Fixed Deposit Claim Relinquishment by the Nominee

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Akshit Jain (Querist)
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04 November 2024 The deceased father nominated his elder son as the beneficiary of his fixed deposits in the bank. The elder son voluntarily wants to relinquish his fixed deposit claim in favor of his mother and would like the bank to issue a cheque/draft for the settlement proceeds in favor of the mother. There are 3 legal heirs - mother and two sons and there is NO dispute among the heirs. The bank insists that the settlement can be made only in favor of the nominee i.e., the elder son. How can the elder son enforce the settlement in favor of his mother? What are the legal options? Can he submit a relinquishment deed or something similar to the bank?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 November 2024 As such legal course is bit tricky and time consuming to get court order asking bank to release the funds in favor his mother.
Easier way is to give the total amount to his mother on its maturity or after pre-mature withdrawal.

Akshit Jain

Akshit Jain (Querist)
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04 November 2024 Isn't nominee merely a trustee and not the beneficiary? If so, nominee has the legal obligation to distribute funds among the legal heirs. As both sons are willing to relinquish their claim as 33.33% heir in favor of the mother and provide a letter/deed to the bank to this effect, shouldn't the bank honor the letter?

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 November 2024 But nominee has to complete his liability on its maturity. Bank is liable to pay the amount only to nominee, as per the advise of the original account holder.

Akshit Jain

Akshit Jain (Querist)
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04 November 2024 Bank has pre-maturely closed the FDs and transferred the proceeds to the savings account of the deceased. Mother is the nominee on the savings account. Elder son was the nominee on the FDs which have already been closed. Can't mother claim the entire balance of savings account which includes the prematurely closed FDs as she is the nominee on the savings account?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 November 2024 When the FD is closed, so the question is for sav account, where mother being nominee, she has to close the sav account and get the proceeds to her own account. Finally, the liability of distribution lies over mother. She can settle it with other heirs.