Does The Bank Need A Succession Certificate?

Date : 05 Sep, 2023

Post By admin

Under the Indian Succession Act, a succession certificate is a document that authorizes the person who acquires it to represent the deceased in collecting debts and securities owed to him or payable in his name. Typically, a succession certificate is issued. In the absence of a will, a succession certificate will serve as the primary document. A succession certificate should be obtained by petitioning a magistrate or a high court. In most cases, the court has a separate cell that issues succession certificates.
A succession certificate is often necessary when a person dies and leaves behind specific assets, properties, debts, or securities, and the legal heirs or beneficiaries must show their entitlement to such assets. It is a court-issued legal document that certifies the genuine heirs and beneficiaries of a deceased person's inheritance. The heirs can use the certificate to collect and transfer assets, settle debts, and conduct other related operations.
A succession certificate is governed under the Indian Succession Act, of 1925 in India. It is required when a person dies without leaving a valid will and his or her legal heirs need to show their entitlement to the deceased person's assets, which include bank accounts, securities, debts, and other movable property.

Why Does A Bank Require A Succession Certificate?

The succession certificate ensures against loss of money all persons who are liable to it and responsible for the security of the owner of the succession certificate. For instance, if the dead had a bank loan, documentation may be needed even before the subject is turned over to the legal person.
A succession certificate is presented to the beneficiaries of a deceased individual who died without leaving a will. Along with information about the legal heirs, there is also a list of the assets, obligations, and securities. You can also get your certificate in a variety of other regional languages in addition to Hindi. If, however, authorities are unable to locate such a location, jurisdiction is moved to a location where they may discover the deceased's assets. This kind of certificate must be obtained for 3% of the total property value.
The District Judge of the relevant district issues a succession certificate to the heirs of a deceased person. A succession certificate is helpful in various situations. If a person who has passed away made a loan to a business or an individual, borrowers may ask the heirs for documentation. The heirs in this case will demand a court order stating that they are eligible to claim their inheritance.

Yes, banks frequently need a succession certificate when transferring assets, notably bank accounts, held by a deceased person to their rightful heirs in India. Why banks often ask for a succession certificate is as follows:

☑️ Lawful Verification: Banks must make sure that they are transferring assets to the dead account holder's legitimate heirs in a lawful manner. A succession certificate acts as official documentation of the heir's claim to the property.
☑️ Risk reduction: Banks work to reduce the possibility of legal disputes and conflicting claims. They guarantee that the transfer procedure complies with legal criteria by demanding a succession certificate.
☑️ Lawfulness: Banks must abide by all applicable laws and rules in India. Banks can make sure they adhere to the law when transferring assets by requiring a succession certificate.
☑️ Asset Protection: Banks must safeguard the assets of their clients and make sure they are distributing those assets to the right legal heirs. A succession certificate aids in establishing the legitimacy of the legitimate heirs.
☑️ Account Closure and Liability Settlement: Banks utilize succession certificates to make it easier to close off the accounts of deceased account holders and clear their debts.
☑️ Preventing Fraud: Obtaining a succession certificate is necessary when transferring assets following a person's passing in order to avoid fraud or deception.

How To Obtain A Succession Certificate For A Bank Account In India?

One can easily get a succession certificate using these simple steps:

☑️ Eligibility and Documentation: Confirm that you are eligible to apply for a succession certificate as a legal heir. Gather the necessary documents, including the death certificate of the account holder, your relationship proof with the deceased, and details of the bank account.
☑️ Prepare the Application: Draft an application for a succession certificate specifically for the bank account. The format may vary slightly depending on the bank's requirements and the state where the bank is located.
☑️ Filing the Application: Submit the application to the appropriate civil court in the jurisdiction where the bank is located. Pay the required court fee, which is often based on the value of the assets in the bank account.
☑️ Notice to Interested Parties: The court will issue notices to legal heirs and other interested parties, allowing them to contest the issuance of the succession certificate.
☑️ Court Proceedings: Attend court hearings as scheduled and present all necessary documents and evidence to support your claim.
☑️ Court Decision: The court will review all evidence and objections and make a decision regarding the issuance of the succession certificate for the bank account.
☑️ Issuance of Succession Certificate: If the court approves your application, it will issue a succession certificate specifically for the bank account, indicating your legal entitlement to access and manage the funds.
☑️ Bank Notification and Asset Transfer: Present the succession certificate to the bank where the account is held. The bank will then transfer the funds to your name as the legal heir, and you will have the authority to manage the account.

Conclusion:

The particular requirements and procedures for getting a succession certificate may differ from one bank to the next and may also rely on the state in which the bank is located, it is crucial to remember. In order to transfer assets to lawful heirs, it is, therefore, advisable to get in touch with the bank where the deceased person's account was located and find out about their special policies and documentation needs. Making efficient use of this procedure may also benefit from seeking advice from a legal professional or advocate.