Mother nominated son in her savings bank a/c, but both died, father faced long delay in getting funds; Consumer Commission orders Rs 10,000 compensation

It is usually recommended to have a nominee for a bank account, so that when the account holder passes away, the bank can give the money to the nominee to be distributed among legal heirs. But what happens if the account holder and the nominee both die? In such situations, the surviving family member needs a legal heir certificate and other legal documents. While the process has become easier over time, a recent incident in Ernakulam, Keralam, shows how the common man still faces delays and challenges in these cases.

Mrs Radha from Rayamangalam had Rs 62,541 in her savings account at the Bank of India, Kuruppampady Branch, with her son Visaradan listed as the nominee. Tragically, both Radha and her son Visaradan passed away. The only surviving member in her family was her 83-year-old husband, Mr Govindan, a farmer who isn’t veru familiar with English.

So Govindan went to the bank to find out how he could access the funds in his late wife’s savings account. The bank informed him about the required documents. Govindan provided the bank with the relationship certificates and the death certificates. On August 5, 2023, Govindan submitted the legal heir certificate which the bank insisted upon. However, the payment was deferred as the branch manager told him that they needed to seek a legal opinion on this matter.


Also read: Your nominee died before you? Here's what happens to your money next

After a few days, when nothing happened, Govindan sent a registered letter on August 18, 2023. A few days later, the bank told him that they need more documents. Accordingly, Govindan submitted the documents and on September 4, 2023, the money was credited to his bank account.

Despite this, Govindan filed a consumer complaint against the bank, claiming unnecessary delays, repeated trips to the bank, financial hardship and mental agony that he suffered due to the long delay on the part of the bank.

Advocate Kiran Peter Kuriakose from Kadavanthra, Ernakulam, represented Govindan before the consumer commission.

The consumer commission said that banks are expected to be customer friendly and if someone does not understand English then the bank should communicate using regional language so that the person understands what’s happening. In this case, Govindan, a farmer with not much knowledge of law or English language, did what he could, but the bank’s hyper technical approach was criticised by the Consumer Commission.

The consumer commission also cited the RBI’s 2005 charter and said that bank communications with customers must happen in either English, Hindi or the regional language.

President D.B. Binu and Members V. Ramachandran and Sreevidhia T.N., of the Ernakulam consumer commission observed that the Reserve Bank of India in its many communications has emphasised simplified and hassle-free settlement of such claims and the availability of relevant forms and materials in English, Hindi and the concerned regional language.

On August 31, 2026, Govindan won the case. The Ernakulam consumer commission ordered the bank to pay him Rs 10,000 compensation and Rs 5,000 as litigation expenses.

Also read: How to add a nominee to your SBI savings account, fixed deposits (FD)

How did Govindan win the case in Ernakulam Consumer Commission?

Abhishek Bagga, Associate Partner at King Stubb & Kasiva, said to ET Wealth Online that Govindan won the case because the Consumer Commission found that the bank had failed to handle his claim for his deceased wife’s savings account with the diligence and transparency expected from a regulated banking institution.

Although the bank was justified in verifying his entitlement after the nominee, their son, had also died, it failed to establish that the delay was caused by an allegedly unsigned application. The bank did not produce the application, acknowledgement, inward record or any contemporaneous communication requiring him to rectify the alleged defect.

Bagga says that the Consumer Commission also noted that, as an elderly claimant (Govindan) was unable to understand English, he was entitled to have procedural requirements explained in a language he understood. He had to make repeated visits and representations before the money was released.

In light of the RBI’s simplified procedures for deceased-depositor claims, the Consumer Commission held that the bank’s conduct amounted to a deficiency in service, causing avoidable inconvenience, hardship and mental agony.

Ernakulam Consumer Commission discussion

Bank relied on the defence that Govindan gave wrong documents yet failed to prove it

The bank’s central defence is that when Govindan visited the branch in May 2023 and submitted an application for transfer of the amount, the application was not signed by him.

The consumer commission observed that Govindan is an elderly farmer who approached the bank seeking release of the relatively modest amount lying in the savings account of his deceased wife. The nominee named in the account, namely their son, had also predeceased the account holder.

The consumer commission said that the bank was justified in ensuring the identity and rights of those claiming the deposit were verified.

The consumer commission said: “Prudential verification by a bank cannot by itself be characterised as deficiency in service.”

However, at the same time, legitimate verification cannot become a justification for an opaque, undocumented or unnecessarily burdensome procedure.

The consumer commission said that a bank dealing with the legal heirs of a deceased customer has a corresponding obligation to communicate the requirements clearly, furnish the prescribed forms, identify deficiencies promptly and facilitate completion of the claim within a reasonable period.

However, the bank failed to produce the unsigned application which the consumer commission held to be a crucial missing evidence and something which affected the credibility of the bank’s defence.

Bank cannot go hyper technical in such cases

The consumer commission observed that a bank dealing with an elderly claimant cannot merely point to a technical defect and remain passive. It is expected to identify the defect, communicate it intelligibly and facilitate its rectification.

The consumer commission cited that the Reserve Bank of India Circular dated June 9, 2005, dealing with settlement of claims in respect of deceased depositors, was issued precisely to simplify the procedure and minimise hardship to survivors and legal heirs. The regulatory emphasis is on avoiding unnecessary inconvenience to ordinary citizens.

The consumer commission observed that the bank placed its defence on procedural omissions yet failed to prove it. The bank has not established through reliable contemporaneous material what precise documents or formalities were explained to him when he first approached the branch, whether the required claim form was supplied, whether an itemised checklist was given, or whether the alleged defect in the application was communicated.