Modify FD form, RBI  tells urban co-op banks

The Reserve Bank of India (RBI) has asked urban co-operative banks to modify fixed deposit (FD) account opening form to allow premature withdrawal in the event of death of one of the joint account holders without any penalty.

Under the modified norms, it would be easier for the surviving joint account holders of FD with ‘either or survivor’ or ‘former or survivor’ mandate to go in for premature withdrawal of fixed deposit in the event of death of the other.

As per RBI’s notification, banks will have to incorporate a clause in the FD form to give option of premature withdrawal by survivor in case of death of other joint account holder.

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