Model Policy on Bank Deposits
One of the important functions of the Bank is to accept deposits from the public for the purpose of lending. In fact, depositors are the major stakeholders of the Banking System. The depositors and their interests form the key area of the regulatory framework for banking in India and this has been enshrined in the Banking Regulation Act, 1949. The Reserve Bank of India is empowered to issue directives / advices on interest rates on deposits and other aspects regarding conduct of deposit accounts from time to time. With liberalization in the financial system and deregulation of interest rates, banks are now free to formulate deposit products within the broad guidelines issued by RBI.
This policy document on deposits outlines the guiding principles in respect of formulation of various deposit products offered by the Bank and terms and conditions governing the conduct of the account. The document recognizes the rights of depositors and aims at dissemination of information with regard to various aspects of acceptance of deposits from the members of the public, conduct and operations of various deposits accounts, payment of interest on various deposit accounts, closure of deposit accounts, method of disposal of deposits of deceased depositors, etc., for the benefit of customers. It is expected that this document will impart greater transparency in dealing with the individual customers and create awareness among customers of their rights. The ultimate objective is that the customer will get servicesthey are rightfully entitled to receive without demand.
While adopting this policy, the bank reiterates its commitments to individual customers outlined in the code of Banks Commitment to Customer adopted by the banks. This document is a broad framework under which the rights of common depositors are recognized. Detailed operational instructions on various deposit schemes and related services will be issued from time to time
2. Types of Deposit Accounts
While various deposit products offered by the Bank are assigned different names. The deposit products can be categorised broadly into the following types. Definition of
major deposits schemes is as under: –
i) “Demand deposits” means a deposit received by the Bank which iswithdrawable on demand;
ii) “Savings deposits” means a form of demand deposit which is subject torestrictions 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 periodwithdrawable only after the expiry of the fixed period and includes deposits
such as Recurring / Double Benefit Deposits / Short Deposits / Fixed Deposits/Monthly Income Certificate /Quarterly Income Certificate etc.
iv) Notice Deposit means term deposit for specific period but withdrawable ongiving atleast one complete banking day’s notice;
v) “Current Account” means a form of demand deposit wherefrom withdrawalsare 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 accountswhich are neither Savings Deposit nor Term Deposit;