer.

The Prescribed Officer may if necessary, get the badly pasted notes, re-pasted
before their adjudication. He shall act with due diligence while exercising the
powers under these Rules in order to ensure that no notes payable under them
are rejected and no notes not payable are paid. If any paid notes are later on
found by Reserve Bank of India not to be payable under the above Rules, the
Bank may recover the value of loss from such of the authorized bank. The
authorized bank branch shall abide by the decisions of the Reserve Bank of India,
in this regard, who in pursuance of the above Rules is the ultimate authority in
whom the powers to make, issue, amend, interpret and enforce the Rules are
vested.

6. Payment
After receipt of the notes with the covering paper token from the prescribed
officer, the counter staff shall check that the PAY and REJECT orders have been

:34
properly recorded on all the notes and the paper token. He shall then pay to the
tenderer the exchange value of the notes ordered to be paid and also issue him
rejection advice in form DN-3 in respect of rejected notes, if any, on his
24 7
surrendering the original token issued to him with his name and address duly
21
written on the reverse of it. He shall then affix the dated 'PAID' stamp on the notes
-20 52

(on the obverse side) on which the exchange value is paid. In no case the rejected
notes shall be given back to the tenderer. After completion of payment, the paid
and the rejected notes should be segregated. The original token surrendered by
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the tenderer should be attached to the rejected notes. It should be carefully noted
that notes on which half value has been paid should be kept with the rejected
notes for easy retrieval, should the tenderer choose subsequently to question the
payment of half value instead of full value. In the branches which do not have a
5

currency chest of the Reserve Bank of India, the paid and rejected notes shall be
held separately along with branch cash balance. The Branch Manager shall have,
however, overall responsibility for the proper and safe custody of the notes. It
must be clearly understood that both paid and rejected notes are to be retained by
the bank on behalf of the Reserve Bank of India and their disposal in any manner
30

will be subject to such directions that the Reserve Bank may give in this regard.

In the branches having currency chests, the 'paid' notes only shall be deposited in
the currency chest in multiples of Rs.500/- with a minimum of Rs.1000/-. The half
value paid notes and rejected notes shall, however, be held separately along with
the cash balance of the branch.

7. Accounting for notes adjudicated

The full value paid notes may be treated on par with non-issuable notes and shall
be kept as part of the currency chest balances following the procedure prescribed
for depositing non-issuable notes. These notes should be shown in the currency
chest slip as non-issuable notes. The paid notes shall be held distinct by
segregating them from soiled notes to be sent to the Reserve Bank of India and
storing them in separate receptacle. These notes may be packed separately and
sent along with soiled notes at the time of remitting soiled notes to the Issue
Department of Reserve Bank of India. The half value notes and the rejected notes

161 | P a g e
 shall be kept separately along with the cash balance of the branch and in no case
they shall be kept deposited with the full value paid notes in the chest.
The non-chest branches shall send notes adjudicated by them for deposit to the
linked currency chest who in turn will remit to the Reserve Bank of India alongwith
soiled note remittance.

8. Verification and transfer of adjudicated notes:

Notes adjudicated for full value may be sent along with the soiled note remittance
separately. A qualitative and quantitative verification of such notes would be
undertaken in Reserve Bank of India. Such notes would be treated as a chest
remittance and accounted for accordingly.
Half Value paid notes and Rejected notes may be sent separately to Claim
Section, Issue Department of RBI. The prescribed officer should ensure that the
preservation period of three months as laid down in Note Refund Rules is over,
before sending them to RBI. However the details of the tenderer in DN-2 have to
be preserved for payment to him. These notes would be accounted as a receipt
from that currency chest-holding branch. These notes would be subject to audit at

:34
the Reserve Bank of India to ensure that none of the rejected notes are payable
for any value and none of the half value paid notes payable for full value. As the
half value paid and rejected notes would have already completed the required
24 7
period of preservation, they would be destroyed by the Issue Department of
21
Reserve Bank of India as deemed appropriate.
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Facility for exchange of notes and coins at bank branches

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(a) All branches of banks in all parts of the country should provide the following
customer services, more actively and vigorously to the members of public
so that there is no need for them to approach the RBI Regional Offices for
this purpose:
5

(i) Issuing fresh / good quality notes and coins of all denominations on
demand,
(ii) Exchanging soiled / mutilated / defective notes, and
(iii) Accepting coins and notes either for transactions or exchange.
Exchange of mutilated and imperfect notes
30

6.2.1 While designated branches may continue to follow the procedure as laid
down in Part III of NRR, 2009 for exchanging mutilated and imperfect notes
and issue receipt for the notes presented for adjudication, non-chest
branches are required to follow the following procedure for notes
presented in small numbers and in bulk.
6.2.2 Notes presented in small number: Where the number of notes presented
by a person is up to 5 pieces, non-chest branches should normally
adjudicate the notes as per the procedure laid down in Part III of NRR,
2009 and pay the exchange value over the counter. If the non-chest
branches are not able to adjudicate the mutilated notes, the notes may be
received against a receipt and sent to the linked currency chest branch for
adjudication. The probable date of payment should be informed to the
tenderers on the receipt itself and the same should not exceed 30 days.
Bank account details should be obtained from the tenderers for crediting
the exchange value by electronic means.
6.2.3 Notes presented in bulk: Where the number of notes presented by a person
is more than 5 pieces not exceeding Rs.5000 in value, should be advised
162 | P a g e
 to send such notes to nearby currency chest branch by insured post giving
his / her bank account details (a/c no, branch name, IFSC, etc.) or get them
exchanged thereat in person. All other persons tendering mutilated notes
whose value exceeds Rs.5000 should be advised to approach nearby
currency chest branch. Currency chest branches receiving mutilated notes
through insured post should credit the exchange value to the account of
sender by electronic means within 30 days of receipt of notes.

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24 7
21
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5
30

163 | P a g e
MISCELLANEOUS ISSUES:

DRAFTS, SECURITY FORMS & STATIONARY MANAGEMENT

1. Security Forms

(i) Gift Cheques, (ii) Demand Drafts, (iii) Letters of Credit, (iv) Call Deposit Receipts, (v)
Krishi Cards / non-personalized blank Debit Cards (vi) Cheque Books (including
Personalised Cheque Book, received back as undelivered), (vii) Cash Orders, (viii)
Covering Letters of Bank Guarantee / Credit, (ix) Receipt Books of Safe Custody, (x)
LaghuUdhyami Cards, ‘PIN Mailers’ for Debit Cards / ISB Customers, any other item
which may be classified as Security Form, from time to time.

2. The distribution of stationery to various branches and other offices is done by

(a) The Printing and Stationery Department of Head Office
(b) Printing and Stationery Centres (P&SCs) and
(c) Stationery Distribution Centres (SDCs).

:34
3. The Printing & Stationery Department, HO, controlling office attending to following
functions:-
24 7
21
a. Issue of guidelines to P&SCs and SDCs
-20 52

b. Approval of policy, rates, suppliers and specifications.

c. Monitoring of the working of P&SCs and SDCs.
d. Supply of security forms branded with branch name to all the branches.
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e. Recovering the cost of stationery supplied to branches through the respective

Circle Offices, P&SCs and SDCs by lodging the cost of recovery statement to
them.
f. Production of printed material like half yearly closing forms, publicity
5

materials,
Ad-hoc publications, Book of Instructions, etc.

4. The Printing & Stationery Centres: Independent units undertaking printing of forms,
purchase of stationery items, paper etc. as per the forms/specifications. The P&SCs also
30

distribute the stationery items to various SDCs and the branches.

5. The Stationery Distribution Centres are only distribution centres and do not undertake
local printing. Their requirements of printed forms are met by P&SC or the Printing and
Stationery Department, H.O. as decided by the authorities. However, the SDCs
purchase table stationery for the branches.

6. The Printing and Stationery Department/Printing & Stationery Centres will also print
such additional books and forms, as the Circle Offices may require for use in their
respective offices, with prior permission of the Inspection and Audit Division, HO.
Requests in this regard should be made by the branches, through their Circle Heads.

7. All security forms (To quote : Draft books, Cash Order Books cheque books, safe
custody receipt books and S-21, 22 & 23 etc.) will, necessarily be requisitioned by the
branches from Printing and Stationery Department, H.O., NOIDA (U.P), once in a half
year by submitting only one copy of indent.
164 | P a g e
8. Other routine forms and registers as also stationery articles should be indented from
the Printing and Stationery Department/Printing & Stationery Centre/ Stationery
Distribution Centre, under which they function.

9. General stationery should be requisitioned by the branches, only once in 3 months

and the indent should be submitted in triplicate, to the relative stationery centre, well in
advance for their requirements. For this purpose, they should assess their requirements,
properly, keeping in view the past consumption, present stock and future requirement.

10. Regular indents be made on form no. PNB-76A, giving complete information required
in the form, i.e. form no., description (where required), 3 months consumption, stock in
hand and quantity required. Where less than 20 forms are required, form no. PNB-76
should be used.

For security forms, requisition on form no. PNB-1145 be made well in advance to allow

:34
at least 2 months to Printing and Stationery Department H.O for processing and Printing
of security forms. Piecemeal and unreasonable requisitions must be avoided. The
indents should be thoroughly checked by the official incharge of stationery and scanned
by the incumbent Incharge with this end in view,
24 7
21
-20 52

11. Non-standard items of stationery, circularised by Head Office, from time to time, may
be purchased by Incumbents Incharge locally, within the limits, stipulated in this behalf.
Non-standard forms (if approved by the Inspection and Audit Division) will be indented
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for, separately and a specimen of each such form must be attached.

12. While indenting stationery, the name of the branch, district, state, its distinctive
number and name of Circle Office, should be clearly mentioned. Branches located in
5

mechanized clearing centers (MICR Centres) must write their MICR sort Code in their
indents for security forms.

13. Forms relating to half-yearly/quarterly statements will be despatched by Printing and

Stationery Department, directly to Circle Offices for onward distribution to
30

branches/offices working under their control, before close of each quarter.

14. On receipt of consignments of security forms at branches, the custodians of security

forms, will ensure that all security forms received are thoroughly checked and in
accordance with the documentary advice sent along with the consignments of security
forms by Printing and Stationery Department, in respect of quantity, prefix and
numbering, branch name and distinctive number branded/printed on security forms.

15. After checking, the duplicate copy of the documentary advice should be returned to
Printing and Stationery Department, by the custodians of the security forms and affixing
rubber stamp of the branch, duly signed along with GBPA number in token of having
received the same. The acknowledgements of security forms must be received by
Printing and Stationery Department within 10 days of receipt of security forms by the
branch.

16. All Branches shall keep sufficient number of different Security Forms. No branch
should either lend its Security Forms to other branches or borrow the same from other

165 | P a g e
branches. The paying branch is free to return the DRAFT if it receives a draft for payment
that is issued on draft book borrowed from another branch. Since, in such cases, there is
always risk of pecuniary damages being awarded against the Bank if the aggrieved party
approaches some ‘legal forum’, the financial and other loss, if any, on this count, shall be
borne by the official(s) concerned at fault apart from the disciplinary action as may be
warranted under the rules and circumstances. To avoid such situations, it must be
ensured that adequate stock of draft books is maintained and requisition for supplies is
sent well in time to enable Printing and Stationery Department to send the same before
the existing stock at the branch gets exhausted. Responsibility for non-availability of draft
books at the branch would squarely rest on the official(s) concerned at the branch.

17. Branches shall lodge with Printing & Stationary Department, HO, their requisition for
blank security forms. Ptg. &Sty. Department shall enter in the Inventory Management
Module in CBS, the Security forms meant for dispatch to branches, by taking ‘From’ Sol
ID as their own Sol ID and ‘To’ Sol ID as the Sol ID of concerned branch. The system will
display the message ‘transaction partially verified’ and create the transaction ID. The
transaction ID and the date of transaction will be noted by the Ptg. &Sty. Deptt on the

:34
advice for branch before sending the advice to the concerned branch, along with security
forms, as per present procedure. 24 7
18. On receipt of the security forms, the branch would physically check these forms with
21
reference to the details in the advice received from Ptg. &Sty. Deptt. Menu option ‘IMC’
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will be used for authentication of details in the system with reference to the transaction ID
and date of transaction, as mentioned on the advice.
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19. After verification of transaction, the stock of security forms will be created in the
double lock in the ‘System’. Branches need not to make fresh entry for taking the stock
under Double Lock (DL).
5

20. In case of any discrepancy in security forms received from Printing & Stationery
Department, branch will re-transfer the security forms not received or found deficient, to
Ptg. &Sty. Deptt.by invoking menu option IMC using ‘From’ Sol ID as their own Sol ID
and ‘To’ Sol ID as the Sol ID of Ptg. &Sty.Deptt. Simultaneously, branch will also intimate
the discrepancy to the Ptg. &Sty. Deptt. The transaction will be verified by both the
30

custodians of the security forms. The system will display the message’ ‘transaction
partially verified’ and create the transaction ID. The transaction ID and the date of
transaction will be noted on both the copies of letter. Original will be sent to Ptg. &Sty.
Deptt., retaining the copy for branch record.

21. The security forms, found deficient and re-transferred in the system, will be sealed
and kept under double custody till these are returned to Ptg. &Sty. Deptt.

22. As per extant guidelines, the inter-branch transfer of security forms is prohibited.
Branches will not use the transfer menu option for transfer of security forms to other
offices/ branches.

23. The stock position of security forms can be viewed by the branch by invoking menu
option ISIA and giving location class and location code as ‘DL’.
24. A report, “Details of un-verified consignments (transactions pending verification for
a period of more than 7 days at branch)”, has been customized in the system. Circle
Offices will generate the report on weekly basis and take up with the concerned
166 | P a g e
branch(es) for ascertaining reasons for not taking the security forms received in their
stock.

25. As soon as a package of security forms is opened for use, the custodians will count
and check the forms in each book contained in the package. In case of any discrepancy
(ies) in consignments of security forms, matter should be taken up immediately with
thsecurity forms section of the Printing and Stationery Department by telephone, fax or
any other fast mode clearly specifying the documentary advice number, date, prefix,
serial numbers and nature of discrepancy. In no case, the security forms be returned to
Printing and Stationery Department, without its permission.

26. Printing of special cheques for corporate clients may be undertaken by Printing and
Stationery Department, only against specific requirements of branches duly approved by
the competent authority and in no case clients be allowed to print their own cheques.
Printing and Stationery Department will get the cheques printed for corporate clients as
per the approved format to facilitate the printing of cheques on computer printers etc.
Detail as under

:34
a. No change in format of cheques will be allowed except some adjustments in placing of
various texts/objects on the cheques to facilitate printing of cheques on computer
24 7
printers. 21
b. Cheques will be printed only in multicity formats and requests for deleting text -
-20 52

'Payable at all branches' or adding payable at a particular branch will not be acceded
to.
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c. In case any client wants cheques other than our format, the matter may be taken up
with I&AD for their permission.
d. Vouchers attached with cheques are allowed as per requirement of the party,
however, specimen must be provided for the same.
e. As per RBI instructions, no publicity material/slogan etc. shall be printed on the
5

cheques, however, logo of the party may be printed, which should be provided by them.

27. INVENTORY MANAGEMENT

On receipt of the stock of security forms from Printing & Stationery Deptt., the same shall
30

be counted by the authorised officer/custodian of the security forms and thereafter will be
entered in the CBS system. (From external location to double lock location). After
creating the inventory detail into the system, the officer shall then invoke menu (IMR) to
see Inventory Status Report and generate report of inventory captured above and lying
at location for each inventory class and inventory type separately. The authorised officer
shall take a printout of the same and check; preserve it in an era file. This report shall
serve the purpose of security form register for the inventory items maintained in finacle.

28. CUSTODY OF SECURITY FORMS

(i) All blank Security Forms, Debit Cards & related ‘PIN Mailers’, ‘PIN Mailers’ for Internet
Banking Service Customers must be kept in a fireproof cabinet / safe in the strong room,
under the joint custody of two officers, one of whom must be an Officer / Deputy Manager
/ Manager and the other one, being second man of the branch up to the level of large
branches. In the case of other branches, one of the joint custodians of the Security
Forms shall be minimum Scale III Officer and the second custodian may be Scale I or II
officer.

167 | P a g e
29. PHYSICAL VERIFICATION OF SECURITY FORMS
(i) Once a month, at irregular intervals, the Incumbent of the branch / Extension Counter,
through an office order, shall get the stock of all Security Forms, Debit Cards & related
‘PIN Mailers’, ‘PIN Mailers’ for Internet Banking Service Customers, checked from an
officer other than the custodians of the Security Forms, in the presence of one of the
custodians.

(ii)Circle Head shall get the stock of Security Forms, Debit Cards & related ‘PIN Mailers’,
‘PIN Mailers’ for Internet Banking Service Customers, physically verified on quarterly
basis, by deputing officers from his office / other offices or branches under his jurisdiction
to those branches which are having less than four officers.

(iii) Record of Demand Draft books, Cheque Books, Cash Orders are presently being
maintained in the computer system in the CBS branches while record of other Security
Forms and stock of Debit Cards, ‘PIN Mailers’, etc, are being maintained manually in the
register (PNB 126). Hence, while undertaking physical checking of Security Forms and
other items, the checking officer shall obtain a Report generated from the system in

:34
respect of those Security Forms which have not been taken out for use and verify the
same with the Security Forms lying in the branch. He, as well as the custodian in whose
presence verification is carried out, shall sign in full with date at the end of each page of
24 7
the Report. 21
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(iv) Similarly, the checking officer shall obtain a Report for those Security Forms which
have been issued / transferred to the sections for use during the day. He, as well as the
official concerned (who is having custody of the Security Forms for office use) shall sign
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in full with date at the end of each page of the Report. A copy each of the said Reports
shall be placed in an Era File along with the monthly reports which are being presently
placed by the officers who are undertaking physical verification of the security forms. It
shall be ensured that all the pages of the Reports, which are placed in the Era File, are
5

given a running serial number. The Era File shall be maintained on calendar year basis
and placed with the Security Forms in the fireproof safe. The officer deputed by the
parent office to an Extension Counter or by the Circle Office to a branch for undertaking
physical verification of the Security Forms shall also deliver a copy each of the said
reports duly signed by him as well as the custodian / official concerned to the parent
30

office / Circle Office, as the case may be.

(v) With regard to those Security Forms which have not been entered in the system and
are recorded manually in the register (PNB 126) and routed through “in and out” register
(PNB 862) for daily use, the officer deputed by the parent office / Circle Office shall verify
the same from the stock lying in the branch, either in the fireproof safe or with the officials
concerned, and sign at the end of the relevant pages of the registers (PNB 126 and 862)
along with the custodian / officials concerned. He shall also give brief details of such
Security Forms in his report which is to be submitted to the Incumbent Incharge / Circle
Office

(vi) The Concurrent Auditor, including CA Firms engaged for concurrent audit of
our branches, will conduct physical verification of security forms once in a
quarter at irregular intervals, under confirmation to concerned Zonal Audit Office.

30. The loss of security forms must be reported by fastest communication means, to
FPIS: Head Office, with complete particulars (such as (i) nature of security form, (ii)
168 | P a g e
series and specific number, (iii) prefix alphabets, (iv) whether the forms were branded
with station stamp or were blank), as soon as such loss come to light, in order that the
bank’s branches may be cautioned, to be on their guard. In the communication to these
departments, circumstances under which the loss occurred and the names of official(s)
responsible, if any, should also be intimated.
31. All other stationery of non-security forms must also be kept properly arranged in
racks under lock and key, in the charge of a clerk, who will keep the record of the item
issued to the members of staff, in a separate register, in which the employees concerned
will initial for the items issued to them.
32.. Name of the branch, district, state and the distinctive number, must be clearly
impressed upon all stationery forms, before these are issued for use.
33. Cost of stationery supplied to branches/offices by Printing and Stationery
Department/Printing & Stationery Centres/ Stationery Distribution Centres will be
reimbursed by the respective Circle Offices directly (under whose jurisdiction the
branch/office falls) to the debit of their expenditure head ‘stationery used a/c’ at their
office after receipt of consolidated statement of cost recovery from their respective
Printing & Stationery Centre.

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34. Cost of stationery supplied to administrative offices, will be debited direct to their
“stationery Used account” maintained at the respective stationery centres, under
intimation to them. In the event of any discrepancy, the matter should be taken up with
24 7
the stationery centre concerned. The official incharge at the administrative office should
21
see that proper control over use of stationery is exercised.
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STOCK OF STAMPS AND STAMPED FORMS

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35. A record of all stamped forms will be kept in the stamp balance book (form no.
PNB-111) and will be kept in the custody of a checking official, during the day. Overnight,
the box cont
36. The System Administrator shall ensure that outstanding inventory (stock of all
5

security forms i.e. demand draft books, pay order books, cheque books etc. outstanding
both in security forms register as well as PNB 862 and cheque book issue register etc.) is
maintained into the system i.e. finacle. Every movement of inventory from one location to
another location requires authorization in finacle. This authorization is set up at location
class level i.e. major classification of inventory location. Therefore, before moving the
30

outstanding stock of security forms into the system, the branch shall specify the officer(s)
who can authorize movement from one location class to another location class. The
Inventory Movement authorization/ Maintenance is available at branch DBA level. The
DBA will designate two officers (User) who will be authorized to move the inventory to
employee locations, destroyed location etc.
38. Other security forms like FTC, bank guarantee forwarding letter, krishi cards etc are
not handled in finacle and shall not be moved into the system and continue to be handled
manually.
39. The Authorised officer shall verify the above inventory transaction. The system
displays the particulars of each inventory item captured. The officer shall verify the
inventory stock physically with the details of inventory captured into the system.
40. After creating the inventory detail into the system, the officer shall see Inventory
Status Report and generate report of inventory captured above and lying at location for
each inventory class and inventory type separately. The authorised officer shall take a
printout of the same and check; preserve it in an era file. This report shall serve the
purpose of security form register for the inventory items maintained in finacle.

169 | P a g e
41. One of the above authorized officer(s) shall then move inventory outstanding in
security forms daily in & out register i.e. PNB 862 and capture above location to the
concerned section In-charge, who overnight keeps the security forms outstanding in
PNB 862 in his/her custody. This movement would require passwords of both the
authorizers and section In-charge receiving / having the security forms in his custody for
verification of movement. Likewise in cheque book issue also above instructions be
followed.
42. However, the branch shall not discontinue the chequebook issued register, as it
would continue to obtain signature of the customer on the register in token of having
received the cheque book.
43.Branch shall follow the above procedure for recording movement of security forms
into the branch (Double Lock), each time it receives stock of security forms from the
stationery department.
44. Every morning, the DBA shall see from the daily arrangement register that respective
section In-charges who were having overnight inventory at their employee locations are
present or not. If an In-charge is absent, as per arrangement register DBA shall disable
his user_id and enable user_id of officiating official and then ask him to move the

:34
inventory of User, who is absent,
45. Every morning, the section In-charge shall move inventory from his location to the
location of his counter Clerk/CTO/SWO and hand over the stock, physically to him. Any
24 7
officer who has been authorized to move the inventory from one location to another is
21
known as Authorised user.
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46. The CTO/Counter clerk/SWO shall receive the physical stock of security forms from
the section In-charge and invoke option in finacle to “Verify” and physically tally the
security forms in hand with the particulars i.e. inventory number displayed by the system.
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After ensuring that physical stock of security forms (being printed) in hand tallies with the
particulars displayed in system, he shall ask the section In-charge to put his password
against section in charge’s user_id and put his password against his own user_id to
authorize above movement of inventory. Unless inventory movement is verified, it shall
5

not be available at the counter clerk’s location for use during the day.
47. The CTO/ Clerk/ SWO shall make use of the inventory for printing of FD receipts,
demand drafts, pay order etc. On invoking appropriate print option, the system displays
the next inventory number available at his location.
48. The CTO/Clerk/SWO shall return inventory that is lying at his location but which has
30

been destroyed (i.e. torn/mutilated) from his location to the “Destroyed Inventory” (DI)
location by invoking appropriate options. This movement will need authorization by the
officer, designated for authorizing movement from/to destroyed location.
49. At end of the day, the Counter clerk/SWO shall hand over the unutilized stock of
security forms (inventory) to his section In-charge. He shall invoke menu option to move
inventory from his location to the location of the section In-charge. This movement is akin
to the backward movement of inventory from the clerk to officer in PNB-862.
50. The section In-charge shall verify and compare the stock of security forms handed
over to him by the counter clerk/ SWO with the particulars displayed by the system. On
his satisfying himself, he shall ask the counter clerk to put his password to complete the
inventory transaction. He shall put his initials on the the last inventory item used during
the day in token of having certified the use of last inventory for the day.
51. At end of the day, the section In-charge shall enquire, unauthorized inventory
transaction, if any, is outstanding in the branch. If no records are displayed, it means all
inventory transactions are authorized. If any transaction is outstanding as unauthorized,
he shall ensure that the authorized persons authorize it.

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52. The section in-charge shall generate a report on the inventory movement that has
taken place during the day between his and his counter clerk’s employee location and
take a printout of the same. This report shall serve the purpose of maintaining PNB 862.
The section In-charge shall put his signature on the report and preserve the report in an
era file.

STANDARDIZATION & ENHANCEMENT OF SECURITY FEATURES IN CHEQUE

FORMS – CTS – 2010

In order to ensure uniformity across banks in the country to assist the presenting banker
while scrutinizing / recognizing cheques of drawee banks and to act as deterrent against
fraudulent cheques, the RBI has specified certain minimum-security features and
standardization of field placements on cheques There are eleven (11) mandatory
security features in cheque forms known as CTS-India.
In addition to mandatory features, RBI has also suggested certain desirable features,
which could be implemented by banks based on their need and risk perception. Our bank
has introduced five (5) such desirable features (List of these features is given in IAD Cir.

:34
No.15/2012 Dated27.1.12).
Incumbents / staff members to check the above security features while passing the
cheque to safeguard the bank’s interest.
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LIBRARY
21
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1. Purchases of books will be made by branches, according to the sanction given in this
behalf by the appropriate authority
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2.The cost of library books at branches will be debited to “Exp:

Library/Newspapers/Periodicals”.
3. These books will be serially numbered and entered in the prescribed library register, a
separate page being used for each book.
5

4. The incumbent incharge will initial the entries in the library register, while passing the
relative vouchers, at the time of making payment, for the library book
5. At close of each half-year, the incumbent incharge should check the books in
possession of the branch, with the library register and ensure that shortages, if any, are
properly accounted for. A certificate to this effect should be appended, on the last page
30

of the library register.

(Reference: IAD Cir. No. 27/2016)

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Policy for Lockers BA & RM DIVISION – SAVING DEPOSIT, DEBIT CARD, NRI
BUSINESS & OTHER LIABILITIES BUSINESS CIRCULAR N0 08/2024

1. The Bank's Safe Deposit (Locker) Service be made available to Customers who
maintain a Saving/Current Account and also to those who are not having any other
banking relationship with the bank after complying with the Customer Due Diligence
(CDD) criteria. Those who do not maintain an account will tender a request letter with
copy of applicable KYC papers.

2. Branches should maintain a waiting list for the purpose of allotment of lockers. All such
applications received for allotment of a locker should be acknowledged and given a
waiting list number.

If there is any event such as merger / closure / shifting of branch warranting physical
relocation of the lockers, the bank shall give public notice in two newspapers (including
one local daily in vernacular language)

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3. Bank has the responsibility to ensure that incidents like fire, theft/ burglary/ robbery,
dacoit, building collapse do not occur in the bank’s premises due to its own
shortcomings, negligence and by any act of omission/commission. The bank liability
24 7
21
shall be for an amount equivalent to one hundred times the prevailing annual rent of the
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safe deposit locker.

4. Whenever a locker is rented, prescribed fixed deposit for the amount which would
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cover 3 years rent and charges for break open the locker, under the scheme
VAY/MBTD/Sugam be taken and kept under Bank’s lien.
5

5. In the case of highly placed Government officials and respectable clients, the
Incumbents of Branches may relax the aforesaid conditions. However, in all cases where
fixed deposit is not kept, the lessee will undertake, in writing, to maintain at all times a
minimum stipulated balance in respect of Small, Medium, Large and Extra Large lockers
respectively, in his/her Savings/Current account.
30

6. At the time of letting out a locker, signatures on the following forms must be obtained
from the lessee(s):-
i) Rent Deed Memorandum (Form No.PNB-80 R) (Stamped as an agreement under
Stamp Act).
ii) Specimen Signature Card (Form No. PNB-95)
iii) A copy of the executed Rent Deed Memorandum (PNB-80) will be provided to the
locker hirer at the time of allotment of the locker. (In case existing hired lockers, the same
can be provided on demand)
iv) On letting out new locker, letter as per Annexure –A (IAD CIR. NO.28/14
DT.16.4.14) will sent to locker hirer through Regd. AD.

7. All the pages of Form No. PNB-80 are to be signed by the lessee(s) and his/her/their
proper introduction obtained. "Pass Word" on Specimen Signature Card (Form No.
PNB-95) must invariably be obtained at the specified place. The lessee is at liberty to
select any convenient "password". Specimen of signatures on Form Nos.PNB-80 and
95 will be attested by the Incumbent Incharge/Custodian.

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8. The locker facility may be extended to blind as well as illiterate persons. The
procedure to be followed for leasing out lockers to blind and illiterate persons is given
hereunder-

A. Illiterate persons
His/her left/right hand thumb impression be taken on Form No. PNB-80 in the presence
of an authorised officer and witnessed by two respectable persons known to the bank.
Three copies of passport size photographs, of such lessee bearing his/her left/right hand
thumb impression will be taken and pasted on Form No. PNB-80.The photographs will
be attested by the Incumbent Incharge/Custodian who will exercise care that part of the
signatures appears on the photographs and part on the Lease Deed (PNB-80).
These provisions will apply mutatis-mutandis in case an illiterate person is appointed as
an 'Authorised Person' for operating the locker by the lessee".

MODIFICATION IN GUIDELINES OF SAFE DEPOSIT VAULTS (LOCKERS) -

REVISED LOCKER AGREEMENT & SUPPLEMENTARY LOCKER AGREEMENT
Revised Safe Deposit Locker Agreement is to be got executed from the Locker Holders

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who have not executed New Locker Agreement (PNB 80R) as per guidelines vide RLBD
Circular no. 09/2022 dated 01.04.2022. The Covering Letter to be obtained along-with
revised Locker Agreement from existing Locker holders. The stamp cost for Revised
24 7
Safe Deposit Locker Agreement/Power of Attorney shall be borne by Locker holder(s).
21
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Supplementary Safe Deposit Locker Agreement is to be got executed from Locker

holder(s) who have executed New Locker Agreement (PNB 80R). Stamp Cost in such
cases shall be borne by the Bank.
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(RETAIL LIABILITY BUSINESS DIVISION CIRCULAR No.09/2023 dated 09.03.2023)

B. Blind persons
5

(i) Locker facility may be allowed jointly with a person without any visual impairment
known / related to him / her (the visually impaired person intending to take locker on
lease) and operation of such locker shall be permitted jointly. All the documents relating
to leasing of locker shall be executed jointly.
(ii) Locker facility may be allowed singly in the individual name of the visually impaired
30

person. However, operation of such locker shall be permitted in the presence of one
literate witness with no visual impairment who shall be designated by the lessee at the
time of execution of Rent Deed Memorandum. The lessee (the visually impaired person)
may designate maximum three witnesses at the time of executing the Rent Deed
Memorandum. The signature of the witness shall also be obtained along with the
signature / thumb impression of the visually impaired lessee at the time of operation of
locker.
(b) The visually impaired customer (lessee of locker) may change the witness (es)
subsequently. Until and unless the situation warrants, frequent changes in the witness
(es) should be discouraged.
(c) It should be ensured that the designated witness (es) is / are customer(s) of the
branch and whose identification and address verification has been conducted by
applying full KYC procedures.
(d) Such lessee of locker can also appoint a person who is literate with no visual
impairment as an authorized person for operating the locker, as per the extant
guidelines. The lessee must call at the branch for appointing the authorized
person.
173 | P a g e
(e) The words “VISUALLY IMPAIRED” should be written on top of each form, i.e. PNB-
80 with RED INK.

9. Entries in Form No. PNB-80 will be checked and authenticated by the custodian.

10. While letting out a locker to a limited company, club, society or association, a copy of
resolution with suitable adaptation in case of club, society etc.) duly signed by the
Secretary and the Chairman must be obtained, complete in all respects. Similarly when a
locker is rented out to a trust, an attested copy of the trust deed should be obtained, and
it should be ascertained that the powers to operate upon the locker are given to an
authorised trustee, in the resolution, in terms of the trust deed and that the resolution is
signed by the persons authorised to do so.

11. Where an individual lessee desires to convert his/her account into a joint account,
the old locker standing in his/her name must be first surrendered by him/her and a fresh
one issued or the same be re-allotted in the joint names, on completion of all the required
formalities. Specific instructions regarding mode of operation and access to lockers must

:34
invariably be obtained, from the joint lessees, on Rent Deed Memorandum (Form No.
PNB-80). In such cases, the rent for the surrendered locker, for the unexpired period, will
be adjusted in the rent of the new locker, on quarterly basis.
24 7
21
12. When a locker is let out to more than one lessee, it will be implied that each one of the
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joint lessees has the right of separate access to it and further each of such joint lessees
shall have the right and authority to surrender that locker and terminate the lease, unless
otherwise specifically provided
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13. Where a locker is let out in the style Former or Survivor(s)", during the life time of the
former, the other joint lessee(s) shall have no interest in the contents of the locker nor
can he/they stop operation on the locker or issue any instructions to the bank. The
5

liability for the payment of rent of the locker will, however, be that of all the lessees.

14. The lessee(s) should not be permitted to assign or sublet the locker, nor should
he/she/they be allowed to deposit any article of an explosive and or destructive nature.
15. AUTHORISED PERSON (NOMINEE FOR OPERATION)
30

i) Lessee of a Safe Deposit Vault (locker) can appoint a person for operating the locker,
on the terms and conditions in Rent Deed Memorandum (PNB-80) and the authority in
favour of the said person ceases with the death of the lessee.

The nomenclature of the said person so authorised to operate the locker is Authorised
Person'. Where an authorised person is required to be appointed by a lessee, necessary
authority will be obtained, in Rent Deed Memorandum (Form No.PNB-80) at the
appropriate place and the lessee's signature to the authorization, will be got witnessed.
The specimen signatures of the authorised person(s) should be obtained on Form Nos.
PNB-80 and must be witnessed by an independent person and attested by the custodian
of the vault.

(ii) Authorization in favour of minors and blind persons, and by trustees, in favour
of third parties, must in no case be accepted.

16. ACCESS TO THE VAULT

174 | P a g e
When a lessee or his/her 'Authorised Person' visits for operating his/her locker, the
attendant official will satisfy himself, by reference to the relative record, that the locker
number given by the visitor is correct.
Thereafter, the signatures of the visiting Lessee/Authorised Person will be obtained in
the Visit Register (No.PNB-82).

The custodian before opening the locker must compare the visitor's signature with
his/her specimen signature and ensure its genuineness. After keeping a note of the
relative "Pass Word", he will lead the visitor to his/her locker and before applying his/her
key to the locker, the visitor must be enquired of and his/her "Pass Word", in seclusion. In
case the visitor fails to give the correct "Pass Word", extra precaution should be
exercised and access to the locker must not be permitted, till such time, the visitor is
identified to the custodian's satisfaction.

(ii) Where, the correct "Pass Word" is given by the visitor, the custodian will apply the
master key to the locker and the visitor will be requested to apply his/her own key to open

:34
the locker. It must be carefully noted that the lessee's key should on no account be
handled by the custodian or any other member of the staff nor any assistance be given to
the visitor, in handling the contents of the locker.
24 7
21
The mechanism of the locker provides for its automatic double locking, when it is locked
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by the visitor. It cannot be re-opened unless both the custodian's and locker holder's
keys are applied to it.
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17. INSPECTION OF CABINS

While accompanying the lessee for operation of a locker, the custodian must carefully
examine: -
(i) Inspection of cabin, where provided, to ensure that no articles were left behind by
5

previous visitor(s).
(ii) The space near about the last operated locker, where no such cabin has been
provided, with the same object.
(iii) The last operated locker, to ensure that the previous visitor has properly locked it. If
only one locker is operated in a day, it will be examined in the evening before closing the
30

strong room/vault.

18. At the close of each day, the custodian will append the following certificate on the
Visit Register (Form No. PNB-82) by means of a rubber stamp reading: -

"Certified that I have examined all the operated lockers during the day and have found
them properly locked.Also verified the premises to ensure that nothing was left inside the
strong room.

“CUSTODIAN"

19. NON-PAYMENT OF RENT

i. The lessee shall be required to give standing instructions to debit his /her saving fund /
Current account, with the Bank (wherein periodical interest of the FDR under Spectrum
Deposit is credited) for recovering there from annual rent /of his her locker on due date.
Branches should not affect recovery of rent either through TM or standing instruction (SI)
175 | P a g e
instead should collect locker rent through menu option LKRCM/ LKRRBAT, which result
into updation of the relevant table. Running of batch job (LKRRBAT) has since been
made mandatory w.e.f. 22.06.2013, before initiating day-end process to recover rent due
for payment.
ii. To recover rent from the customer that does not have any operative account user to
assign the operative account as <sol id> 3171155 and will deposit the amount in this
account. System will recover the rent from this account on executing the menu. On
invoking the menu option, the due rent shall be displayed automatically by the system
and the user has the option to recover the rent by Transfer or Cash mode.
To recover advance Rent from the locker holder where the due date is still a future date
Menu option LKRCM is to be invoked.
iii LKRCM can also be used to recover any other charges in the locker accounts.
iv. The amount of rent so recovered, will be credited to income head “Rent on Lockers”.
v. Receipt of recovering locker rent will be issued to all the lessees.
vi. In case of non payment of annul rent on due date, telephonic reminder & personal visit
to the lessee be made.In case of non availability, Introducer may also be contacted.
In case, all the above efforts fail, a preliminary notice on form No. PNB 86 for depositing

:34
locker rent within 15 days be sent.
vii. Operation on the locker must not be permitted till the recovery of locker rent from the
lessee. Similarly, caution should be noted in the relative saving fund / Current account of
24 7
21
the lessee, from where locker rent is to be recovered, that no withdrawal / debit should be
-20 52

allowed there from till the realization of arrears of locker rent.

In case, the rent is not paid or credit balance in the saving fund Current account is not
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brought to the level so as to recover arrears of locker rent with in the period stipulated in
Form No. PNB 86, a second reminder on Form No. PNB 87 will be issued

If all the above efforts fail, a final notice on Form No. PNB 89 will be issued to the lessee
5

under registered acknowledgement due cover /. By courier, on the last known address
available on record.

In case, the receipt of final notice is acknowledged by the lessee but neither the rent is
paid by him / her nor any communication is received from him / her with in a period of one
30

month

The matter will be referred to the Circle Head by the branches other than large, very
large and exceptionally large branches with the under noted information for obtaining
permission to break open the locker:

a) Name and address of the lessee

b) Date of leasing of the locker
c) Amount of rent due and since when
d) If the locker was earlier leased without obtaining FDR
e) Details of follow up.Other accounts of lessee with us.
f) Any other relevant information

As regards the large branches, the power to break open the lockers shall be exercise by
a committee of Senior Manager and Second Man. In case of small and medium
branches, permission be obtained from the Circle Head.
i) Locker must be broken open in the presence of the Incumbent Inchargeand two
independent witnesses; one of the witnesses should be an advocate and the other an
176 | P a g e
independent person known to the Bank or a customer of the Bank, but not a staff or
ex-staff member.

ii) In case of ELB/ VLB branches, Incumbent Incharge may through an office order
designate an officer in Scale III (GBPA Holder) to form part of the team as per above.
Accordingly, in a ELB/ VLB branch, the team for break open of locker may constitute
GBPA Holder in Scale III (designated through office order) and two independent
witnesses, one of the witnesses should be an advocate and the other an independent
person known to the Bank, but not a staff or ex-staff member.

iii) It is further advised that witness of only those persons be taken who can be produced
as a witness in case there is any dispute. Further, it is not necessary that advocate
should be from Bank’s approved panel, but if witness is given by the panel advocate
then in future or at a later stage, it might be easier to produce him as witness.

A nominal fee of Rs 200/- per locker for witnessing breaking open of locker may be paid
to the advocate.

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Rs 25/- is to be charged in case of break open of locker in addition to other charges i.e
cost of lock, mechanic charges etc.24 7
An inventory of all the contents (including cash) and other certificates, such as FDRs,
21
RDs, NSCs etc) of the locker will be prepared and bullion, sovereign, ornaments and
-20 52

Jewellery etc. if found in the locker, will be got weighed separately, From an independent
shroff having valid license to deal in bullion, sovereign, ornaments, Jewellery etc.). In the
presence of witnesses and the weight of each article will be recorded in the inventory
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under the signatures of the Incumbent Incharge and the witnesses as well the shroff by
indicating their full particulars i.e. name, address, account number (if dealing with our
Bank). The shroff shall also affix his rubber stamp indicating the license number.
5

In the event of finding cash and FDRs / RDs (if in the same right and capacity) pertaining
to our Bank, the Incumbent Incharge of the branches shall take a decision to appropriate
amount / proceeds thereof, if permitted by law, to the extent necessary for realization of
the Bank’s dues (including breaking open charges) and the remaining cash, if, any and
other certificates / receipts shall be sealed properly and kept in the safe custody, as per
30

bank guidelines, and remarks to this effect be given in the inventory also .

In case there is nothing found in the locker and the rent is to be waived the powers for the
same lies as per SPBPR Circular No 5/ 2014 according to which SMG-IV and above
have full powers to allow remission of arrears of rent on lockers and others shall seek
permission for waivement from Circle Office.

20. SURRENDERING OF THE LOCKER:

i) After the locker has been surrendered, lock of such locker will be interchanged,
immediately with that fixed to another vacant locker or replaced by a lock from the
reserve supply. Where the manufacturers/suppliers' mechanic is available and his
charges are reasonable, inter-change/replacement of lock, may be got done from him,
otherwise this work will be done by an authorised official, in all cases, under the personal
supervision of the Incumbent Incharge/Custodian.

177 | P a g e
ii) On surrender of a locker, the surrender certificate provided in the Rent Deed
Memorandum (Form No. PNB-80) must be obtained from the lessee(s). Necessary
cancellation should also be made under authentication of the custodian.
iii) In case, the lessee has already vacated his locker and sends the key by mail at a later
date, the Surrender Form (Form No. PNB-91) in duplicate, should be sent to the lessee,
preferably with a self-addressed cover, and obtained back, duly signed by him, on both
the copies. Surrender forms, when received back from the lessee, should be pasted with
Form Nos. PNB-80 in the relative accounts.
iv) After a locker has been surrendered, relative forms will be filed locker-wise in a
separate binder for closed accounts. Correspondence and other papers pertaining to
surrendered lockers will be filed, in an alphabetical order, in an era file.
Immediately after surrender/last operation, locker must be carefully examined by the
custodian to ensure that the lessee leaves behind no articles in or outside the locker. In
case where locker is surrendered by sending the key through mail, the locker will be
inspected by the custodian, in the presence of the Incumbent Incharge and a certificate
to this effect must be given on the letter sent by the lessee with the key and signed by
both the Incumbent Incharge and the Custodian.

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21. ARTICLES FOUND IN THE LOCKER
24 7
21
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Valuables found in the vault will be immediately reported to the custodian and entered in
the Register of Articles Found in the Vault (PNB-85) by the finder himself, who will also
sign in the Register, at the space provided for this purpose. The custodian thereafter,
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must handover those valuables to the Incumbent Incharge and the Head Cashier,
against their receipt, in the aforesaid Register, for keeping them as articles in safe
custody. Thereafter, appropriate efforts, to find out the owner of such articles, must be
made and the articles returned to the owner of such articles on proper identification and
5

against his signatures in the Register (Form No. PNB-85) in the presence of the
Incumbent Incharge. The usual safe custody charges may be recovered before delivery
of the articles.

22. DEATH OF LESSEE

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Death report of a lessee will be noted boldly in red ink in Rent Deed Memorandum, in the
CBS system. Such noting will be authenticated by the custodian. In case death report is
received by means of a letter, the date of death and the date of letter will also be noted in
the relative Rent Deed Agreement and system. Where the construction of the locker
permits sealing, the locker concerned (in the case of death of the lessee) will be
immediately sealed in order to prevent operations till such time as the lawful heir or
representative of the deceased is authorized to open and operate the same. Where the
locker cannot be sealed, a blank red slip should be pasted thereon as a measure of
precaution. Such a case will be treated as a claim case and dealt with as under:
i) Where a locker is rented out to more than one lessee jointly, with specific provision, in
Rent Deed Memorandum, that the operation will be allowed to the surviving lessee(s), in
case of death of any one of the joint lessees, the operation by the surviving lessee(s) will
be allowed accordingly, without treating it as a claim case.
ii) It must be noted with care that the authority in favour of an Agent/an Authorised
Person, ceases with the death of the principal. The 'Authorised Person' appointed by

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him/her, during his/her lifetime, must not be allowed to operate the locker, after the death
of the lessee.

iii) Where the legal representatives of a deceased lessee, have obtained authority for the
operation and possession of the contents of his/her locker, the seal on the locker will be
removed by the Incumbent Incharge and on completion of all the required formalities,
operations will be allowed to them, against their signatures on the Surrender Certificate,
in the Rent Deed Memorandum and the Specimen Signatures Card.

23. NOMINATION FACILITY

The facility of appointment of a nominee for receiving the contents after the death of
lessee is also available.
(i) The nomination to be made by an individual who is a sole hirer of a locker from a
banking company shall be in Form (PNB-821-A).
(ii) Where the locker is hired from Banking Company by two or more individuals jointly,
the nomination to be made by such hirers shall be in Form (PNB-821-B).

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(iii) In the case of a sole hirer of a locker, nomination shall be made in favour of only one
individual.
(iv) Where the locker is hired in the name of a minor, the nomination shall be made by a
24 7
person lawfully entitled to act on behalf of the minor.
21
(v) The cancellation of the said nomination to be made by the sole hirer or joint hirers of
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a locker, as the case may be, shall be in Form (PNB-821-C).

(vi) A variation of the said nomination to be made by the sole hirer of a locker shall be in
Form (PNB-821-D).
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(i) A variation of the said nomination to be made by the joint hirers of a locker shall be
in Form (PNB-821E).

24. SAFEY GUIDELINES FOR LOCKERS

5

Keeping in view the above incident, following safety measures in respect of lockers,
based on RBI instructions, be complied with by the field functionaries :-

1. Branches which are located in isolated areas or situated in/adjacent to vacant

30

buildings may be shifted to safer locations after approval of Zonal Manager.

2. Branches which cannot be shifted should take extra security measures such as :
a) E-surveillance for these branches on priority.
b) Hiring of night chowkidar/care taker
c) Strengthening of strong room and cash safe, if it is not as per the RBI/bank guidelines.
d) Go in for safe cum locker cabinets.
3. The responsibility for checking the functioning of security equipment on daily basis be
fixed in branches, through Office Order.
4. Security clearance i.e. installation of all Security and fire equipment before opening of
the branch to be ensured.
5. Inside the strong room/Safe Deposit Vault (Lockers) at least one camera and PIR
sensor facing the entry/exit and covering any other opening in the strong room like
ventilator/exhaust fan etc. be installed. This camera & PIR sensors should be active
during non office hours with the help of DVR software or by standalone timer.
6. Customers be advised to use their own padlocks also for additional safety of the
locker.

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All other guidelines for safety & security of lockers as advised by bank from to time be
also adhered to.

LOCKER RENT (in Rs.)

Size of lockers Metro/Urban Area Rural/Semi Urban
Small 2000 1250
Medium 3500 2500
Large 5500 3000
Very Large 8000 6000
Extra Large 10000 10000

* A premium of 25% in identified metro branches subject to review of identified branches.

REDUCED RENT OF LOCKERS SITUATED IN LAST FOUR ROW OF EACH

LOCKER CABINET (RLBD 15/2023 dated 27.03.23)
Size of lockers Metro/Urban Area Rural/Semi Urban
Small 1500 (Against2000) 950 (Against 1250)

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Medium 2625 (Against 3500)
24 7 1875 (Against 2500)

21
Restriction on Number of Operations No. of locker visits per year-12 visits per year free;
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thereafter ₹100/- per visit.

Penalties for Locker rent in Default

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1st Qtr.- 10% of annual rent

2ndQtr.- 25% of annual rent
3rdQtr.- 40% of annual rent
5

1 Year- 50% of annual rent

For more than 1 year Locker to be broken

ARTICLES IN SAFE CUSTODY

30

1. Safe custody of articles is a service provided by the bank to desiring customers and it
is a source of non-interest income to the bank. Application for deposit of articles in safe
custody, will be received, on form no. PNB-156 duly filled and signed by the customer(s),
in the presence of an authorized official.

2. In view of the risks involved, the deposit of articles by more than one person jointly,
with instructions to deliver them to either or survivor of them, should not, ordinarily
be accepted.

3. Instructions from depositors to the effect that their articles in safe custody may be
delivered to their nominees, in case of their demise, should be accepted on the
prescribed format SC-1 (PNB-820A) and such nominations may be cancelled/varied
subsequently on receipt of declaration, on the prescribed format, i.e., SC-2 or SC-3
(PNB-820B or PNB-820C) from the depositor(s) as permitted/prescribed under the
Banking Regulation Act, 1949 amended in 1985. Record of such
nomination/cancellation/variation must be kept in the prescribed register (PNB-826).

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4. All articles accepted in safe custody should be in the nature of sealed packets, stout
cloth envelopes and boxes.

5. Particulars of articles taken into safe custody must be recorded in the safe custody
register, (form No. PNB-158) in which a separate page for each account need not be
allotted and accounts may be opened one after the other in serial order with a red line
drawn after each opening.
6. Safe custody receipts will be issued to the depositors on the bank's standard form and
will be given the same numbers as given to the relative accounts in the register. The
officials signing safe custody receipts, which are issued in more than one name, must
authenticate such additions as 'or survivor' or 'either or survivor' both in the receipts and
in the safe custody register.
7. Articles in safe custody will be kept in the strong room in the joint custody of the
Incumbent In-charge / Manager / Deputy Manager and the Head Cashier, the number of
the safe or the rack in which an article is placed being given in the remarks column of the
register.

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All entries in the safe custody register will be authenticated by the custodians.

8. The bank must not admit any cognizance of the contents of sealed packets or locked
boxes left with it for safe custody and on no account may the articles be sealed with the
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21
bank's seal or locked with a bank padlock
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9. As a general rule, articles in safe custody must not be surrendered without production
of the relative receipt duly discharged. If a customer loses a safe custody receipt, he
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must sign a stamped indemnity (form No. PNB-157) before he is given a duplicate
receipt or delivery of the article.
10. SAFE CUSTODY CHARGES
The charges for the safe custody of articles are circularized by Head Office from time to
5

time. Charges for the first year should be realised in advance and efforts being made to
realize the charges in subsequent years likewise, a suitable note being made in the safe
custody register. The arrears, if any, should be recovered before the articles are finally
delivered
30

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Duties of Customer Service Associate (CSA) (w.e.f. 1st April, 2024)
Reference (HRMD CIRCULAR NO. 755/2024 (REVISION of SERVICE
CONDITIONS OF WORKMEN UNDER 12TH BI-PARTITE SETTLEMENT)
Attending to customers across the counters for all routine clerical work other than
supervisory work except specifically provided herein .
• Receipt of cheques, Drafts, Dividend Warrants, Pay Orders / Bankers Cheques and
other similar instruments other than Bills and giving acknowledgements for the same in
the counterfoil.
• Receiving and acknowledging inward thapals / letters / courier / speed post etc. •
Ensuring proper contents in the covers and envelopes including thapals, Registered
Post / Courier / Speed Post etc., before despatch of the same.
• Data entry in system of details of Account opening forms including Aadhar based
documents after the documents are approved and verified by a supervisory staff. •
Updating and uploading in the system, KYC documents which are verified and approved

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by a supervisory staff.
• Following up and guiding the customers for completing the KYC, e-KYC / ReKYC /
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c-KYC 21
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• Generation ofCIBIL Reports.

• Generation of Statements of accounts in hard copy / soft copy and sending by post /
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mail / hand delivery as the case may be, at the request of the customers / a supervisory
staff.
• Printing of Passbook including printing of Barcode / Branch, Customer details page,
5

Transactions at the request of the customers / a supervisory staff, whenever required.

Preparation and/or generation of Certificate of Balance from the system at the request of
the customer for authentication/approval by a supervisory staff
• Registering Standing instructions of customers in the system for authentication by a
30

supervisory staff.
• Registering Stop Payment Instructions of the customers in the system for
authentication by a supervisory staff.
• Registering/entering (PPS) Positive Pay System letters in the system as are received
from the account holders for further approval by a supervisory staff.
• Delivery of cheque books to customers after entering the details in the prescribed
register and obtaining the acknowledgement from the customer, subject to approval by a
supervisory staff.
• Delivery of Debit Card to customers after entering the details in the prescribed register
and obtaining the acknowledgement from the customer, subject to approval by a
supervisory staff. B Recounting of cash in cash department/currency chest.
• Scanning and capturing of specimen signatures of account holders for authentication
by a supervisory staff.

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• Assisting an officer in Loan Recovery Department by writing letters to borrowers on
overdue instalments, overdue notices, default advices, contacting borrowers for
reminder, etc. either by sending mail or by contacting through phone.
• Generating or preparing intimation letters to the customers about due date of maturity
of Deposits and seeking renewal of Deposits.
• Entry of Locker.:operations either in the manual register or in the system and assisting
a supervisory staff for operation of Locker by the customers. (other than key holding) •
Generating or preparing intimation letters to customers for payment of Locker Renewal
Fee.
Follow-up with customer for recovery of locker fee overdues, by mail or on phone and
sending letter in the prescribed format, in this regard. Feeding/uploading details of credit
proposals, loan applications/ documents after authentication by a supervisory staff.
• Working in "May 1 Help You" counters.

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• Working in Audit Departments to assist Internal Auditors in preparation of audit reports,
related correspondence, etc.
• in dedicated and exclusive cash counters, there shall be no limit for accepting / paying
24 7
cash from / to the customers.
21
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• in other counters, receipt of cash and authorization of the cash received upto Rs.
50,000.
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• Cash receipts for issuance of pre-signed DDs, etc. independently upto and including
Rs. 50,000.
• Passing cash cheques and other like instruments independently upto and IncludIng Rs.
5

50,000.
• Passing clearing/transfer vouchers/other similar instruments independently upto and
including Rs. 1,00,000.
• Passing clearing and transfer vouchers and other similar instruments of Rs. 1,00,000
30

and above but upto Rs. 2,00,000 jointly with another Customer Service Associate/ upto
Rs.2,50,000/- with Senior CSA (Cash) / upto Rs.4,00,000/- with Special CSA.
• a Customer Service Associate may be utilized in Administrative offices / departments to
work and assist officers in routine correspondence, follow up, generation of statistical
data, returns and statements, working as Assistants to Executives, etc To work in
inward/outward clearing department/exclusive departments / relating to thi specialized
branches like Service Branch, Cheque Processing Centres etc., lssigned duties lik9
scanning of cheques, uploadinget c
Banks should evolve SOPs / guidelines for allocation of work to Customer Service
Associates who are persons with benchmark disabilities.
• Customer Service Associate may be sent on deputation to Bank’s own training
establishment/s or to any organization / Institution outside of the Bank. • CSA may enter
and feed the details of remittances under NEFT and RTGS but authorization and
responsibility thereof shall be of a supervisory staff.
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• Assisting the customers to activate net banking / mobile banking facility • Sensitising
customers about digital products, loan products, and available alternate delivery
channels.
• Working in Advances / Credit Department and generating CERSAI from Cersai portal •
Feeding data in Cersai portal for further verification & authorization by a supervisory
staff. • in Forex Department, CSA may be asked to work as a maker in inward remittance,
outward remittance, realisation of Export Bills, Letter of Credit lodgment for Import and
Export Bills, View Swift credit entries and sending intimation of the same.
To work in I.T. department to undertake duties that are done by RCC or at Helpdesk like
running a patch programme, Maintaining records of Hardware etc. (employees with
qualification of BCA, B.Tech, MCA, etc. may be entrusted with such duties)

DIGITAL EVIDENCE POLICY FY 2024-25 (CISD CIRCULAR NO. 09 /2024)

:34
It consists of concise and practical series of statements, declaring the management’s
views and position regarding Digital Evidence, according to Bank’s specific requirements.
24 7
21
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Digital Evidence is any evidence in the “electronic form” as defined by IT Act 2000 and
further amended vide the IT (Amendment) Act, 2008 and any other laws for the time
being in force. As per section 65B of Indian Evidence Act 1872, any information
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contained in an electronic record which is printed on a paper, stored, recorded or copied

in optical or magnetic media produced by a computer [hereinafter referred to as the
computer output] shall be deemed to be also a document without further proof or
production of the original, provided it is signed by a person occupying a responsible
5

official position in relation to the operation of the relevant device or the management of
the relevant activities.
Prior to enactment of the Information Technology Act, 2000 (IT Act), documentary
evidences, produced in a court as primary evidence, were to be in original in physical
30

form only. In the year 2000, the Parliament enacted the IT Act which amended the
existing provisions of law to allow for the admissibility of digital (electronic) evidence. The
IT Act has been further amended vide the IT (Amendment) Act, 2008. The IT Act,
besides amending, inter alia, the Indian Evidence Act 1872 (the Evidence Act) and the
Banker's Book Evidence Act 1891, recognizes transactions that are carried out through
electronic data interchange and other means of electronic communication.

Digital evidencing and forensic deals with the recovery, investigation, and analysis of
electronic data, and is often used to unearth evidence in litigation cases, criminal cases,
or in internal investigations.

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NON-INDIVIDUAL - SAVING ACCOUNT OPENING THROUGH DOCUMENT
MANAGEMENT SYSTEM (DMS)OPERATIONS DIVISION (CASA BACK OFFICE)
Circular No. 01/2024
DMS Application is live across the Bank for opening of saving and current account and
new facilities are added as per business requirement.
In order to further enhance the Account Opening Process (AOP), Saving Account
opening functionality for Non - Individual (Corporate) customers has also been provided
in the DMS application. This functionality has been provided under existing process
PNB-NI wherein the accounts will be generated in DMS in freeze mode (014). After
account number generation, branches will do the scanning of AOF, KYC & other required
documents and will send case to Casa Back Office (CBO) in DMS for verification &
activation.
All field functionaries are advised to get themselves acquainted with this new
functionality in DMS and ensure that all saving accounts for non-individual customers are

:34
processed using DMS.
24 7
21
The Job Card for Non Individual customers is already available on Knowledge Centre -
Knowledge Repository>>SOPs>>Operations Division. In case for any issues or support,
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please contact DMS Helpdesk at 01244176884/4176988 or mail at

[email protected] (For technical issues) and 0124-4126153/4176942 or mail at
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[email protected] (For Operational issues).

5

INTRODUCTION OF NEW CUSTOMER CARE TOLL FREE NUMBERS - 1800

1800 & 1800 2021 reference CCC CIRCULAR NO. 13/2024
Bank has provided the guidelines to improve the visibility of Toll-Free Numbers (TFNs)
and to help the customers to easily remember the Bank’s two new 8-Digit
30

TFNs i.e. 1800 1800 and 1800 2021.

Bank will also continue to provide services on existing 11-Digit Toll-Free Numbers i.e.
1800 180 2222 and 1800 103 2222 till the new 8-Digit TFNs are popularized and
thereafter discontinue the 11-Digit Toll-Free Numbers.
HO/ZO/CO/Branches and other offices are advised to update the aforementioned
numbers on Notice/Display boards/Banners/Passbooks/Stationery /SMS/Emails/Debit
Cards/IBS-MBS/Website/Social Media Handles/ATM, BNA Screen, etc. with immediate
effect.

185 | P a g e
NON-INDIVIDUAL - SAVING ACCOUNT OPENING THROUGH DOCUMENT
MANAGEMENT SYSTEM (DMS)- OPERATIONS DIVISION (CASA BACK OFFICE)
Circular No. 01/2024

DMS Application is live across the Bank for opening of saving and current account and
new facilities are added as per business requirement. In order to further enhance the
Account Opening Process (AOP), Saving Account opening functionality for Non -
Individual (Corporate) customers has also been provided in the DMS application. This
functionality has been provided under existing process PNB-NI wherein the accounts will
be generated in DMS in freeze mode (014). After account number generation, branches
will do the scanning of AOF, KYC & other required documents and will send case to
Casa Back Office (CBO) in DMS for verification & activation.
The Job Card for Non Individual customers is already available on Knowledge Centre -
Knowledge Repository>>SOPs>>Operations Division. In case for any issues or support,

:34
please contact DMS Helpdesk at 01244176884/4176988 or mail at
[email protected] (For technical issues) and 0124-4126153/4176942 or mail at
[email protected] (For Operational issues).
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21 ******
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