Don’t harass kin of deceased for succession certificate, court tells RBI

A DELHI court has raised concerns over banks asking legal representatives of the deceased to submit a succession certificate even in cases where there is no legal dispute when it comes to inheritance.

A succession certificate procured from the court, which involves payment of a court fee, is required to claim a deceased’s cash from the bank — but only when there is a dispute over it.

Taking note of the court order, the RBI has directed banks not to insist on the certificate in cases where there is no legal dispute.

“I have come across several caseswherebanksareinsisting on succession certificate and not even informing the legal representatives (LR) of the deceased account holders about the policy of banks... RBI must ensure that all banks disclose their policy fairly... All banks whose policy is not to insist on succession certificate unless there is dispute must strictly complywiththesaidpolicyand RBI must look into the policy... so that hardship of common man can be alleviated,” Administrative Civil Judge Harjyot Singh Bhalla observed.

Typically, 2.5 per cent of the total amount to be inherited is to be paid as court fee to the obtain the certificate. Against the backdrop of demonetisation, paying such a fee has become more difficult for people, sources said.

“The government’s initiative has been to encourage opening of bank accounts and with demonetisation, all the money is being deposited in the banks... If banks continue to ignore their own polices and harass LRS of the deceased account holders, insisting that in every case succession certificate be produced, only with the intent to shirk work, it may lead to a serious crisis,” the court said.

“Even if 5 per cent of the total population was to expire within the next 10 years, at least 5 crore succession petitions will be filed across the country, resulting in surge in litigation and it may even choke the court system,” the court said.

Taking note of the order, the RBI said it will “take a serious view of any lapses noticed in this regard”. It has also written to the Chief Executive Officer of the Indian Banks Association to look into the order.

A succession certificate is required to claim a deceased’s cash from the bank only when there is a dispute over it