Quick Success Series. Safe Custody, Security, Safe Deposit Article & Safe Deposit Locker. Updated Upto 31 st October 2016

Transcription

1 Quick Success Series - Technology April 24, 2010 Quick Success Series Safe Custody, Security, Safe Deposit Article & Safe Deposit Locker QUICK SUCCESS SERIES, an initiative of SBLC Deoghar to facilitate the preparation of promotion seeking personnel of our Bank, appears to have succeeded in its objective to a large extent, as the readers are still approaching us for its revision/updation despite availability of plenty of other study materials. We would not have been able to sustain this unique effort of ours, without the active support and continuous encouragement of our DGM cum Circle Development officer Sri Bijayananda Padhi. We are deeply indebted to him for his co-operation and guidance. Sri Rakesh Roshan, Chief Manager (Training), Sri Kumar Priyank, Chief Manager (Training),Sri Sanjay Kumar Sharma,Manager(Training)and Sri Jitendra Kumar Arun, Manager(Training) at this SBLC have owned up this project and have taken pains to keep it relevant to the users by updating & improving it at half yearly interval. Though every care has been taken while updating the contents, we request our readers to point out any lapses at the earliest. Needless to mention this book is not a substitute of circular instructions issued by the Bank from time to time. For detailed guidelines please refer to Bank s latest circulars. Soft copy of this edition is available on our ftp:// in QSS folder and on SBI TIMES>PATNA CIRCLE>SBLC Deoghar site. Team SBLC Deoghar is humbled by the response and recognition, it is receiving from the readers within and beyond the circle. We wish the readers grand success in their endeavours. Sri Abhishek Kumar Sharma Assistant General Manager, State Bank Learning Centre, Deoghar Phone Fax agmstc.deoghar@sbi.co.in Updated By: Rakesh Roshan Chief Manager (Training) SBLC Deoghar Mobile r.roshan@sbi.co.in Updated Upto [Type text] Page 1

2 Safe Custody Safekeeping of Shares, Bonds, Govt Securities, TDRs, Magnums etc entrusted by customers to the Bank is known as Safe Custod Relationship between Customer & Banker in case of Safe Custody: Bailer & Bailee Scrips accepted under Safe Custody are entered in: Safe Custody Ledger Separate folio for each of the Govt. Securities, Shares etc are maintained in Safe Custody Register to know at any time the number & value of the different types of scrips held as safe custody Safe Custody/ Security are balanced once in Half Year Bearer Bonds, IVPs, TDR/STDR are held in Joint Custody of Manager (cash) & Branch Manager When a Scrip is withdrawn for renewal, it will be entered in :Securities Ex-Custody Register When a Govt Security is sent to PDO for interest collection, it will be entered in :Interest realized on securities register When securities are sent for sale under instructions from the customer, they are entered in: Securities and Shares Purchase & Sale Register Safe custody account has to be opened in the same name as found in the scrip Safe Custody A/c in the name of Minor can be opened only in respect of:tdr and not other securities In case of joint A/cs, COS 141R must be obtained regarding delivery either to the account holders jointly or to one or more of them or the survivor(s) Safe Custody Receipt (COS 139 A) is issued to the depositor as acknowledgement of scrips for safe custody. It is required at the time of delivery of scrips to the depositor. In case of loss of receipt, indemnity is required to be obtained before delivery of the scrips. Sometimes, a Memorandum of Securities (COS 339) is given to the depositor. It is a mere narration of the fact of the deposit on a particular date. Therefore, no indemnity is required in case it is lost. Memorandum of securities can be issued in respect of both security & safe custody accounts whereas safe custody receipt is issued only in respect of Safe custody accounts. Safe Custody scrips must be delivered to the depositor only against his acknowledgement on COS 49 after verifying his signature. Securities and shares held by the bank in safe custody in the names of deceased. Constituent must ordinarily be delivered to the legal representative of the deceased. Without production of legal representation on affidavit-cum-indemnity basis, as per discretionary powers given to different functionaries.. For this purpose, the value of the securities, shares etc. will be computed ay market value or redemption value whichever is higher. If all the legal heirs do not join in executing the indemnity or if there is a dispute between them, the Bank can insist on suitable legal representation. Since Indian Succession Act covers debts & securities, the scrips held under Safe Custody A/c can be delivered against succession certificate. The Safe Custody in CBS deals with two major functions viz.: i)safe Custody of articles/ scrip ii)security Register/ Ledger and maintenance of Gold ornaments. The Safe Custody in CBS handles: Issue of Safe Custody Receipt to the customers Printing of COS 49 Ex-custody Register functions Types of Safe Custody: 1. Safe Custody of Articles/ Envelopes for regular customers 2. Safe Custody of Collateral like paperbased Securities given by customers as Collateral. It is implemented in 4 types of Collaterals: a. Gold Securities b. Shares Securities c. Paper-based Securities d. TDR Securities 2

3 Securities All scrips like TDRs, STDRs, NSCs, KVIPs, IVPs and Shares which are offered as security for obtaining any loan constitutes-securities Except IVPs/TDRs/STDRs all other securities are kept under: Single custody. Scrips accepted as security are entered in Securities Ledger & Securities Register TDRs/STDRs accepted as security for advance are entered in Term Deposit Joint Custody Register Life Insurance Policies accepted as security for advance should be entered in Miscellaneous Security Register In case of death of a customer having a security A/c, the Bank can continue to collect the interest and credit it to his overdraft A/c as the Bank s Agency is coupled with interest. However, in respect of a safe custody a/c, the mandate will lapse on the death of the customer Safe Deposit Article Safekeeping of articles other than parcels received on account of L.S.C. bills, belonging to customers is Safe Deposit Article Relationship between Customer & Banker in case of Safe Deposit Article: Bailer & Bailee A receipt (COS 138-R) is issued to the depositor stating Received a sealed cover / box the contents of which are unknown but said to contain... The same is recorded on the packet / box also. In case of loss of receipt, delivery of the articles can be made only against indemnity. Packets containing Will must be super scribed by the maker-depositor with the legend Deliverable to Sri. on application. Such packets should not contain stipulations like please deliver to Sri.. on my death as it would be difficult to fulfill such directions. Also, only the packet containing the Will will be delivered on proof of death of the depositor and not any other packet kept as safe deposit. Other articles, if any will be delivered to legal representatives on production of probate. Packets of duplicate keys of other banks etc should be accepted only from and deliverable to the persons authorized to handle such keys. Such packets are kept free of charge by convention. Normal charges are recovered from LIC and Central and State Warehousing Corporations Nomination facility is available. Only one individual can be named as nominee. Nomination is not available in case of joint accounts (viz:e or S, A or S) with survivorship benefit as in case of lockers. In case nomination is not available Safe Deposit Articles may be delivered on affidavit cum indemnity basis. If all the legal heirs do not join in executing the indemnity or if there is a dispute between them, the Bank can insist on suitable legal representation. Indian Succession Act covers only debts & securities. It is not applicable to safe deposit articles or items kept in lockers. Therefore, Safe Deposit articles standing in the name of a deceased depositor can be delivered only against production of a probate or a letter of administration. However, In the states of UP & MP, succession certificate is applicable to Safe deposit articles and safe deposit lockers also. Safe Deposit Lockers RBI has issued revised guidelines on Safe Deposit Lockers/Safe Custody of Articles based on the recommendations of the Committee on Procedures and Performance Audit on Public Services. Relationship of the Banker and the hirer in case of lockers -Licensor & licensee, established by stamped agreement (COS 404). The customer puts his signature in LOCK- ER ACCESS REGISTER when he has to operate the locker. If the locker is in joint names, mandate of the operation should be verified and access to the hirer(s) should be allowed as per mandate. If a notice of revoking of mandate of operation is received, the access should be allowed jointly. The revocation letter may be given by any one of the joint hirers. The Bank has particular Lien & can recover the arrears in rent by sale of the contents after giving adequate notice. Controlling authori- 3

4 ty s prior permission has to be obtained in each case. For the unrented or surrendered lockers, both the keys (custodian key and hirers key) should not be held by the same official. Adequate arrangements should be made for safe and separate custody of both the keys. Multiple Locker facility can be availed by the customer also, subject to the availability of the locker at the Branch. Branches should strictly follow RBI instructions on risk assessment of the customers ((e-cir:645/ dt:01/10/2012),e-cir:655/ dt:04/10/2012. More than ordinary care should be taken while allotting more than one Locker to a customer either singly or jointly..(e-cir:414/ dt:25/07/2013) The officer in charge should check the locker room immediately after the locker hirer has used it to ensure that hirer has not left any valuable belongings outside locker inadvertently and he/she has properly closed the locker door. Locker cannot be allotted to a minor neither as a single nor a joint account with other. Locker can be allotted in the name of blind/visually impaired person(s), literate or illiterate, single or joint operation with other person permitted A locker can also be rented out to a Non Resident Power of Attorney holder can operate the Locker but cannot surrender the locker In case of Joint A/c (E or S), locker can be surrendered and the account closed by both of them only. 7 days notice should be given before closing Locker A/c Lockers to be allotted on first come first serve basis, provided the applicant is eligible for the same and is complying with the KYC norms without insisting for deposits. However To ensure prompt payment of rent, Branch should obtain a STDR from new hirers that would cover 3 years rent and the charges for break open in case of an eventuality. 80% of the lockers to be issued on First come first basis whereas 20% may be issued as per BM s discretion New Clause to be incorporated in Locker Agreement In case the locker remains un-operated for more than one year, the bank would have right to cancel the allotment of the locker and open the locker, even if the rent is paid regularly (for the time being a suitable rubber stamp may be used) (Rationale: To enable the bank to go for break open of non operated lockers for more than one year belonging to the High Risk category customers and 3 years for medium risk category customer after giving a 15 day notice, even though the locker rent has been paid regularly. Further, branch should ask the locker hirer to give in writing, the reasons why he / she did not operate the locker for such a long period. In case the locker-hirer has some genuine reasons as in the case of NRIs or persons who are out of town due to a transferable job etc., branch may allow the locker hirer to continue with the locker).(e-cir:414/ dt:25/07/2013) For New Hirers: Locker rent will be payable in advance up to 31st March of current financial year on pro rata basis together with 12 month rent of the following year and on 2nd April every year thereafter. Registration Charge (one time)- Rs. 843/- should also be charged. Branch should provide a copy of the locker agreement regarding operation of the locker to the locker hirer at the time of allotment of the locker. For Existing hirers: Locker rent will be payable up to next 31st March and on 2nd April every year thereafter. Procedure to be followed in case of nonpayment of rent i)reminder sent on due date if no balance in the A/c ii)if not paid, another reminder after 3 months iii)notice on COS 405 after 6 months iv)notice on COS 406 after 1 year 4

5 v) Controlling authority s approval to be obtained for breaking open the locker vi)locker should be broken open in presence of a committee which may comprise of Notary Public, Bank s Advocate and 5 independent witnesses vii)inventory of contents (Panchnama) to be prepared in presence of witnesses viii)contents to be valued by an approved Govt. Valuer and kept on record ix)contents are kept as a Safe Custody item under joint custody of Joint Custodians Access to the Safe Deposit Lockers/Return of Safe Custody Articles to Survivor(s)/Nominee(s)/Legal heir(s) ( e.cir:511/ dt:22/11/2007) Access to the Safe Deposit Lockers/ Return of Safe Custody Articles (with survivor/nominee clause): (a) When it is reported that the locker hirer is dead, a noting should be made in the locker ledger, key register, systems and on the locker itself. (b) If the sole locker hirer nominates a person, branch should allow access of the locker to such nominee and liberty to remove the contents of the locker in the event of the death of the sole locker hirer. In case the locker was hired jointly with the instructions to operate it under joint signatures and the locker hirers nominate one or more person(s) as nominee(s), in the event of death of any of the locker hirers, the branch should give access of the locker and the liberty to remove the contents jointly to the survivor(s) and the nominee(s). In case the locker was hired jointly with survivorship clause and the hirers instructed that the access of the locker should be given over to 'either or survivor,'anyone or survivor,' 'former or survivor' or according to any other survivorship clause, branch should follow the mandate in the event of the death of one or more of the locker hirers. However, branch should take the following precautions before handling over the contents. Branch should exercise due care and caution in establishing the identity of the survivor(s)/ nominee(s) and the fact of death of the locker hirer by obtaining appropriate documentary evidence. The genuineness of the documents must be ensured. (ii) Branch should make diligent effort to find out if there is any order from a competent court restraining the branch from giving access to the locker of the deceased; and iii) Branch should make it clear to the survivor(s)/nominee(s) that access to locker/safe custody articles is given to them only as a trustee of the legal heirs of the deceased locker hirer i.e. such access given to him/ her shall not affect the right or claim which any person may have against the survivor(s)/nominee(s) to whom the access is given. Similar procedure should be followed for return of articles placed in the safe custody of the branch. Branch should note that the facility of nomination is not available in case of deposit of safe custody articles by more than one person. (c) Branch should note that since the access given to the survivor(s)/nominee(s), subject to the foregoing conditions, would constitute a full discharge of the bank's liability, insistence on production of legal representation is superfluous and unwarranted and only serves to cause avoidable inconvenience to the survivor(s)/nominee(s) and would, therefore, invite serious supervisory disapproval. In such case, therefore, while giving access to the survivor(s)/nominee(s) of the deceased locker hirer/depositor of the safe custody articles, the branch should not insist on production of succession certificate, letter of administration or probate, etc., or obtain any bond of indemnity or surety from the survivor(s)/nominees(s). Access to the Safe Deposit Lockers/ Return of Safe Custody Articles (without survivor/nominee clause): There is an imperative need to avoid inconvenience and undue hardship to legal heir(s) of the locker hirer(s). In case where the deceased locker hirer had not made any nomination or where the joint hirers had not given any mandate that the access may be given to one or more of the survivors by a clear survi- 5

6 vorship clause, following procedure may be adopted. (i) In case of death of a sole locker hirer (where there is no nomination) and there is a valid will, probate may be obtained and access may be given to the executor/administrator. In other cases, access may be given to the legal representative of the deceased. In such cases death certificate and proof of the legal representation should be obtained. (ii) Where there are joint locker hirers and as per the contract of locker hire, the locker is to be operated jointly and there is no nomination, if one of the hirers dies, access may be given to the survivor jointly with the legal heirs of the deceased hirer. In such cases, death certificate and proof of the legal representation should be obtained. (iii) Where there are joint locker hirers having a locker with either or survivor clause (nomination not allowed), access may be given to the survivor in case of death of one of the hirers. In such cases, only death certificate should be obtained. (iv) Where there are joint locker hirers and all the hirers die and where there is no nomination, access may be given jointly to the legal heirs of all the deceased hirers (or the executors/administrator, if appointed).in such cases, death certificate and the proof of legal representation should be obtained. Branch should be guided also by the provisions of Sections 45 ZC to 45 ZF of the Banking Regulation Act, 1949 and the Banking Companies (Nomination) Rules, 1985 and the relevant provisions of Indian Contract Act and Indian Succession Act. Branch should prepare an inventory before returning articles left in safe custody/ before permitting removal of the contents of a Safe Deposit Locker. The inventory shall be prepared in the presence of two officers of the branch and two independent witnesses in the appropriate forms as circumstances require (Specimen copies of the forms are enclosed as Annexures to the circular). In case the nominee(s)/ survivor(s)/ legal heir(s) wishes to continue with the locker, branch may enter into a fresh contract with nominee(s)/ survivor(s)/ legal heir(s) and also adhere to KYC norms in respect of the nominee(s) / legal heir(s). Branch is not required to open sealed/closed packets left with it for safe custody or found in locker while releasing those to the nominee and surviving locker hirer/ depositor of safe custody article. In order to facilitate the identification of Safe Deposit Lockers on the basis of locker keys, branch should arrange to emboss on all locker keys, an identification code which could indicate the bank and the branch providing the locker. Accordingly, the following procedure will be followed: i) In respect of purchase of new locker cabinets for the branch, the supplier of locker cabinets should engrave all the keys of the lockers with abbreviation of State Bank of India and five digit branch code e.g. SBI/00001 as identification code. Fresh locker cabinets should not be purchased without identifications marks engraved on the relative keys. ii) As regards existing hirers/ lockers in use, branch should arrange for sending letters to the existing locker hirers informing them to remain present in the branch premises on predetermined time and date and at the same time requesting the officials of the vendor company of the locker cabinet to depute technician for doing the engraving work. The identification code would be engraved on the locker key in the presence of the locker holder only. Introduction to SDV (Locker) in B@ncs24: The SDV Module covers opening of SDV account, operation of locker, collection of rent and surrender of Lockers. However, Locker Access Register is to be maintained manually. Each SDV is another a/c in CBS. Every Locker Number will be an account in Core. CDC creates and generates an account number for each Locker. The branch will then allot an SDV account number to the locker lessees. The branch has to create cabinets and lockers thereof by using a separate menu- Safe Deposit Vault. Cabinet creation and Locker creation can be done only by officers with user type of 40, 45, 50 or 60. This is a onetime activity. 6

7 If the status of the Locker is Inactive, it cannot be allotted to anybody. When a customer wishes to avail of Locker facility, an SDV account is to be created. Preconditions: CIF Number for the customer should pre-exist in the system. When the customer wishes to convert SDV account as joint account, CIF of joint account holder is to be created if not existing. In the Field Accessing Customer, give the CIF of the customer (s), who is/ are being included as a Joint Account Holder (s). In case of giving access to Power of Attorney Holder, input the CIF of the Power of Attorney Holder in the Field Accessing Customer, under Power of Attorney. The Locker status may have to be changed when the customer wants to discontinue the Locker facility or when he/ she lose the Locker key. The status of locker is changed to Cut open when there is a need to break open the Locker. When the customer surrenders locker, the locker key should be exchanged with an available locker as a security measure. After physically interchanging the keys, the details are entered in the system All Locker keys to be embossed with identification code which could indicate the Bank and Branch which has rented out the locker. (Rationale: To facilitate identification of Safe Deposit Locker on the basis of locker keys by the Income-Tax and other investigating authorities) Keys of vacant and surrendered lockers should be kept with the person other than person holding custodian (master) key Locks of surrendered lockers should be interchanged among the surrendered lockers before allotting to a new hirer.(rationale: To ensure against any attempt by previous locker hirer to try to open/operate the surrendered locker) Search warrant for Locker issued by Income Tax Department should bear Signature of official not below the rank of Commissioner of I.T. of search authority. (Sec 132of I tax act) In case of search, hirer s presence is not a must. He/ She may be invited to witness the search In the lockers hired in joints names, if key is reported lost, the advising letter should be signed by all the hirers.a service charge ofrs..750/-+st has to be recovered from hirer, in addition to the actual expenditure incurred for breaking open the locker and changing the lock by manufacturers of lockers Nomination facility is available under Sec 45 ZE of Safe Deposit Lockers. Only one individual can be named as nominee in case of locker in single name In case of Joint operation without survivorship benefit, each locker holder can nominate a person Nomination is not available in case of joint accounts with survivorship benefit. In case nomination is not available items in Safe Deposit Locker of a deceased person may be delivered to legal heirs on affidavit cum indemnity basis. If all the legal heirs do not join in executing the indemnity or if there is a dispute between them, the Bank can insist on suitable legal representation. Indian Succession Act covers only debts & securities. It is not applicable to articles kept in lockers. Therefore, Safe Deposit Lockers standing in the name of a deceased depositor can be delivered only against production of a probate or a letter of administration. However, in the states of UP & MP, succession certificate is applicable to Safe deposit lockers also. For Latest Service Charge Revised w.e.f (e.cir:1202/ dt:31/12/2015) Registration Charge (one time)- Rs 500/- +ST Annual Rent New Size/ Type: Small:Size A:125 x 175 x 492 Size B:159 x 210 x 492 (Metro & Urban Centres:Rs..1100/-)+ST (Semi-urban & Rural:Rs..800/-)+ST Medium: Size:C:125X352X492; Size:D:189X263X492 Size:E:159x423x492 Size H1:325X210X492 Metro & urban Centres:Rs..2800/-+ST Semi-urban & Rural:Rs..1800/-+ST 7

8 Large: Size:F:278X352X492 Size:G:189X529X492 Size:H:325x423x492 Metro & Urban Centres:Rs..6000/-+ST Semi-urban & Rural:Rs..5000/-+ST Extra large: Size L:404X529X492 Size:L1:385X529X492 Metro & Urban Centres:Rs..8000/-+ST Semi-urban & Rural:Rs..7000/-+ST No.of Locker visits per year: 12 visits free: thereafterrs..100/-+st. per visit to be recovered manually.** Locker Rent Overdue Charges: (TO BE RECOVERED MANUALLY) 1st Quarter 10% of annual rent. 2nd Quarter 25% of annual rent 3rd Quarter 40% of annual rent 1yr 50% of annual rent. For More than 1 Yr-Locker to be broken (overdue period is classified as under: S.I. set up on say, 1 st April, 14 for Advance rental for the financial year , (Overdue of annual rent to be levied on 1 st July,2015/1 st October 2015/1 st January2016 / 1 st April 2016 respectively, if remaining unpaid t that date.) (e.cir:1202/ dt:31/12/2015) Safe custody charges a) Scrips (for each scrip)-rs..150/- +ST per scrip. Min.Rs..300/-+ST p.a. or part thereof b) Sealed cover (for eachcover)-rs..300/-+st per cover p.a. or part thereof. c) Bank s own deposit receipt- Nil Safe deposit articles (To Be Recovered Manually) Rs..600/- +ST one time charge for all kinds of Safe Deposit Articles Additional charge for Envelope (p.a) -Rs..150/- + S.T. Additional charge for Packet:Rs..600/-+ST p.a. Additional charge for Large packet / Box Rs S.T. p.a. (100 cm. max) Beyond thatrs..50/- per. cm.+st In case of loss of key a service charge ofrs..750/-+st is to be recovered from the hirer of the locker in addition to the actual expenditure incurred for breaking open the locker and changing the locker key by the manufacturer of locker. NOMINATION FORM SL 1 (By Sole Hirer of Safety Locker) Nomination under Section 45ZE of the Banking Regulations Act, 1949 and Rule 4(1) of the Banking Companies (Nomination) Rules, 1985 by Sole Hirer in respect of Safety Locker NOMINATION FORM SL 1A (By Joint Hirers of Safety Locker) Nomination under Section 45ZE of the Banking Regulations Act, 1949 and Rule 4(2) of the Banking Companies (Nomination) Rules, 1985 by Joint Hirers in respect of Safety Locker NOMINATION FORM SL 2 (For Cancellation of Nomination of Safety Locker) Cancellation of nomination under Sections 45ZE and 52 of the Banking Regulations Act, 1949 and Rule-4(5) of the Banking Companies (Nomination) Rules, 1985 in respect of Safety Lockers NOMINATION FORM SL 3 (Variation of Nomination by Sole Hirer of Safety Locker) Variation of nomination under Sections 45ZE and 52 of the Banking Regulations Act, 1949 and Rule 4(6) of the Banking Companies (Nomination) Rules, 1985 by Sole Hirer in respect of Safety Locker NOMINATION FORM SL 3A (Variation of Nomination by Joint Hirers of Safety Locker) Variation of nomination under Sections 45ZE and 52 of the Banking Regulations Act, 1949 and Rule 4(7) of the Banking Companies (Nomination) Rules, 1985 by Joint Hirers in respect of Safety Locker. 8