RBI: As per the current notification issued by the Reserve Bank of India, central bank has asked banks not to demand signature of both the depositors for the withdrawal of money in case of joint fixed deposit account. As this kind of mandate causes unreasonable delay and causes inconvenience to account holders.
So central bank has issued a notice to all the banks with the instruction that if term deposit accounts are opened with operating instructions ‘Either or Survivor’ or ‘Former or Survivor’, banks should not demand signatures of both the depositors for making payment of the amount of the deposit on maturity. Which means, on maturity consent of both the account holders is not mandatory so any one account holder can make the withdrawal.
But in other cases like pre mature withdrawal of fixed deposit i.e withdrawal before maturity, bank should demand signature of both the account holders. Joint account holders can specifically mention to the bank to allow them to make pre-mature withdrawal of term deposit with signatures of any one account holder.
Likewise, if in case of death of one of the depositor before the maturity of the term deposit, banks should not allow pre mature withdrawal of money without the consent of the legal heirs of the deceased joint holder. However, the survivor can make the withdraw on maturity.
To summarize the whole story, central bank instruct banks not to demand consent of both the account holders for the withdrawal of funds after maturity of the term deposit. Only pre-mature withdrawal or death of one account holder (before maturity) should demand consent from the other account holder or legal heir. Even in case of death of one account holder before maturity of fixed deposit, other can make the withdrawal on maturity without the consent of legal heir of the deceased account holder.