Bank's Policy on Acceptance and operations of deposit accounts from Individuals (non-business)

1. Preamble: Based on the recommendations of the Committee on Procedures and Performance Audit on Public Services- Banking Operations, a transparent and comprehensive policy has been formulated on all aspects of acceptance and operations of a deposit account from individuals (non-business). The Reserve Bank of India is empowered to issue directives/advices on interest rates on deposits and other aspects regarding conduct of deposit accounts from time to time. This policy document on deposits outlines the guiding principles in respect of formulation of various deposit products offered by the Bank and terms and conditions governing the conduct of the account.

2. Applicability: This policy applies to all types of deposits, such as term deposits including recurring deposits, Savings Bank deposits and Current Deposits received from individuals, both in single name and joint names of two or more individuals. The deposits accepted by all branches/offices of the bank including Extension Counters and Satellite Branches are covered by this policy.

3.Observance of IBA code for Banking Practice: All Branches/offices, Extension Counters and satellite Branches of the Bank subscribe to all aspects of the IBA Code for Banking Practice relating to the acceptance and operations of deposit accounts evolved by Indian Banks' Association and currently in force. The Bank also reiterates its commitment to individual customers outlined in Bankers' Fair Practice Code of Indian Banks' Association.

4. Opening of deposit accounts:

A. Rupee Deposits: Deposits are accepted from individuals in single name or jointly in the names of two or more individuals, subject to proper identification and introduction in accordance with the principles of Know Your Customer (KYC). The account opening form and other material required for opening the account will be provided by the Bank and branch officials will be willing to provide any information / clarification required for opening the account. In addition to the due diligence requirements under KYC norms, the Bank is required by law to obtain the Permanent Account Number (PAN) or General Index Register (GIR) number or alternatively declaration in Form no.60 or 61 as prescribed in Income Tax Act / Rules. The term deposits are accepted for a minimum period of 15 days and for a maximum period of 10 years. Deposits of Rs.1 lakh and above can be accepted for a minimum period of 7 days. Recurring Deposit is accepted for a minimum period of 6 months and for a maximum of 10 years. However, deposits received from senior citizens will carry additional interest rate of 0.75% over the Card rates for total deposits of not exceeding Rs.25 lakhs in the aggregate at the same branch or different branches. The maximum period of 10 years for acceptance of deposit may be relaxed in terms of orders of competent courts.

In the case of joint account opened in the names of more than one individual, mandate can be given for operation of the account in the following manner:

Either or Survivor: If the account is held by two individuals, it can be operated by any of the account holder and in the case of death of one of the account holder, the account operated/balance payable to the surviving account holder.

Anyone or Survivors: If the account is held by more than 2 individuals, the account can be operated by any one of the account holders or the final balance is payable to the survivors on the death of any one or more account holders.

Joint Operation: All the account holders to operate jointly. On the death of any one or more of the depositors the balance is payable to survivor(s) and legal representatives of the deceased.

The mandate can be modified at any time with the consent of all the account holders. In the case of term deposit, the mandate for operation will become operational only on or after the date of maturity.

Deposits of Non-resident Indians: Rupee Deposits are also accepted from Non-resident Indians and persons of Indian Origin. In the case of Non-resident External (NRE) accounts, all the joint account holders should be non-resident Indians or persons of Indian Origin. In the case of Non-resident Ordinary (NRO) account, joint account with resident Indians is also permitted. In the case of Non-resident External accounts, term deposits are accepted for a minimum period of 1 year, as per RBI directive, and for a maximum period of less than 5 years. Period of deposit and interest rates in NRO accounts are the same as that of the resident deposits.

B. Foreign Currency Accounts: Foreign currency deposits are accepted from both resident and non-resident Indians. Deposits are accepted in select currencies from individuals singly or jointly by two or more individuals. The Know Your Customer norms are followed while opening foreign currency deposits also.

In the case of Foreign currency account in the name of Non-residents, all the joint account holders should be non-residents. In the case of resident foreign currency account, the deposits are opened in the form of current deposit account only and no interest is paid on the deposit. The deposits are opened in select currencies viz.GBP, USD, EURO. The minimum balance in the account should be USD 500 or its equivalent.

The Foreign currency non-resident (FCNR) account is opened in term deposits for a minimum period of 1 year and a maximum of 3 years only. The interest rate payable on FCNR deposit is linked to LIBOR rates and are revised every week. Foreign currency account is also opened in the name of returning non-resident Indians to enable them to keep their foreign currency savings brought in by them. The funds can be held in Savings Bank account without cheque facility or in term deposits not exceeding 3 years. The debits and credits and repatriation of balance in all these account are subject to FEMA regulations advised by Reserve Bank of India from time to time.

5. Minors' Account: Minors, who have completed 10 years of age and are able to read and write, can open S.B. and term deposits, which includes Recurring Deposit in their individual names. In the case of S.B. the maximum balance in such account should not exceed Rs.50,000/-. There is, however, no ceiling for term deposit accounts. Joint accounts of minors with natural or court appointed guardian could also be opened.

6. Account of Illiterate persons: Bank may open deposit account other than current account in the name of an illiterate person. No cheque book is provided in the Savings Bank account of the illiterate person. At the time of withdrawal from Savings Bank account and or repayment of term deposit the account holder should affix the thumb impression in the presence of the authorised officer of the Bank, who will verify the identity of the person.

7.Nomination facility: Nomination facility is available on all deposit accounts opened by individuals. Nomination can be made in favour of one individual only. Nomination so made can be changed / cancelled by the account holder(s) at any time. Nomination can be made in favour of a minor also.

8.Minimum amount of deposit: Depending upon the cost of operations and the kind of services / value additions offered, Bank may fix the minimum amount of deposit that will be accepted in a term deposit account including recurring deposit and the minimum balance that should always be maintained in an operated deposit account such as Savings Bank account and Current Deposit account. Currently, the minimum balance requirement for various types of deposit accounts are given in Annexure I.

In order to ensure that the minimum balance is maintained, moderate charge as given in Annexure I is levied for non-maintenance of minimum balance in Savings Bank account and Current Deposit account.

9.Charges for maintaining deposit account: While there is no charge for maintenance of term deposit accounts, nominal charges are payable on operating accounts viz. Savings Bank accounts and Current Deposit accounts. The schedule of charges are given in the table in Annexure II.

10.Interest rates on deposits: In the deregulated environment, Bank fixes the interest rates on term deposits including Recurring Deposit based on market conditions, need for mobilisation of funds and keeping in mind the cost of funds. The interest rates are subject to revision from time to time. The interest shall be calculated at quarterly rests on term deposits. In the case of term deposits with monthly interest payments, the interest shall be calculated for the quarter and paid monthly at discounted value. The interest on term deposits including Recurring deposit is calculated by the Bank in accordance with the formulae and conventions advised by Indian Banks' Associations. Bank, based on the market conditions, need for mobilisation of funds and taking into account the cost of funds, presently offers additional interest on single deposits of Rs.15 lakh and above. Whenever interest rates are revised, the revised rates are applicable to fresh deposits as well as renewal of matured deposits only.

Bank has the 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. Bank will give a certificate for the Tax deducted at source.

The interest rate on Savings Bank deposit is currently determined by RBI and it is at present 3.50%. S.B. interest is payable every half-year in the month of February and August calculated on the minimum balance between the 10th and the last working day of every month. As per RBI regulation, Current Deposits do not attract any interest. The current interest rates are given in Annexure III.

NRE Deposits: The interest rates on NRE term deposits are fixed, as per RBI directive, not exceeding LIBOR/SWAP rates for US Dollars for corresponding maturity prevailing as on the last working day of the previous month and will be made applicable for the following month. The interest rate on NRE S.B. deposits presently will not exceed the LIBOR/SWAP rate for US Dollars for 6 months maturity. The interest rates on S.B. deposits would be fixed for each quarter based on the LIBOR/SWAP rate as on the last day of the previous quarter.

11.Method of calculation of interest: For the purpose of calculation of interest on domestic term deposit, on deposits repayable in less than three months or where the terminal quarter is incomplete, interest is paid proportionately for the actual number of days reckoning the year at 365 days.

12. Payment of interest on deposits maturing on a holiday: In respect of a term deposit maturing for payment on a Sunday or a holiday or a non-business working day, bank would pay interest at the originally contracted rate on the deposit amount for the Sunday/holiday/non-business working day, intervening between the date of the expiry of the specified term of the deposit and the date of payment of the proceeds of the deposit on the succeeding working day.

13. Rounding off transactions: All transactions including payment of interest on deposits/charging of interest on advances will be rounded off to the nearest rupee; i.e., fraction of 50 paise and above shall be rounded off to the next higher rupee and fraction of less than 50 paise shall be ignored.

14.Premature closure of term deposits: If a depositor requests the Bank in writing for closure of a term deposit before its normal maturity date, it will be acceded to, irrespective of the amount or period of deposit. The rate of interest agreed at the time of accepting the deposit will not be payable, in case of closure of deposit before the maturity date. The interest payable on such deposit will depend on the period the deposit remained with the Bank and the amount of deposit. Currently, Bank pays interest on premature closure in accordance with the chart given in Annexure IV.

15. Premature renewal of term deposits: The Bank, on a request from the depositor, would allow conversion of a term deposit, a deposit in the form of daily deposit or recurring deposit, to enable the depositor to immediately reinvest the amount lying in the aforesaid deposits with the Bank in another term deposit. The Bank would pay interest in respect of such a term deposit at the rate prevailing on the date of opening applicable for the period the deposit remained with the Bank without any premature closure charges, provided that the deposit remains with the Bank after reinvestment for a period longer than the remaining period of the original contract.

16.Overdue deposits: A term deposit, which is not either closed or renewed for a further period on the date of maturity, automatically becomes an overdue deposit. The deposit ceases to earn interest after the maturity date. However, interest can become payable on an overdue deposit during the period it remained overdue, only if the deposit is renewed for a further period from the date of presentation for renewal, subject to the terms and conditions given in Annexure V.

In order to avoid a deposit becoming overdue, Bank offers the facility of automatic renewal of term deposits, for which the depositor should give instruction to the Bank in writing, at the time of opening the deposit.

17.Issue of maturity notices for term deposits: As a matter of courtesy, and to maintain good customer relations, Bank has a system of sending intimation of impending maturity of term deposits to the depositors at the last known address. However, if for whatever reason the customer wishes not to be intimated, he/she can give necessary instructions to the Bank at the time of placing the deposit.

18.Addition / deletion of names in deposit accounts: 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. However, the amount or duration of the original deposit should not undergo a change in any manner in case the deposit is a term deposit. Bank may, at its discretion, and at the request of all the joint account holders of a deposit receipt, allow the splitting up of the joint deposit, in the name of each of the joint account holders only, provided that the period and the aggregate amount of the deposit do not undergo any change.

19. Interest on deceased depositors' account: In the case of a term deposit standing in the name/s of a deceased individual depositor, the interest on such deposits is paid as follows:

1. At the contracted rate of the deposit if the deposit is paid on the maturity date.
2. If the payment of the deposit is claimed before maturity date, interest is paid at the appropriate rate for the period for which the deposit remained with the Bank, without charging premature closure charges.
3. In the case of death of depositor before maturity date and amount is claimed after the date of maturity, interest is paid at contracted rate till the date of maturity and from the date of maturity to the date of payment, simple interest is paid at the applicable rate operative on the date of maturity, for the period the deposit remained with the bank beyond the date of maturity.
4. In the case of death of the depositor after the date of maturity of the deposit, interest is paid at savings bank rate operative on the date of maturity from the date of maturity till date of payment.
5. In the case of balances lying in current account standing in the name of a deceased individual depositor/sole proprietorship concern, interest is payable only from 1st May 1983 or from the date of death of the depositor, whichever is later, till the date of repayment to the claimant/s at the rate of interest applicable to savings deposit as on the date of payment.
6. 20. Advances against term deposits

Bank may, at its discretion, grant advance against a term deposit receipt duly discharged standing in the name of the borrower, either singly or jointly up to 90% of deposit amount on execution of loan/security documents. Bank may also grant loan against minor's deposit whose guardian is competent to borrow on behalf of the minor and where the advance is made to the guardian of the minor in such a capacity.

21. Product approval process: New deposit products are introduced and existing products modified by the Bank after a thorough study is made of the product, similar products already existing in the market, customer expectations and the market for such a product. The views and opinions of customers received through branches/Regional Offices are taken into account while designing new products and modifying existing products. While formulating new products, the guidelines issued by Reserve Bank of India and Indian Banks' Association are taken into account. All new products and modification of existing products are approved by the Board of the Bank before being implemented.

22. Inoperative accounts: Current Deposit accounts and Savings Bank accounts in which there has been no operation for a total period of 2 years or more will be transferred to inoperative accounts. A notice will, however, be sent to the depositor before such transfer. However, the account will be made operational if the depositor wants to undertake transactions in the account. The inoperative S.B. account will attract a service charge of Rs.20/- per half year, debited in the month of September and March if the account remains inoperative even one month after issue of notice to the depositor. If the balance in the account is Rs.20 or less, the entire amount will be recovered towards service charges. S.B. accounts and Current Deposit accounts, which have remained inoperative for a total period of 5 years and term deposits not repaid or renewed for 5 years from the date of maturity, will be transferred to unclaimed balances account maintained at Central office. If the depositor desires to continue the account, it can be recalled from Central Office by the branch where the account was earlier maintained.

23.Undesirable accounts: In cases where the operations in S.B. or current deposit account are not satisfactory, Bank may decide to close the account and pay the balance in the account to the depositor, after giving due notice. Few instances, where the account can be treated as undesirable are frequent non-maintenance of minimum balance, number of operations are more and not commensurate with the balance maintained in S.B. account, cheques are being issued without adequate funds or arrangements to meet the cheque amount and the depositor is reported to be indulging in illegal or undesirable activity.

24. Deposits of Senior Citizens: Deposits received from Resident Senior Citizens, who have completed 60 years of age, are given certain additional privileges, in tune with the guidelines received from RBI. Proof of age is required for opening senior citizen deposits. Joint accounts with another senior citizen or with person who is not a senior citizen can be opened. In the latter case, the senior citizen should be the first named depositor. Deposits are accepted for a minimum period of 15 days and for maximum period of 10 years. In the case of recurring deposits, the minimum period of deposit is 6 months. Minimum deposit accepted under the scheme is Rs.5000/- and in the case of recurring deposit, the minimum monthly instalment should be Rs.100/-. Additional interest of 0.75% p.a. is payable on the senior citizen deposits on deposits aggregating to Rs.25 lakh in the same branch or at different branches. The additional interest rate of 0.75% p.a. is not payable on deposits over and above the ceiling of Rs.25 lakh if the aggregate of all deposits kept in the same branch or at different branches exceeds Rs.25 lakh.

25. Information to depositors: Bank's policy relating to opening and maintenance of deposit accounts and the various charges on such accounts and the revisions in such policy and the charges, will be informed to the depositors in the following manner.

• The terms and conditions for opening a deposit account and the charges that will be levied on the account will be given in the account opening form for the information of the depositors before opening the account.
• In case of any revision the revised policy/requirements and revised charges will be displayed in a prominent place in branches.
• Additionally, depositors will be informed about the revised policy/requirement/ charges either through press releases or advertisement in print media and or by displaying in Bank's web site www.iob.com.
• All deposit interest rates are displayed at a prominent place in all branches.

   

26. Redressal of complaints and grievances: Depositors having any complaint or grievance regarding the services of the Bank, which could not be settled by the counter staff can approach the Branch Manager for settlement of the complaint/grievance. Additionally, grievances can also be voiced at the open house meeting conducted on the 15th of every month at branch/Regional Offices/Central Office of the Bank. Complaints made by depositors in writing to Customer Services Department at Regional

Office or Central Office will also be attended to expeditiously. If the depositor is not satisfied with the response received from the Bank, he/she has a right to approach Banking Ombudsman appointed by Reserve Bank of India.

27. Customer Service Survey: To survive in the present competitive environment, quality of service rendered by the Bank needs to be improved constantly. By having direct interaction with customers, Bank has to gauge the satisfaction level experienced by them. Necessary adjustments are to be made in tune with the expectation of the customers. For this purpose it is absolutely necessary to conduct survey by selecting suitable branches, segmenting customers on demographic consideration, selecting thrust areas of operation etc. As a policy, the study will be conducted once in 2 years. To ensure objectivity, biennial survey will be conducted internally by our staff and by outside agencies, alternatively.

28.Triennial Audit of Customer Service: Various instructions are being issued from time to time for ensuring quality customer service at the Branches. In order to ensure whether these instructions are meticulously followed at the branch level, periodical auditing is necessitated. The audit will be conducted by Inspection from CO / Inspectorates at various centres. It will synchronise with the Inspection of Branches once in 12/18 months. Also, in deference with RBI instructions, Customer Service Audit is being conducted by Regional Offices in all the branches under their jurisdiction and a report is to be submitted to Central Office as on 31st March & 30th September every year with special focus on 25 Core recommendations of Goiporia Committee. The conduct of audit with above indicated periodicity will be in lieu of the Triennial Audit.

29. POLICY ON COLLECTION OF (LOCAL / OUTSTATION) CHEQUES (IOB-PCC) (Since revised and given separately)

1. Outstation cheques (drawn on branches of IOB/drawn on branches of other banks) tendered by constituents for collection shall be credited, within 7 days. The above time frame for collection of cheques has been adopted voluntarily by our Bank as a measure of self-discipline for enhancing the deliverance of quality Services to our esteemed customers.

2. The time frame referred in (1) above is applicable only in case of outstation cheques, drafts, etc., and NOT for instruments payable abroad or instruments drawn in Foreign Currency or instruments such as Treasury Bills, Pension Bills, etc. When the instrument is lost or returned unpaid, no interest / compensation is payable by us.

3.It is reiterated that the collection period of Seven days is the maximum period

under self-imposed time frame and no efforts will be spared by our branches in

effecting expeditious collection of instruments tendered by constituents.

4.Interest payment for delayed collection.

4.1 In case of delay, interest on delayed collection will be paid by the collecting branch of our Bank for the period beyond Seven days, from the date of lodgement of instrument for collection at Savings Bank interest rate prevailing on the date of lodgement. Such interest is payable only if it works out to Rupees Five or more.

4.2 This interest will be credited to the respective Customer’s Account along with the proceeds of the collection instruments, without awaiting a request from theCustomer.  

5. Notice as per the following text will be displayed at all branches of our bank for the benefit of customers.

6. When the cheques are dealt under clearing mechanism, credits to the beneficiaries accounts will be effected within the time schedule of clearing cycle prevalent at the respective Centres.  

POLICY ON IMMEDIATE CREDIT OF

(LOCAL / OUTSTATION CHEQUES (IOB-PICC)

1. Immediate credit of cheques

1.1 All our branches will extend immediate credit of local and outstation cheques

Upto face value of Rs.Fifteen Thousand per instrument to the individual Customers having Savings Bank / Current Account and Cash Credit Account subject to the following conditions :

(a) The customer’s account should be in his / her personal name and should  not contain transactions relating to business. Such accounts may be in  individual or joint names.

(b) The account must have been properly introduced and six months old

(c) The customer must not be enjoying any other cheque purchase facility  with our bank.

(d) There must be satisfactory transactions in the account.

(e) There must be no adverse experience in the account, in the past, such as

•  
  • Return of cheques issued by the constituent due to non availability of funds (this includes cheques received through Clearing and also cheques favouring third parties tendered over the counter for encashment)

•  
  • Difficulty experienced in recovery of advance amount in case of return of the purchased instrument on any earlier occasion

•   
  • Misuse of this facility or any other banking facility on any previous occasion 

• • Record or report of insolvency, lunacy, pending court prohibitory / attachment order, etc.

1.2 The facility is not available to the following categories of customers :

•  
  • Minors
  • Non-residents
  • Individuals who are ineligible for any credit facility in general, viz., insolvent, lunatics, etc.

1.3 Self cheques and cheques favouring on individual issued under single signature of the same individual in the case of Proprietary, Partnership and HUF concerns are NOT eligible for the immediate credit facility.

1.4 Customers who wish to avail this facility are required to authenticate the text of rubber stamp affixed on the pay-in-clip.  

1.6 Within the overall limit of Rupees Fifteen Thousand per customers, branches may afford credit to customer in respect of more than one cheque at a time.

1.7 In the even of cheque dealt under immediate credit facility being returned unpaid, the interest recovery will be as follows :

i. No interest will be charged to the customer for the period between the date of credit of the cheque lodged and its return.

ii. Branches will charge interest from the date of return of the cheque till the reimbursement of money to the bank by the customer.

iii. Where the proceeds of cheque is credited to a Savings Bank, savininterest  will not be payable on the amount so credited if the cheque is return unpaid.

1. Notice as per the following text will be prominently displayed at all branches of our Bank for the benefit of customers.

Current Deposit Account:

In order to ensure that the minimum balance is maintained, moderate charges are levied as given in the table below:

Term deposits: Minimum amount accepted as deposit

Annexure II

Charges for maintaining deposit account: While there is no charge for maintenance of term deposit accounts, nominal charges are payable on operating accounts viz. Savings Bank accounts and Current Deposit accounts. The schedule of charges are given in the following table:

Annexure III

Interest payable on deposits

(The interest rates are subject to change from time to time)

Interest rate on Resident / NRO Savings Deposit: 3.50% p.a.(w.e.f.1.3.03)

NRE Savings Deposits: 3.50 % p.a.

Interest Rates on Term Deposits

Click here to view the Interest rates for Domestic and NRO term deposits / NRE Term Deposits 

Annexure IV

I.Interest payable on premature closure of a term deposit

II. Instructions relating to premature closure of NRE term deposits

AnnexureV                                                                                                                                                                                                         

Payment of interest on renewal of overdue deposit

(Applicable to Domestic, NRO and NRE term deposits)

Interest Rate on Tax Saver Deposit: The revised interest rate on IOB-Tax Saver deposit effective from 15^th February 2007 to 31^st March 2007 is given below: