Tata AMC’s Venugopal moves on

Bhupinder Sethi, co-head equities, will replace Venugopal Manghat and will be head-equities

Tata Asset Management has announced that Venugopal Manghat, co-head equities has left the organization to pursue other career opportunities.

Sanjay Sachdev, President and CEO of Tata Asset Management while commenting on this said,” We value Mr Venugopal’s contributions to the growth of Tata Asset Management. We wish him the very best in his future endeavours.”

Bhupinder Sethi currently, co-head equities, will be now head-equities.


Rally to continue: Tuesday Closing Report

Nifty may see further gains up to 4,950

The market closed with gains of over 2% on encouraging domestic economic news and global support. In our yesterday’s closing report, we had mentioned that the Nifty will move in the range of 4,705 and 4,765 with an upward bias with the next resistance at 4,835. The benchmark broke that resistance on a huge volume of 72.08 crore shares on the National Stock Exchange (NSE), the largest in the past 29 days (including today). The Nifty closed at its 23-day closing high (including today) at 4,850. From here we may see the index going up to the level of 4,950. However, if the benchmark falls below 4,810, we may see a reversal setting in.

Taking support from positive economic news on the domestic front and firm global cues, the local market started the day in the green. The Nifty opened at 4,772, up 29 points, and the Sensex gained 83 point to resume trade at 15,898. While the opening figure of the Sensex was its intraday low, the Nifty dipped marginally to 4,768 at its low. However, all-round buying support, led by PSU, banking and oil & gas stocks kept up the momentum.

Domestic passenger car sales jumped by 8.49% to 1,59,325 units in December 2011, according to the data released by the Society of Indian Automobile Manufacturers.  Auto stocks like Mahindra & Mahindra, Ashok Leyland, Tata Motors, Hero MotoCorp, Maruti Suzuki and Bajaj Auto were all in the green following the announcement.

The market continued it northward journey as a positive opening of the key European indices supported investment sentiment in noon trade.

Global rating agency Moody’s upgrade of India’s short-term foreign currency rating from speculative to investment grade will help Indian companies raise funds from abroad at better rates.

The market hit the day’s high in the last half hour with the Nifty touching 4,856 and the Sensex scaling 16,181. Paring a small part of the gains, the market closed near the highs. The Nifty finished 107 points higher at 4,580 and the Sensex ended the day at 16,165, a jump of 350 points.

The advance-decline ratio on the NSE was a handsome 1450:296.

The broader indices were equally participative in today’s rally with the BSE Mid-cap index surged 2.24% and the BSE Small-cap index jumped 2.63%.

The sectoral space was led by BSE Realty (up 4.20%); BSE Capital Goods (up 3.56%); BSE Bankex (up 3.17%); BSE Metal (up 2.96%) and BSE Auto (up 2.91%). There were no losers today.

Mahindra & Mahindra (up 5.63%); Hindalco Industries (up 4.28%); Larsen & Toubro (up 4.24%); Jindal Steel (up 4.12%) and Reliance Industries (up 3.99%) topped the Sensex. TCS (down 0.41%) and GAIL India (down 0.16%) were the only losers.

The major gainers on the Nifty were Reliance Power (up 5.60%); Punjab National Bank (up 5.18%); M&M (up 5.08%); Reliance Infrastructure (up 4.76%) and Hindalco Industries (up 4.41%). The losers were Ranbaxy (down 0.89%); TCS (down 0.29%) and Ambuja Cement (down 0.10%).

Markets in Asia settled higher, taking support from overnight gains in US stocks. News from Europe that French president Nicholas Sarkozy received support from German chancellor Angela Merkel for a tax on financial transactions, also supported the rally. Within Asia, the Chinese stock market regulator said that it would initiate reforms to clean up public offers and delistings and boost bond issuances. This apart, slowing exports gave rise to speculations that the Chinese central bank might ease lending restrictions.

The Shanghai Composite surged 2.69%; the Hang Seng gained 0.73%; the Jakarta Composite climbed 1.28%; the KLSE Composite added 0.02%; the Nikkei 225 rose 0.38%; the Seoul Composite advanced 1.26% and the Taiwan Weighted settled 1.21% higher. At the time of writing, the key European indices were trading with gains of over 1% to 2% and the US stock futures were in the positive.

Back home, foreign institutional investors were net sellers of stocks totalling Rs36.46 crore on Monday while domestic institutional investors were net buyers of shares amounting to Rs29.26 crore.

PSL has received an order valuing over Rs280 crore from infrastructure major Pratibha Industries for supply of coated pipes for Gujarat Water Industries’ NC 30 project. The order envisages manufacture and supply of coated steel pipes as required for the project. PSL soared 11.46% to close at Rs60.30 on the NSE today.

Drug major Wockhardt today said it has received final approval from the US health regulator to market generic Fluticasone nasal spray, used for treating allergic nasal inflammation, in the American market. Fluticasone nasal spray is the generic name for GlaxoSmithKline's Flonase. According to IMS Health, the total market for the product in the US is about $580 million and there are only three other generic versions of the product in the United States. Wockhardt gained 2.61% to close at Rs304.30 on the NSE.

Chennai-based two-wheeler maker TVS Motor Company on Tuesday announced to re-launch its one of the best selling motorcycles ‘Victor’ in India in December, besides introducing three more products in 2012. The company that has earmarked a capex of Rs 125 crore for 2012-13 is also mulling to increase its overall production capacity to about 32 lakh units annually by 2013-14. The stock settled at Rs48.15 on the NSE, a gain of 2.88% over its previous close.


Unclaimed fixed deposits might be harder to claim than you thought

Here is a real-life story of legal heirs of a deceased, who successfully managed to claim a matured fixed deposit along with compound interest after 15 years

What happens when someone, in absence of a nominee, dies before the fixed deposit is matured? Most of the times, the legal heirs are clueless as to what assets the deceased held and the process to deal with claiming the same from financial institutions. One of our readers brought to us an interesting case.

A family had found out about the deceased assets, in this case—a fixed deposit (FD) with Syndicate Bank, only after 15 years, while combing through the last remnants of a trunk left in their attic. This situation is quite common not just in India but all over the world.

So what happens to the fixed deposit in such a case?

The simple case would be that the assets would be transferred to the nominee. However, we learn that, in the 1970s, nomination facilities weren’t readily available. In fact, one had to ask for it. Thus the deceased was probably not aware of such a facility. Moreover, the family wasn’t aware that the deceased held a FD.

Usually, Syndicate Bank would have to notify the depositor, whether alive or dead, on the maturity of the FD. In some cases, these letters go unnoticed as there may not be anyone residing after death and the relatives might be living elsewhere.

We found out that according to RBI: “If the letters are returned undelivered, they may immediately be put on enquiry to find out the whereabouts of customers or their legal heirs in case they are deceased.”

Therefore, if the bank does not hear from the depositor for a period of time, it must use whatever methods at disposal to track down its legal heirs.

When this family found out about the existence of the FD, they approached Syndicate Bank in order to claim the FD, along with stipulated interests. However, the family was “bullied” by the Bank for not taking measures to claim the FD at time of death of the depositor. What was surprising was that the deceased lived one floor below Syndicate Bank’s office! The Bank might have been aware of the death of the depositor, but had not bothered to track and inform the legal heirs of the same. Instead, they had virtually used the depositor’s FD for “free”.

This isn’t the only peculiarity with FDs and death before its maturity. We learn that there’s another issue—the question of how much the legal heirs are entitled to the interests and FDs.

According to Syndicate Bank: “....In the case of death of the depositor after the date of maturity of the deposit, the bank shall pay interest at savings deposit rate obtaining on the date of maturity from the date of maturity till the date of payment.”

The logic in this case is that the fixed deposits had matured when depositor died, and thus Time Deposit had become Demand Deposit (i.e. savings bank). Therefore, if the FD is not claimed within due time, it will be converted to a savings bank account and only the savings rate would apply henceforth.

However, it is different in case the depositor dies before maturity, as in this case, “In the event of death of the depositor before the date of maturity of deposit and amount of the deposit is claimed after the date of maturity, the Bank shall pay interest at the contracted rate till the date of maturity. From the date of maturity to the date of payment, the Bank shall pay simple interest at the applicable rate obtaining on the date of maturity, for the period for which the deposit remained with the Bank beyond the date of maturity; as per the Bank's policy in this regard.”

The key word here is “simple interest at the applicable rate”. What does the simple interest means? Is it savings rate? Or a rate decided by the bank without the knowledge of the depositor’s legal heirs? The wording used here gives the bank the freedom to choose whatever rate it prefers, which will be usually less than the contracted rate.

Syndicate Bank had offered the legal heirs savings rate instead of the contracted rate, thus trying to fleece its customers.

What do we learn from this episode?

Simple, customers are taken for granted by the banks. Most of the times, the customers are short-changed without their knowledge, even in the simplest of cases. In this case, the Bank failed to take cognizance the fact that the FD was taken in the 1970s, where rules and banking practices were different then. It is the bank’s duty and responsibility to ensure that common sense be applied to cases such as these and adapt it accordingly within the framework today in such a manner that is fair to the legal heirs.

Also, there ought to be a solution to communicate better to the legal heirs of the deceased, which would not only make the bank’s job of tracking down legal heirs much easier, but also serve customers better. While the employees of Syndicate Bank in the 1970s and 1980s may have failed in their duties, the bank had no right to bully the legal heirs because of some lapse of its own employees many years ago.

Fortunately, despite all this, we learn that the legal heirs have managed to obtain a succession certificate as well as a court order stating that Syndicate Bank must pay compound interest at the contracted rate, but only after a lot of hard work done by them.



Shibaji Dash

5 years ago

A correction in the 1st line of my comments day ago. It should read as : a nominee may or may not be a legal heir.

Nagesh Kini FCA

5 years ago

I entirely agree with Shibaji Dash, the Ministries of Finance and Consumer affairs need to come out with clear cut directions now that they are talking of inclusive banking going into rural India in a big way.

Shibaji Dash

5 years ago

With all respect for Mr. Vinay Joshi, may I further add that the logic of caveat emptor ( buyer be aware) ought not to apply to the depositor-nominee issue.With increasing penetration of banking to rural areas, a more responsible, responsive and a real pro-active role is warranted for the Govt. and the Regulator.

Shibaji Dash

5 years ago

With reference to comments of Mr. Vinay Joshi: it's trite to point out that a nominee is not a legal heir.Mr. Joshi is perhaps have in mind the ruling of the Supreme Court in this regard in 2011.Point I made is law/regulations must be dynamic to address the newly emerging problems and hence efforts must be on to make Succession Act and nomination Regulations converge to make nomination harassment -proof.Alas, with a Govt. that legalizes fudging of bank loans, legal professionals who are greedy for expanding areas of disputes and, finally with increasing spread of regulation illiteracy among bank officials, depositor citizens are doomed to suffer.

arun adalja

5 years ago

bank is responsible to pay the matured amount to nominee if depositor dies and bank must do all efforts to find out the whereabouts of depositor it is the social responsibility of bank and effors must be notified to rbi.today many crores rupees are lying with the company for unclaimed dividend from the share holders as companies are not intimating shareholders everyyear so the thing is accumulated and finally it goes to fund from where you cannot claim we must find out some mechanism to this issue.

R Nandy

5 years ago

As a single account holder in a couple of private bank I had to
face some difficulty while getting my FD's nominated. Both the banks
insisted on 2 witness signatures for accepting the nomination. I had to
send them a copy of the RBI circular in this regard(which makes it
unnecessary to give signature of 2 witnesses) and get the nominations
registered. Incidentally I was not nominating earlier due to financial
illiteracy. I was surprised that even many bank officials are ignorant
of the latest nomination rules. Nor has the banks updated the DA1-DA3
forms based on the new rules(no witness signature) of nomination.

a v moorthi besides TIHAR

5 years ago

The banks are required to submit to the Reserve Bank, a return in Form VIII showing unclaimed deposit accounts in India which have not been operated upon for 10 years or more, as at the end of each calendar year. A separate folio may be opened in the register for different types of deposit accounts.unclaimed deposits Term Deposits lying with them beyond 10 years from date of maturity to their head office who in turn deposits it to RBI. ML should find out whether this happened in this particular case if otherwise it is clear systems are on paper only there is no monitoring of such process by annual inspection, concurrent auditors if the branch is provided with one, RBI inspection at H.O. whether bank is reporting unclaimed deposits and lastly when balance sheets are signed by CAs (balance sheets auditors) are they looking into such provisions and whether they are being followed.

Vinay Joshi

5 years ago


Consumer is the king! Appreciate the subject put forth.

Similarly [a relative case] Indian Post office [deposits] in dock for being indifferent.

They were asked [dept indicted] by the consumer court to pay up for keeping widow in dark in Jt.A/C case.

Subject matter : A joint deposit cannot be treated as an individual deposit after the death of one of the joint holder.—Read-

Two joint a/cs established in Post Office under MIS, 420K first holder with wife as joint holder. Second 180K with wife as first holder, opener second jt.

First 420K holder – expires during the subsistence of the scheme. The joint. holder wife approached the postal authorities for legal changes, was advised by the officers not necessary as deposits were payable ‘either or’ & death to be registered at the time of maturity of the deposits.

On maturity of the deposits wife was told that investment limits were 300k for individuals & 600k joint [as at the time of investment fulfilling.] but the death now amounts to individual deposit[s].

Further she was told that she has violated prescribed limits. Hence no bonus, excess deposit interest reversed, plus penalty to be adjusted & deducted from the maturity value of the deposits.

The Consumer court judgment Dt, Dec 2,2011 noted the deceased’s wife, the joint holder had approached the postal authorities, irrelevant advise given.

The postal authorities were made liable, total payout, 9% interest plus 5k costs.

The post rule -- Rule 20, --- ‘ when the death of a joint holder is reported, the post master has to instruct the surviving depositor to withdraw the amount in excess of single name deposit limit.

[By Jehangir B.Gal.]


Nagesh Kini FCA

5 years ago

The mandated KYC compliance ought to include Nominee particulars in addition to identity and residence proof, at the account opening stage itself to mitigate hardships later.
The BCSBI should lay down in clear terms the rate of interest on unclaimed deposits. After all the banks are making use of the depositors to lend out and earn interest. So it has to be interest compounded at the contracted rate.
As a part of Customer Service once a while the banks ought to track down on the unclaimed deposits more particularly to track down heirs.


Vinay Joshi

In Reply to Nagesh Kini FCA 5 years ago

Dear Mr. Nagesh Kini, FCA,

Under the Banking Regulation Act or RBI or standard banking aspects – why BANK’s should trace legal heirs? Who is the bank ?

They are mandated to deal with the deposits & accounts held as per the banking regulations. That’s all.

Is nominee a legal heir? In which manner can bank’s mitigate hardships?

Nomination has different meanings under diff acts which I need not tell you, viz, Co’s Act, debts act, insurance, EPF, banks, coop soc,

But some acts provide for nomination ‘expressly overriding’ succession laws. [not banking regulation of 1949.] & the rights are to the “exclusion of all persons”.

As a part of customer service HDFC will levy charges for inoperative a/cs or un-deliverable courier.


Who earns? Who earned earlier in telcom imbroglio?

Why today PwC is sued upon? [partners.]


nagesh kini

In Reply to Vinay Joshi 5 years ago

You don't have to teach a RBI empaneled bank auditor now turned activist that "the banks are mandated to deal with deposits and accounts". The banks do make use of the depositors' funds lying in Unclaimed Deposits to make Advances and earn interest. Consequently they owe interest to these depositors.
That the advances go to become NPAs and law firms are making money is irrelevant. Don't mix issues.

Vinay Joshi

In Reply to nagesh kini 5 years ago

Dear Mr.Nagesh Kini, FCA

Oh! RBI empaneled! Earlier you were Insurance!

In which year you were empaneled? What audit highlighted?
What activist are you? Can you highlight? One single! This is my challenge!

Oh! Panelist auditor, may I respectfully ask from you - what are the RBI provisions for unclaimed deposits? What is the definition of ‘unclaimed’? What should the banks do?

Is there such segregation of funds? Mr. Auditor answer! If at all you can, which you never can! Will not!

Mr. Nagesh Kini, FCA , activist [no auditor now], - ‘EXPLAIN UNCLAIMED DEPOSITS TO MAKE ADVANCES’ – your statement - such advances become NPA’s – your statement!

Mr. Nagesh Kini, FCA, -- what is the percentage of unclaimed deposits? How much is NPA’s?

What is the total bank’s lending?

ICAI, [FCA] member’s comments I honour but not ridicule it out of respect to the institute.


Shibaji Dash

5 years ago

RBI must make it mandatory that the depositor must nominate at least one nominee and two at the option of the depositor and such nomination must be the pre-conditions for making the FD. The existing law of nomination read with the relevant provisions of the Indian Succession Act urgently requires a fresh look by the Govt.to spare the deceased's heirs from the agony and expenses for a probate that takes years to obtain from the court. Moneylife deserves all cudos for the efforts its team is making in increasing awareness among the people about the benefits of making a Will.


Vinay Joshi

In Reply to Shibaji Dash 5 years ago

Mr.Shibaji Dash,

Nominee[s] is/are not legal heir[s].

So Govt. need not look into anything.

Why people across board do not hold in joint names esp; bank - 'either or survivor'?

In seventies also the bank FD form did contain nomination clause, unlike stated by MLD. More soever the SB A/c was the only route apart from CA.


K Sanjay Singh

5 years ago

No doubt,legal heirs faced a lot of hardship in that case. If seen from other angle,it was the depositor who didnot adequate care by not informing his family members. why should the bank pay interest and why shouldnot the bank be compensated for safekeeping the money beyond its obligation ?


Gopinath Prabhu

In Reply to K Sanjay Singh 5 years ago


Bank has to pay because

1. It has made use of the money
2. It has not fulfilled its responsibility to informing the legal heirs despite knowing its sitting on Unclaimed FDs.

Ashok Visvanathan

5 years ago

What you have described is for Bank Deposits. In the case of Company Fixed Deposit, no interest is payable after maturity, even 16 years later.


5 years ago

even i have to share an experience abt Syndicate Bank. I have taken a housing loan with the bank. i used to pay more than my EMI regularly. But it was noticed later that the bank was charging me interest on the balance amt- the actual EMI, and not on the amt paid. when i brought it to their notice, at first they shrugged it off saying it was i at fault by paying extra amt, inspite of their being no prepayment charges. but finally they credited my A/c wth the extra amt after a lot of correspondence

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