Banking Regulation Act, 1949; S. 45ZA –
Banking Companies (Nomination) Rules, 1985; R. 2(1) -- Whether bank can refuse to make payment to nominee -- Nomination made by a depositor/account...
Read MoreBanking Regulation Act, 1949; S. 45ZA –
Banking Companies (Nomination) Rules, 1985; R. 2(1) -- Whether bank can refuse to make payment to nominee -- Nomination made by a depositor/account holder is the eflection of his wish upon identification by him of the recipient of the deposit lying in an account in the event of death of such depositor/account holder and to hold the same in his (recipient’s) custody for being distributed according to the law of succession. Nomination, which is made without any coercion, undue influence or misrepresentation and is accepted by a banking company upon a satisfaction that the nomination does not suffer from any of the vitiating factors and clothes the nominee to receive the amount, ought to be acted upon after the death of the depositor/account holder, for, that would result in honouring his wish -- If at all the nomination is, at a subsequent stage, found to suffer from any technical defect precluding the banking company to act on such nomination, it ought to be the bounden duty of the officials of the bank to get the nomination rectified/altered so as to bring it in conformity with the statutory requirements provided the depositor/account holder is alive. Once the opportunity to get the nomination rectified/altered is lost by the tardy and indolent acts of the officials of the bank, it would not be in the interest of justice to allow the banking officials to refuse to honour the wish expressed by the depositor/account holder.
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