General Studies · RBI Deposit Guidelines
A Current Account was maintained by a sole proprietor who passed away. According to the RBI operational guidelines regarding accounts of deceased depositors, how should the bank treat interest liability on the credit balance in a Current Account from the date of death until the settlement of the claim with the legal heirs?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The bank is allowed to charge a dormant account fee instead of paying interest if the heirs did not notify the bank within 30 days.
- 2Interest should be calculated at the prevailing Fixed Deposit rate for the exact period the funds remained with the bank after death.
- 3The bank must pay interest at the prevailing Savings Bank rate from the date of death of the account holder till the date of payment to the legal heirs.✓
- 4No interest is payable on the balance because Current Accounts are strictly non-interest-bearing instruments.
Correct answer
The bank must pay interest at the prevailing Savings Bank rate from the date of death of the account holder till the date of payment to the legal heirs.
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