Inhuman action by banks on death of customer
Banks promise payment of a monthly return on term deposits to meet monthly expenses of customer, with the right to receive the capital intact at maturity else on death heirs to have the same right over capital funds.
However, on the death of a customer some banks consider death a premature withdrawal and do not allow deposits continued by the heirs/beneficiaries till maturity. The banks that doesn’t allow the deposit continued till maturity claim part of the monthly interest paid on term deposit as they rework interest at savings rate from the time deposit was placed.
The net result is that heirs/beneficiaries lose a fair share of capital as a result of bank claiming interest calculating at a far lesser rate in comparison to the rate paid to the customer.
At a recent inquiry the NSB has informed that in the absence of internal circular instructions the branch is compelled to close the accounts and calculate interest at savings rate for the whole period of the deposit held and deduct excess interest paid from the capital.
This obnoxious practice drastically varies within the branches of the same bank and also among different financial institutions. The calculation certainly benefits the bank and customer will be the end loser.
Banks and financial institutions promote long term deposits but in the absence of clear instructions a larger portion of the capital sum deposited is held back by those financial institutions. The loss is material for long term deposits when death happens closer to maturity. The worst affected are the senior citizens who are duped by banks with high interest rates sans at the end all frills vanish.
The Central Bank (CB) has excluded guidelines in the customer charter to state that on request to enable the heirs/beneficiaries maintain deposit till maturity or other options especially where present term deposit held is over six months.
We appeal to the CB Governor to strengthen the banker- customer relationship through the customer charter.
A. Weerasekera   Hendala Â