RBI details Payment of interest on accounts frozen by banks

Mumbai, Sep 19 (UNI) The Reserve Bank of India today came out with a fresh procedure in case of Term Deposit Accounts, frozen by enforcement authorities.

Referring to issues raised regarding payment of interest on such accounts, RBI issued a circular to all scheduled commercial banks detailing the procedure after holding consultations with the Indian banks Association.

Under the procedure announced, a request letter must be obtained from the customer for renewal for a term equal to the original term, on maturity and it was not necessary to give a new receipt. However, suitable note may be made regarding renewal in the deposit ledger.

Renewal of deposit may be advised by registered letter/speed post/courier service to the concerned Government department under advice to the depositor. In the advice to the depositor, the rate of interest at which the deposit is renewed should also be mentioned.

If overdue period does not exceed 14 days on the date of receipt of the request letter, renewal may be done from the date of maturity. If it exceeds 14 days, banks may pay interest for the overdue period as per the policy adopted by them, and keep it in a separate interest free sub-account which should be released when the original fixed deposit is released.

Further, with regard to the savings bank accounts frozen by the enforcement authorities, banks may continue to credit the interest to the account on a regular basis, the RBI said.

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