DOMESTIC DEPOSIT POLICY 2014- 15 - Bank of Baroda9 rate of interest 17 9.1 calculation of interest 17 9.2 payment of interest on term deposits maturing on holidays 17 9.3 rounding

INDEX

DOMESTIC DEPOSIT POLICY 2014- 15

POINT NO. SUBJECT PAGE NO.

1 PREAMBLE 1

2 TYPES OF DEPOSIT ACCOUNTS 1

2.1.1 DEMAND DEPOSITS 1

2.1.2 SAVING DEPOSITS 1

2.1.3. CURRENT ACCOUNTS 1

2.1.4 OVERDUE TERM DEPOSITS 2

2.2 TIME DEPOSITS 2

3 ACCOUNT OPENING AND OPERATION OF DEPOSIT ACCOUNTS 2

3.1 OPENING OF ACCOUNTS 2

3.2 SMALL DEPOSITS 3

3.3 ZERO BALANCE ACCOUNTS 4

3.4 BASIC SAVINGS BANK ACCOUNT 4

3.5 MINIMUM BALANCE 4

3.6 CASH WITHDRAWAL AT NON BASE BRANCHES 5

4 WHO CAN OPEN THE ACCOUNTS 5

4.1 EXTRA PRECAUTIONS TO BE TAKEN IN OPENING OF TYPES OF ACCOUNTS

6

A TRUST ACCOUNTS 6

B NON FACE TO FACE CUSTOMERS 6

C CORRESPONDENT BANKING 6

D FIDUCIARY ACCOUNTS 6

4.2 KYC REQUIREMENTS AND FACILITATING OPENING / OPERATION OF ACCOUNTS OF THE BANK CUSTOMERS

6

4.2.1 OPENING OF ACCOUNTS BY CLOSE RELATIVE SUCH AS PARENTS, SON, DAUGHTER, SPOUSE ETC.

7

4.2.2 FULL OPERATIONAL FACILITIES IN JOINT ACCOUNTS WITH SPOUSE STAYING AT SEPARATE STATION

7

4.2.3 ACCOUNT PORTABILITY / OPENING OF NEW BANK ACCOUNTS 7

4.2.4 ACCOUNTS OF MIGRATORY WORKERS 8

4.3 CUSTOMER IDENTIFICATION PROCEDURE 8

4.3.1 INFORMATION COLLECTED AT OUTSET FOR CUSTOMER IDENTIFICATION PURPOSE TO INCLUDE

8

4.3.2 KYC DOCUMENTATION FOR DIFFERENT TYPES OF LIABILITY ACCOUNTS

9

4.4 BRANCHES TO SEND THANKS / WELCOME LETTERS TO ALL THE NEW CUSTOMERS AFTER OPENING OF ACCOUNT TO COMPLY WITH KYC NORMS

9

4.5 NON INSISTANCE FOR INTRODUCTION 9

5 TYPES OF ACCOUNTS OTHER THAN USUAL DEMAND AND TIME DEPOSITS

9

5.1 MINORS ACCOUNTS 9

5.2.1 OPENING OF ACCOUNTS OF SALARIED PERSONS 10

5.2.2 OPENING OF CORPORATE SALARY ACCOUNTS 10

5.2.3 OPENING OF ‘ZERO BALANCE’ BASIC ACCOUNTS OF THE STUDENTS

10

5.2.4 OPENING OF BANK ACCOUNTS OF FOREIGN STUDENTS 11

5.3 OPENING OF SAVINGS ACCOUNT JOINTLY WITH NRI 11

5.4 ACCOUNT OF LITERATE / BLIND ACCOUNT 12

5.5 ACCOUNT OF VISUALLY IMPAIRED PERSONS 12

5.6 OPENING OF BANK ACCOUNT OF A PERSON WHO HAS LOST BOTH HIS / HER HANDS AND COULD NOT SIGNED THE CHEQUE / WITHDRAWAL FORM

12

5.7 OPENING OF ACCOUNT OF DISABLE PERSONS WITH AUTISM, CEREBRAL PALSY, MENTAL RETARDATION AND MULTIPLE DISABILITIES

12

5.8 ACCOUNT OF MARRIED WOMAN 13

5.9 OPENING OF ACCOUNT OF MINORITY COMMUNITIES 13

5.10 OPENING OF CURRENT ACCOUNTS - NEED FOR DISCIPLINE 13

6 NOMINATION 14

6.1 NOMINATION FACILITY FOR DEPOSITORS 14

6.2 NOMINATION IN CASE OF JOINT DEPOSIT ACCOUNT 15

7 DUE DILIGENCE 15

7.1 PERMANENT ACCOUNT NUMBER (PAN) OR GENERAL INDEX REGISTER (GIR)

15

7.2 REFUSAL TO OPEN AN ACCOUNT 15

8 TYPE OF MANDATE IN JOINT ACCOUNTS 16

8.1 EITHER OR SURVIVOR 16

8.2 ANY ONE OR SURVIVOR/S 16

8.3 MANDATE FOR TERM DEPOSITS 16

8.4 POWER OF ATTORNEY 16

9 RATE OF INTEREST 17

9.1 CALCULATION OF INTEREST 17

9.2 PAYMENT OF INTEREST ON TERM DEPOSITS MATURING ON HOLIDAYS

17

9.3 ROUNDING OF TRANSACTIONS 17

9.4 PAYMENT OF INTEREST TO SENIOR CITIZENS 17

9.5 INTEREST RATES FOR STAFF MEMBERS AND EX- STAFF MEMBERS

18

9.6 CATEGORIES OF STAFF ELIGIBLE FOR BENEFITS 18

9.7 INTEREST RATE ON DEPOSITS FOR CHAIRMAN AND MANAGING DIRECTOR AND EXECUTIVE DIRECTOR

19

9.8 INTEREST RATE ON CURRENT ACCOUNTS MAINTAINED BY REGIONAL RURAL BANKS

19

9.9 MICR CODE AND IFSC CODE 19

10 ISSUE OF CHEQUE BOOK 19

10.1 IN PERSON 20

10.2 TO PERSON OTHER THAN CUSTOMER 20

10.3 TO CUSTOMER BY POST 20

10.4 STATEMENTS OF ACCOUNT AND PASS BOOKS 20

11 OPRERATION IN ACCOUNTS OTHER THAN USUAL DEMAND AND TIME DEPOSIT

21

11.1 TYPE OF SICK / OLD / INCAPACITATED ACCOUNT HOLDERS 21

11.2 FACILITY TO SICK / OLD / INCAPACITATED NON PERSON ACCOUNT HOLDERS

21

11.3 DISHONOUR / RETURN OF CHEQUES 21

11.4 DISHONOUR OF ELECTRONIC FUND, TRANSFER FOR INSUFFICIENT FUNDS

22

12 DEALING WITH INCIDENCE OF FREQUENT DISHONOUR 22

13 WRITING OF CHEQUES IN ANY LANGUAGE 23

14 SWITCHING BANKS BY CUSTOMERS 23

15 SETTLEMENT OF DEATH CLAIM 23

15.1 SETTLEMENT OF CLAIM IN RESPECT OF FIRST DEPOSIT HOLDER - PAYMRNT OF PREMATURE PROCEEDS TO JOINT ACCOUNT HOLDERS / NOMINEE "DENA MAHA TAX BACHAT YOJANA"

23

15.2 SETTLEMENT OF CLAIM IN RESPECT OF MISSING PERSONS 24

16 INTEREST PAYMENT AND AUTOMATIC RENEWAL 24

16.1 MANDATE GIVEN 24

16.2 MANDATE NOT GIVEN 24

17 DEDUCTION OF TAX 25

18 ADDITION OR DELETION OF NAME/S OF JOINT ACCOUNT HOLDERS

25

19 CUSTOMER INFORMATION 26

19.1 SECRECY OF CUSTOMERS ACCOUNTS 26

20 PREMATURE WITHDRAWAL OF TERM DEPOSIT 26

20.1 UPTO 1 CRORE 26

20.2 RS. I CRORE TO RS. 10 CRORES 26

20.3 ABOVE RS. 10 CRORES 26

20.4 TO ALLOW PART WITHDRAWAL OF TERM DEPOSITS 27

21 DEATH OF DEPOSITOR 27

22 CONVERSION OF TERM DEPOSITS / RECURRING DEPOSITS FOR REINVESTMENT IN TERM DEPOSIT

27

22.1 WITHDRAWAL OF TERM DEPOSITS FOR REINVESTMENT FOR LONGER MATURITY

27

23 RENEWAL OF OVERDUE TERM DEPOSITS 28

23.1 RENEWAL OF TERM DEPOSIT ON THE DATE OF MATURITY 28

23.2 RENEWAL OF OVERDUE TERM DEPOSITS IF PRESENTED AFTER 14 DAYS OF MATURITY

28

23.3 OVERDUE TERM DEPOSIT NOT RENEWED BUT ENCASHED 28

23.4 FROZEN TERM DEPOSIT 28

24 ADVANCES AGAINST DEPOSITS 29

25 ISSUE OF TERM DEPOSIT RECEIPTS 29

26 INSURANCE COVER FOR DEPOSITS 30

27 STOP PAYMENT FACILITY 30

28 INOPERATIVE / DORMANT ACCOUNTS 30

29 INOPERATIVE / DORMANT ACCOUNTS - RBI CIRCULAR 30

29.1 ALLOWING OPERATION IN INOPERATIVE ACCOUNT 31

30 SAFE DEPOSIT LOCKERS 31

30.1 NOMINATION FACILITIES FOR SAFE CUSTODY ARTICLES AND SAFE DEPOSIT LOCKERS

32

31 REDRESSAL OF COMPLAINTS AND GRIEVANCES 32

32 GUIDANCE TO CUSTOMERS AND DISCLOSURE OF INFORMATION

32

33 GENERAL 32

ANNEX - I 35

DOMESTIC DEPOSIT POLICY 2014-15

1) PREAMBLE: 1.1) One of the important functions of the Bank is to accept deposits from the public for the purpose of lending. In fact, depositors are the major stakeholders of the Banking system. Therefore the depositors and their interests form the key area of the Regulatory Framework for Banking in India and this has been enshrined in the Banking Regulation Act, 1949. The Reserve Bank of India is empowered to issue directives / advises on interest rates on deposits and other aspects regarding conduct of deposit accounts from time to time. With liberalisation in the financial system and deregulation of interest rates on term deposits, Banks are now free to formulate deposit products within the broad guidelines issued by RBI. 1.2)This Policy document on deposits outlines the guiding principles in respect of formulation of various deposit products offered by the Bank and terms and conditions governing the conduct of accounts. This document recognizes the rights of depositors and aims at dissemination of information with regard to various aspects of acceptance of deposit from members of public, conduct and operations of various deposits accounts, payment of interest on various deposit accounts, closure of deposit accounts, method of settlement of claims of deceased depositors etc., for the knowledge and benefit of customers. This document will impart greater transparency in dealing with the individual customers and create awareness among customers of their rights. The ultimate objective is that the customer will get services they are rightfully entitled to receive. 1.3) While adopting this policy, the Bank reiterates its commitments to individual customers outlined in our "Code of Bank's Commitments to Customers", which is based on the model Code, prepared by Banking Codes and Standards Board of India (BCSBI) and as approved by the Board. 1.4) This document is a broad framework under which the rights of common depositors are recognized. Detailed operational instructions on various deposit schemes and related services are issued from time to time by the Bank. 2) TYPES OF DEPOSIT ACCOUNTS: While various deposit products offered by the Bank are assigned different names, they can be categorized broadly into Savings, Current and Term Deposits. Definitions of major deposits schemes are as under: 2.1.1 DEMAND DEPOSITS It means a deposit received by the Bank, which is withdrawable on demand. (Current and Savings Account Deposits are Demand Deposits) 2.1.2 "Savings Deposits" means a form of demand deposit which is subject to restrictions as to the number of withdrawals permitted by the Bank during a specified period. 2.1.3 "Current Account" means a form of demand deposit where from withdrawals are allowed any number of times depending upon the balance in the account or up to a particular agreed amount and will also include other deposit accounts which are neither Savings Deposit nor Term Deposit like margin deposits where no interest is payable.

2.1.4 Overdue Term Deposits : Term Deposits on maturity if not renewed or encashed, will be treated as Overdue Term Deposit and it will be classified as Demand Deposits 2.2 TIME DEPOSITS : 2.2.1 "Term Deposit" means a deposit received by the Bank for a fixed period generally withdrawable only after the expiry of the fixed period and include deposits such as Fixed Deposits, Samruddhi Deposits, Recurring Deposits, Loan linked Recurring Deposits / insurance linked R.D., Dena Freedom Deposit, and Dena Savifix. Dena Savifix Deposit Scheme offers the facility of Sweep-Out and Sweep-In of the deposits. Ceiling for conversion of units to Term Deposit and Maximum period are decided by the Bank from time to time. Penalty for premature withdrawal is not applicable for this scheme. Rate of interest applicable under Dena Savifix will be same as card rates on Term deposits, on the date of conversion in units from Savings Account to Term Deposits. Term deposit is available for a minimum period of 7 days and for a maximum period of 10 years. However, as per mandate of the customer, Term Deposit can be renewed on the date of maturity for the period mentioned in the mandate at the rate prevalent on the date of maturity. Bank may face situations where the locker-hirer neither operates the locker nor pays

rent. To ensure prompt payment of safe deposit locker, rent at the time of allotment, Bank will obtain a security deposit [Dena Safe Deposit Locker Rent Care Deposits Scheme] which would cover three years locker rent and charges for breaking open the locker in case of an eventuality. Premature withdrawal of Term Deposit by the Customer is not allowed till the surrender of Locker. However, bank shall not insist on such Fixed Deposit from the existing locker-hirers. (RBI Master Circular on Customer Service dated 2nd July, 2012 – Point No 18.1.2 ) 3) ACCOUNT OPENING AND OPERATION OF DEPOSIT ACCOUNTS: 3.1 OPENING OF ACCOUNT The Bank, before opening any deposit account, will carry out due diligence as required under "Know Your Customer" (KYC) guidelines issued by RBI and such other norms or procedures adopted by the Bank from time to time. If the decision to open an account of a prospective depositor requires clearance at a higher level, reasons for any delay in opening of the account will be informed to him and the final decision of the Bank will be conveyed. The primary document through which customer relationship is established is Account opening Form ( AOF) .The account opening forms, copy of BCSBI code and other related material would be provided to the prospective depositor by the Bank. Our Account opening Form comprises of two parts (i) Customer Relationship Form ( ii) Customer Profile Form. Every field / column provided in the Customer relationship Form has to be mandatorily filled in by Customer/s. Names of the account holder/s should be written legibly. The customer Profile Form provides a wealth of information on the customers that facilitates mitigation of money laundering Risk. Getting all the information properly filled up by customer will, therefore enable proper implementation of KYC/AML/CFT framework. Beside it also will enable the Bank to decide on products & Services of the Bank that could be offered to a Customer. A customer is required to fill up the Customer Profile Form only once. If the same customer opens another account in the Bank, customer ID will be same and customer to fill only Customer Relationship form. These Forms contain details of information to be furnished and

documents to be produced for verification like PAN No. or Form 60 to avail Tax benefit and some other records / proof like Ration card, Passport etc. Bank official opening the account has to explain the procedural formalities and provide necessary clarifications sought by the prospective depositor when he / she approaches for opening a deposit account. The depositor may seek further information / clarifications regarding any of these items at the time of opening the account from Bank’s officials. 3.2 SMALL DEPOSIT ACCOUNT: in view of RBI guidelines, Circular No. 77/01.01.001/ 2010-11 dated 27th January 2011 our Bank has launched a scheme (“Dena Small Deposit Scheme ” ) which will render banking services belonging to Low income group in Rural , semi Urban and urban area who are not able to produce identity proof i.e. Passport, Pan Card, Voters Card, driving licence and Residential Proof i.e. Telephone Bill, Bank account, Letter from any recongnised Public Authority. This account can be opened with initial Deposit of Rs. 10/- by i) An individual in his / her name ii) An individual jointly with other person/s Iii) A Guardian on behalf of Minor For these accounts KYC norms are relaxed as under: The following are valid KYC Document for these accounts: 1. Job card issued by NREGA duly signed by an officer of the State Government. 2. The letter issued by the unique identification Authority of India details of Name , Address and adhaar Number. 3. Small accounts to be opened on production of a self attested photograph and affixation of a signature or Thumb print on the account opening Form. Balance in the account can go to Zero. There will not be any minimum Balance charges levied to this account but some restrictions on transactions are to be followed. A) The aggregate of all credits in financial year does not exceeds Rs. One lac. B) The aggregate of all withdrawals and Transfers in a month does not exceed Rs. Ten thousand only. C) The Balance at any point of time does not exceed Rs. fifty Thousand. D) Generally no Debit/ ATM Card to be issued under the scheme. However, if the account holder possesses a PAN card the Branch Manager may consider issuing a Debit / ATM card depending upon the merit of Customer. E) Foreign Remittances shall not be allowed to be credited into Small Account unless identity of customer is fully established through the production of KYC documents. F) Small account shall remain operational initially for a period of Twelve Months and thereafter for a further period of Twelve Months if the account holder provides evidence of having applied for any of the KYC documents. The entire relaxation provision to be reviewed in respect of the said account after Twenty four months.

3.3 ZERO BALANCE ACCOUNT Zero Balance Salary accounts at the discretion of the Bank are opened for Corporate employees on case to case basis; such arrangements are to be approved by the competent authority i.e. Zonal Manager. Zonal Managers are advised to evaluate the various aspects involved in opening of such accounts such as Know Your Customer (KYC) norms, the cost benefit analysis etc. 3.4 Basic Savings Bank Account

With a view to doing away with the stigma associated with the nomenclature of ‘no-frills’ account and making the basic banking facilities available in a more uniform manner across banking system. Hence the guidelines are modified on opening of basic banking ‘no-frills’ accounts, as under:

A ‘Basic Savings Bank Deposit Account’ will offer following minimum common facilities to customers:

i. The ‘Basic Savings Bank Deposit Account’ shall be considered a normal banking service available to all.

ii. This account shall not have the requirement of any minimum balance.

iii. The services available in the account will include deposit and withdrawal of cash at bank branch as well as ATMs; receipt/credit of money through electronic payment channels or by means of deposit/collection of cheques drawn by Central/State Government Agencies and Departments;

iv. While there will be no limit on the number of deposits that can be made in a month, account holders will be allowed a maximum of four withdrawals in a month, including ATM withdrawals; and

v. Facility of ATM card or ATM-cum-Debit Card;

The above facilities will be provided without any charges. Further, no charge will be levied for non-operation/activation of in-operative ‘Basic Savings Bank Account’.

The ‘Basic Savings Bank Deposit Account’ would be subject to RBI instructions on Know Your Customer (KYC) / Anti-Money Laundering (AML) for opening of bank accounts issued from time to time.

The Account holders of ‘Basic Savings Bank Account’ will not be eligible for opening any other savings bank deposit account in the bank. If a customer has any other existing savings bank deposit account in the bank, he/she will be required to close it within 30 days from the date of opening a ‘Basic Savings Bank Account’.

( Guidelines issued by MOF , DFS , GOI vide F. No.25/9/2012-BO.II dated 17th August, 2012 )

3.5 MINIMUM BALANCE For deposit products like Savings Bank account and Current Deposit account, the Bank will normally stipulate certain minimum balances to be maintained as part of

'terms and conditions' governing operations of such accounts. Failure to maintain minimum balance in the account will attract levy of charges as specified by the Bank. At present the minimum balance and charges for not maintaining minimum balance are as follows:

Savings Account with cheque book facility - Quarterly Average Balance: Pensioner / Ex Staff - NIL Metro / Urban/Semi Urban- ` 1000/- , Rural- ` 500/-

Savings Account without cheque book facility - Quarterly Average Balance: Pensioner / Ex Staff - Zero Others - Metro / Urban/Semi Urban- ` 1000/- , Rural- ` 250/-

Charges for not maintaining Quarterly Minimum Balance – Pensioner / Ex Staff – NIL, Others - ` 100/- per quarter. Current Account Quarterly Average Balance: : Metro / Urban – ` 5000/- Semi Urban – ` 3000/- , Rural- ` 1000/- Charges for not maintaining Quarterly Minimum Balance – ` 250/- per quarter.

For Savings Bank account the Bank may also place restrictions on number of transactions for any given period. The rules on Savings Bank Account operation are displayed on the Bank's website. Similarly, The Bank may specify charges for issue of cheque books, additional statement of accounts, duplicate pass-book, folio charges, etc. All such details, regarding terms and conditions for operation of the accounts, availability of facilities such as Direct debit /credit, standing instructions etc. and schedule of charges for various services will be informed to the prospective depositor while opening the account. Any changes in the terms and conditions governing operation of the account will be implemented, normally, after giving due notice to the customers. 3.6 Cash withdrawal at non base branches Cash withdrawal at Non-base branches is permitted up to ` 50,000/- only. The cash payment will be made to account holder only, on production of his identity proof, and not to any Third party. The cash withdrawal charges are as per Tariff of charges mentioned in Service charges circular. 4. WHO CAN OPEN THE ACCOUNT Details with regard to opening of Accounts are furnished in KYC Policy. However, in nutshell, they are as under: Savings Bank Accounts can be opened for eligible person / persons and certain organisations / agencies (as advised by Reserve Bank of India from time to time). Current Accounts can be opened by individuals / partnership firms / private and public limited companies / HUFs / Specified Associates / Societies / Trusts etc. Term Deposit Accounts can be opened by individuals / partnership firms / private and public limited companies / HUFs / Specified Associates / Societies / Trusts etc.

Term Deposits are accepted for a minimum period of 7 days and for a maximum period of 10 years. Certain Organizations notified by RBI / Government of India from time to time will not be permitted to open any deposit account.

4.1 Extra precautions to be taken in the opening of the following types of accounts :

The following types of accounts would require higher account opening documentation and due diligence to be carried out at the time of opening new accounts.

a) Trust accounts - would stricter documentation and due diligence to be exercised as given in the KYC documentation table below.

b) Non face to face customers - Customers with whom the Bank has not had direct interaction (with the prime holder of an individual account or one of the signatories of a non individual account) at the time of opening the account would require stricter documentation as per KYC policy.

c) Correspondent Banking - Transactions conducted through correspondent relationship need to be managed taking a risk based approach. ‘Know Your Correspondent’ procedures should be established to ascertain whether the correspondent Bank or counter party is itself regulated for money laundering prevention and, if so, whether the correspondent is required to verify the identify of their customers to FATE standards. Where the correspondent Bank do not follow FATE guidelines, additional due diligence should be exercised.

d) Fiduciary Accounts - Bank may exercise due care at the time of opening fiduciary accounts opened by professional intermediaries. 4.2 KYC requirements and facilitating opening / operation of accounts of the bank customers

Branches should obtain and keep on record photographs of all depositors/account holders in respect of accounts opened by them.

(i) The branches should not insist on photographs in case of accounts of staff members only (Single/Joint).

(ii) The branches should obtain photographs of all persons authorised to operate the accounts viz., Savings Bank and Current Accounts without exception. The banks should also obtain photographs of the ' Pardanishin' women.

(iii) The branches should not ordinarily insist on the presence of account holder for making cash withdrawals in case of 'self' or 'bearer' cheques unless the circumstances so warrant. The banks should pay 'self' or 'bearer' cheques taking usual precautions.

(iv) Fresh photographs need not be obtained when an additional account is desired to be opened by the account holder.

(v) In the case of operative accounts, viz. Savings Bank and Current accounts, photographs of persons authorised to operate them should be obtained. In case

of other deposits, viz., Fixed, Recurring, Cumulative, etc., photographs of all depositors in whose names the deposit receipt stands may be obtained except in the case of deposits in the name of minors where guardians' photographs should be obtained.

The bank’s welcome kit should contain Copy of Service Charges, BCSBI Code and Most Important Terms & Conditions.

4.2.1.Opening of accounts by close relative, such as parents, son, daughter, spouse etc. The Bank has been advised that in cases of close relatives e.g. wife, son, daughter and parents etc. who live with their husband, father/mother, and son as the case may be, the banks can obtain an identity document and utility bill of the relative with whom the prospective customer is living along with a declaration from the relative that the said person (prospective customer) wanting to open an account is a relative and is staying with him/her. Banks can use any supplementary evidence such as letter received through post for further verification of the address. Bank should keep in mind the spirit of instructions issued and avoid undue hardships to individuals who are, otherwise, classified as low-risk customers. It is emphasised that branches should ensure that close relatives, such as, parents, son, daughter, spouse, etc. are able to open accounts without any interruption in accordance with the RBI/Bank’s guidelines 4.2.2. Full operational facilities in joint account with spouse staying at separate stations Bank is aware that in the existing institutional and regulatory framework, the husband and wife both can access most of the normal banking services while staying at different places by using ATM/Debit Cards and Mobile Banking services for cash withdrawals, purchases/merchandising services, etc. and most of the other services, such as, purchase of Drafts, transfer of funds, utility bill payments etc. by using ‘On-line’ banking facilities – many of such facilities are already extended to account holders. Bank should extend full operational facilities to the spouse staying at different stations, if one of them i.e. husband or wife is staying at ‘home-branch’ station with true spirit. 4.2.3. Account portability/opening of new bank accounts In this regard, branches / field functionaries are aware that the account portability to the customers is already provided where the customer desires to shift his/her account to another branch of our Bank where he/she need not submit new KYC documents again. This facility is free of cost and the customer can retain the same account number.

It is noticed that opening of fresh accounts is insisted when customers approach them

for transferring their account from one branch to another branch of our bank. Such

insistence of opening fresh account or making the customer undergo full KYC process

again causes inconvenience to them resulting in poor customer service. It is not

reasonable as all branches are now under CBS platform and KYC records of a

particular customer can be accessed by any branch of the bank.

KYC once done by transferor branch shall be valid for transfer of the account within

the bank as long as full KYC has been done for the concerned account. The customer

can transfer his account from one branch to another branch without restrictions. In

order to comply with KYC requirements of correct address of the person, fresh

address proof may be obtained from him / her upon such transfer by the

transferee branch within six months of transfer.

It may be noted that instructions regarding periodical updation of customer

identification data (including photograph/s) is to be complied with after the account is

opened. The periodicity of updation shall be once in five years in case of low risk

category customers and once in two years in case of high and medium risk categories

The illustrative examples of High Risk Category are Antique Dealers, Dealers in arms/

ammunitions, Multi Level Marketing Firms, Private Trusts, NGOs, politically exposed

persons, customers who live in High risk countries and customers who do not declare

their nature of business. The customers pertaining to Medium Risk Category are

Private Trusts, HNIs, Government Department Accounts, other reputed

companies/firms, customer who resides in a Medium Risk country. Low Risk Category

customers are Zero Balance Account holder, Existing Staff accounts and salary

accounts.

The records pertaining to the identification of the customer and his address are

preserved properly for at least Ten years after the business relationship is ended. The

identification records and transaction data should be made available to the competent

authorities upon their request. ( Guidelines vide Circular No.179 / 25/2011-12

dated 27th September, 2011 )

4.2.4. Accounts of migratory workers:

Detailed guidelines regarding KYC norms for accounts of persons belonging to low income group vide circular no.10/01/2011-12 dated 09.04.2011states that such accounts can be opened on the basis of introduction of the existing account holder whose account with the bank is at least six months old, KYC complied and shows satisfactory transaction. Branches are advised to ensure the guidelines are truly implemented when prospective low income group person is required to open account. Further, Ministry of Finance vide their above notification has now directed as under: Banks are advised to open accounts of such migratory workers on production of a proof of permanent place of residence also, without insisting on production of proof of residence in the locality of the bank branch. The Branch opening such an account shall get the details of the permanent place of residence verified through an online communication to the nearest Branch of the place of permanent residence within thirty days of opening of the account. During this intervening period of thirty days, the Branch shall allow the customer limited operations to enable him/her meet the basic day-to-day requirements of funds. ( Circular No. 224/47/2011-12 dated 03.11.2011)

4.3 Customer Identification Procedure:

1. Information collected at the outset for customer identification purpose to include :

(i) the purpose and reason for opening the account or establishing the relationship.

(ii) the anticipated level and nature of the activity that is to be undertaken

(iiii) the expected origin of the funds to be used within the relationship.

(iv) details of occupation / employment to be sought for Bank accounts and sources of wealth or income will be required for banking relationship

2. KYC Documentation for different types of liability accounts

The new documentation guidelines below will be applicable to all new Customers opening Current, Savings and Term deposit accounts as well as existing customers, where existing documentation does not conform to these documentation standards. Existing current accounts in high and medium risk classification will be subjected to revised KYC procedures as per the guidelines formulated by our Bank for rectifying such accounts, applying the norms of materiality and risk. The exact documents / guidelines to be taken for each type of account / product offered are specified in KYC and AML policies prescribed by our Compliance Department and hence not repeated here.

4.4 BRANCHES TO SEND THANKS/ WELCOME LETTER TO ALL THE NEW CUSTOMERS AFTER OPENING OF ACCOUNT TO COMPLY WITH KYC NORMS Banker has to observe a number of rules/precautions because opening an account would mean entering into a contract with the person(s) willing to open an account. This involves certain responsibilities and obligations - legal and customary - which it must discharge with reasonable care to protect its own interest as well as to maintain the faith of the general public.

Hence all the branches should send Thanks/ Welcome letter to the account holder at the address given in the account opening form (Not to handover to the customer personally) for opening the account with the branch.This procedure will confirm the correctness of the address given by the customer and also the bonafides of the customer.

4.5 Non insistence for Introduction

If the KYC norms are strictly complied, then introduction will no more be mandatory requirement and the account can be opened without introduction. However, it is reiterated that the KYC norms have to be strictly adhered to and there shall not be any compromise on KYC Compliance.

Introduction will be continued to be obtained, where relaxed KYC norms are applicable like in case of “Dena Small Deposit Account”.

5 TYPE OF ACCOUNTS OTHER THAN USUAL DEMAND & TIME DEPOSITS : 5.1 MINORS' ACCOUNTS: A minor can open Savings Bank account with initial deposit of Rs. 10/- and can maintain the account with Zero balance . Birth date of minor is required to be noted on Bank’s account opening form at the time of opening account The minimum balance charges will not be levied to the account. Bank will issue guideline regarding any changes from time to time.

The account can be operated by the natural guardian or by minor him / her, if he / she is above the age of 10 years. The account can also be opened jointly. Accounts singly operated by Minor will not be provided with cheque book facility. On attaining majority, the erstwhile minor should confirm to the Bank of the balance in his / her account. If the account is otherwise to be operated by the natural guardian - recent photographs, identity proof, address proof and fresh specimen signature of erstwhile minor duly verified by the natural guardian would be obtained and kept on record by the Bank for future operations. Savings Bank / Term Deposit account can also be opened by a minor jointly with natural guardian or with Mother as the guardian. 5.2 .1.OPENING OF ACCOUNT OF SALARIED PERSON : For Opening of accounts of Salaried persons branches should not only rely on a certificate issued by the employer as the only KYC document account for purpose of certification of Identity as well as Address Proof. Such practice is open to misuse and fraught with risk. Hence branches need to rely on certification only from the corporate and other reputed entities and should be aware of the competent authority designated by employer to issue such certificate / letter and attested Salary slip along with one of the officially valid document i.e. PAN Card, Voters Identity card and utility bill (electricity bill/telephone bill). These accounts can be opened and maintained at Zero Balance . The Account holder will be allowed to maintain the account at zero balance as long as he/ she is associated with the organization. In case of retirement or switch over to other organization the account will be treated as Regular Savings Account where in he/ she will have to maintain required minimum balance. 5.2.2 OPENING OF CORPORATE SALARY ACCOUNT : With an objective to enhance our Low Cost Deposit clientele base and to increase CASA Deposits, a new Saving Bank Account Scheme named as “Corporate Salary Account” has been designed. The targeted clientele for the scheme are employees working in Central / State Government/ PSUs/ Reputed Public Limited Companies/ MNCs/ Reputed Educational Institutions (Govt. recognized/ aided Schools/ Colleges/ Universities/ Research Institutes who have more disposable income and capable of maintaining large balance in Savings Bank Account. The main feature of the scheme is availability of an overdraft upto two months net salary of the account holder which shall enable them to meet their urgent social obligation/requirement such as medical/educational expenses etc. The account can be opened and maintained at Zero Balance. The account holder will be allowed to maintain zero balance as long as he/she is associated with that organization. In case of Retirement, switch over to other organization, the Account will be treated as Regular Savings Bank Account wherein he/she will have to maintain the required minimum balance charges. 5.2.3 Opening of “Zero Balance” Basic Accounts of the students

To ease the hardships faced by students the “zero Balance” Basic Accounts shall

be opened expeditiously to facilitate direct transfer of scholarship amounts into the

bank accounts of the concerned students under the State Government Scheme for

Post Matric Scholarship for Scheduled Caste and other students.

“Zero Balance“ accounts for students from Minority communities or other

disadvantaged groups shall also be opened when they approach banks for availing

various scholarships or other benefits offered by the Government. This facility shall be

extended to students from Scheduled Castes, Scheduled Tribes, Minority

Communities or other backward classes also.

Savings or Current account should be treated as inoperative/dormant if there are no transactions in the account for over a period of two years and the safeguards to be adopted in dealing with such accounts.

State and Central Governments have expressed difficulties in crediting cheques/Direct Benefit Transfer/Electronic Benefit Transfer/Scholarships for students, Zero Balance Accounts, etc. into accounts opened for the beneficiaries under various Central/State Government schemes but had been classified as dormant/inoperative due to non-operation of the account for over two years.

Different “product code” should be allotted in CBS to all such accounts opened by branches so that the stipulation of inoperative/dormant account due to non-operation does not apply while crediting proceeds.

In order to reduce the risk of fraud etc., in such accounts, while allowing operations in

these accounts, due diligence should be exercised by ensuring the genuineness of

transactions, verification of signature and identity, etc. However, it has to be ensured

that the customer is not inconvenienced in any manner.

5.2.4 Opening of Bank accounts of Foreign Students:

IBA has advised the banks to allow opening of bank account of a foreign student on producing the following documents:

1. Passport – as the document of proof of identity 2. Valid Visa – a visa with photograph in it can also serve as an identity proof.

3. Proof of admission – Usually a letter from the University or College 4. Address Proof – a Letter from the college or hostel, certificate from embassy of the country of origin or any appropriate legal authority certified local address in India / agreement /certification of registration issued by Foreign Registration Regional Office (FRRO) Zero balance accounts with ATM/Debit card facilities will also be provided to foreign students. IBA is of the view that Basic Savings Bank Account should meet the requirement of foreign student and no additional documents should be insisted for opening accounts of foreign students. ( IBA letter No. CE. No. RB / cs& cr /FS / 5916 dated 3rd October, 2012 )

5.3 OPENING OF SAVING ACCOUNT JOINTLY WITH NRI . RBI vide circular No. RBI/2011-12/173 dated September 15, 2011, stated that individual resident in India may be permitted to include Non Resident close relative(s), (relatives as defined in section 6 of Companies Act, 1956), as a joint holder(s) in their resident Bank accounts on “former or survivor” basis. However, such non resident Indian close relatives shall not be eligible to operate the account during the lifetime of the resident account holder.

5.4 ACCOUNT OF ILLITERATE / BLIND PERSON The Bank may at its discretion, open Deposit Accounts other than Current Account of Illiterate / Blind persons. The account of such person may be opened provided he / she call on the Bank personally along with a witness who is known to both the depositor and the Bank. Normally, no cheque book facility is provided for such Savings Bank account. At the time of withdrawal / repayment of deposit amount and / or payment of interest, the account holder should affix his / her thumb impression or mark in the presence of the authorized officer who should verify the identity of the person. The Branch shall explain the need for proper care and safe keeping of the pass book, etc. given to the account holder. The Bank official shall explain the 'terms and conditions' governing the account to the illiterate. 5.5 ACCOUNT OF VISUALLY IMPAIRED PERSONS The Bank to open Deposit Accounts other than Current Account of visually impaired person. The account of such person may be opened provided he / she call on the Branch personally along with a witness who is known to both the depositor and the Bank. However, Branch shall ensure that all the banking facilities such as cheque book facility including ATM facility, Net banking facility, locker facility, retail loans, credit cards etc. are invariably offered to the visually challenged without any discrimination. At the time of withdrawal / repayment of deposit amount and / or payment of interest, the account holder should affix his / her thumb impression or mark in the presence of the authorized officer who should verify the identity of the person. The Bank to explain the need for proper care and safe keeping of the pass book, cheque book etc. given to the account holder. The Branch official to explain the 'terms and conditions' governing the account to the Visually Impaired Persons. Branches to render all possible assistance to the visually challenged for availing the various banking facilities. 5.6 OPENING OF A BANK ACCOUNT OF A PERSON WHO HAS LOST BOTH HIS/ HER HANDS AND COULD NOT SIGN THE CHEQUE / WITHDRAWAL FORM In terms of the General Clauses Act, the term “Sign” with its grammatical variations and cognate expressions, shall with reference to a person who is unable to write his name, include “mark” with its grammatical variations and cognate expressions. The Supreme Court has held in AIR 1950 – Supreme Court, 265 that there must be physical contact between the person who is to sign and the signature can be by means of a mark. This mark can be placed by the person in any manner. It could be the toe impression, as suggested. It can be by means of mark which anybody can put on behalf of the person who has to sign, the mark being put by an instrument which has had a physical contact with the person who has to sign. 5.7 OPENING OF ACCOUNT OF THE DISABLED PERSONS WITH AUTISM, CEREBRAL PALSY, MENTAL RETARDATION AND MULTIPLE DISABILITIES Bank will rely upon the Guardianship Certificate issued either by the District Court under Mental Health Act or by the Local Level Committees under the above Act for the purposes of opening / operating bank accounts. Bank will explain the details of opening of account and its operational guidelines to the parents / relatives of the disabled persons so that he does not face any difficulty in this regard.

5.8 ACCOUNTS OF MARRIED WOMEN In order to facilitate newly married women in opening new account / transferring or getting the pre marital name and address changed is permitted. Bank can accept any valid document which provides customer information to their satisfaction as part of implementation of customer identification procedure in the absence of documents prescribed there in. Bank will allow the women to open the account with their maiden name adhering to KYC guidelines. Details of opening of new Account/ transferring of Account or Change in the name of existing account is furnished in KYC/ Anti Money Laundering Policy (circular No.120/17/2011-12 dated 02.08.2011 issued by Compliance Dept) 5.9 OPENING OF ACCOUNTS OF MINORITY COMMUNITIES : Savings accounts of Minority communities are to be opened adhering to KYC guidelines without any hassle. 5.10 OPENING OF CURRENT ACCOUNTS – NEED FOR DISCIPLINE 5.10.1 Accounts of Proprietary Concerns

Bank may also accept any registration/licensing document issued in the name of the proprietary concern by the Central Government or State Government Authority/Department. Banks may also accept IEC (Importer Exporter Code) issued to the proprietary concern by the office of DGFT as an identity document for opening of bank account. The following documents is the indicative list of required documents for opening accounts of proprietary concern:

i. The complete Income Tax return (not just the acknowledgement) in the name of the sole proprietor where the firm's income is reflected, duly authenticated/ acknowledged by the Income Tax Authorities.

ii. Utility bills such as electricity, water, and landline telephone bills in the name of the proprietary concern.

iii. Aadhar Card issued by the competent authority may be considered as identity and address proof also provided address given in account opening form tallies with Aadhar Card.

5.10.2 Zonal Offices to ensure that branches shall not open Current accounts of entities which are enjoying credit facilities (fund based or non-fund based) from the banking system without specifically obtaining a No-Objection Certificate from the lending bank(s).

5.10.3 Branch may open current accounts of prospective customers in case no response is received from the existing bankers after a minimum waiting period of a fortnight. If a response is received within a fortnight, branch will assess the situation with reference to information provided on the prospective customer by the bank concerned and are not required to solicit a formal no objection, consistent with true freedom to the customer of banks as well as needed due diligence on the customer by the bank. 5.10.4 In case of a prospective customer who is a corporate or large borrower enjoying credit facilities from more than one bank, the branch will exercise due diligence and

inform the consortium leader, if under consortium, and the concerned banks, if under multiple banking arrangement.( Guidelines vide our circular no.398/75/2012-13 dated 1/02/2013 ) 6. NOMINATION : 6.1 NOMINATION FACILITY FOR DEPOSITORS Nomination facility is available on all deposit accounts opened by individuals and sole proprietor. Nomination Facility is available for Joint Accounts also Nomination shall be made only in favour of individuals. Nomination can be cancelled or changed by account holder/s any time. While making nomination / cancellation or change thereof it is required to be witness by third party. Nomination can be modified by the consent of account holder/s. Nomination can be made in favour of minor also . In the Nomination Forms (DA1, DA2, DA3) the Thumb impression of the account holder is required to be attested by two witnesses. The signature need not be attested by witnesses. The space provided for “ Signature of witnesses “ is meant for use when the account holder is affixing Thumb impression. This is not applicable for literate Customers. Branches to persuade all depositors to avail nomination facility. The nominee, in the event of death of the depositor/s would receive the balance outstanding in the account as a trustee of legal heirs. As such nominee cannot be an Association, Trust, Society or any other organization or any office bearer thereof in his Official capacity. In view thereof, any nomination other than in favour of an individual will not be valid. There can not be more than one nominee in respect of joint deposit account. Banks to allow variation / cancellation of subsisting nomination by all the surviving depositor(s) acting together and this is also applicable to deposits having operating instructions ‘ either or survivor ‘. In the case of joint deposit account the nominee`s right arises only after the death of all the depositors. In the event of the death of one of the joint account holders, the right to the deposit proceeds does not automatically devolve on the surviving joint deposit account holder, unless there is a survivorship clause. Acknowledgment should be given to customer invariably. Branch Indicate the name of the nominee in the Passbook / statement of Accounts / Term Deposit Receipts, in case the customer is agreeable for the same. To record the nomination, branch should affix a rubber stamp as follows DENA BANK -------------- BRANCH “Nomination Registered”

6.2 Nomination in case of Joint Deposit Accounts : It is observed that sometimes the customers opening joint accounts with or without “Either or Survivor” mandate, are dissuaded from exercising the nomination facility. It is clarified that nomination facility is available for joint deposit accounts also. Branches should offer nomination facility to all deposit accounts including joint accounts opened by the customers. The branch officials should persuade the account holders to make nomination or at least make them aware of the facility available to them. 7. DUE DILIGENCE The due diligence process while opening a deposit account will involve satisfying about the identity of the person, verification of address, satisfying about his / her occupation and source of income. Obtaining introduction is not mandatory but proof of identity, acceptable to the Bank, obtaining recent photograph of the person/s opening / operating the account and affixing the specimen signature in the account opening form in the presence of Bank official as part of Bank's due diligence process. Details are furnished in KYC guidelines. Bank will provide account opening form which will contain details of essential information required to be furnished and documents to be produced for verification and/or for record for meeting the KYC requirements. 7.1 PERMANENT ACCOUNT NUMBER (PAN) OR GENERAL INDEX REGISTER (GIR) In addition to the due diligence requirements, under KYC norms the Bank is required by law to obtain Permanent Account Number (PAN) or General Index Register.(GIR) Number and / or declaration in form No. 60 or 61 as specified under the Income Tax Act / Rules. The requirements are subject to change from time to time depending upon the circumstances, guidelines and policies from time to time.

7.2 REFUSAL TO OPEN AN ACCOUNT The Bank reserves the right to refuse a request for opening an account if the individual / organisation is found as declared having links with some terrorist organisation or found involved in Money Laundering activities etc. In case, an existing account is found to be linked / associated to the published list of terrorist organizations the same will be placed for appropriate action. The Bank can also refuse to open account of any person who is of suspicious nature or if the person desirous to have an account fails to provide necessary information / documents as required under KYC norms and which is a part of due diligence prescribed by the Bank. Deposit account can be opened by an individual in his own name, or by more than one individual in their joint names. Savings Bank account can also be opened by a minor jointly with natural guardian or with mother as the guardian. Minors above the age of 10 will also be allowed to open and operate saving Bank account independently but without the facility of issuing cheques to others. If the decision to open an Account of prospective depositor requires clearance at a higher level, reasons for any delay in opening of the account to be informed to him and the final decision of the Bank to be conveyed at the earliest to the customer

8. TYPES OF MANDATE IN JOINT ACCOUNTS If the mandate for operation of an account is “To be operated jointly” then all joint depositors will have to sign for an operation / for closure. 8.1 EITHER OR SURVIVOR: The operation in the Current and Savings Bank will be allowed to be operated by either of the joint account holders during their lifetime and by the survivor on the death of either of them. However, for closure of the account, signatures of both the account holders will be required unless mandate to the contrary is available on Bank’s records. In case of Term Deposits, the mandate “Either or Survivor” is binding on the maturity of the deposits. For premature withdrawal / raising any Loan against the Deposits, signature of both the account holders is necessary, unless the mandate expressly authorizes the Bank otherwise.

8.2 ANYONE OR SURVIVOR/S:

In case of such joint Savings and Current accounts, the operation in the account will be allowed to any one of them during their life time and by the survivor or survivors on the death of any one of them. However, for closure of the account, signature of the all the account holders are a must, unless the mandate is otherwise. These issues will be governed by the Bank’s policies in force from time to time. As per Court Judgment, in Current account, Savings account and Term Deposit account of individuals, if one of the depositors requests the Bank to not to allow operation by another depositor(s), the Bank will not accede to such request and shall be justified in asking the depositor to bring a Court Order to that effect. This shall not be applicable to Partnership or other Business entity's accounts. In case of Term Deposits the mandate is binding on maturity of the deposits. For premature withdrawal of the deposits or for availing advance against the deposit receipt, signature of all the depositors is required, unless there is a mandate to the contrary. The procedure shall be governed by the Bank’s prevailing policies. 8.3 Mandate for Term Deposits It is reiterated that in case of term deposits with “Either or Survivor” or “Former or Survivor” mandate, banks are permitted to allow premature withdrawal of the deposit by the surviving joint depositor on the death of the other, only if, there is a joint mandate from the joint depositors to this effect. The joint deposit holders may be permitted to give the mandate either at the time of placing fixed deposit or anytime subsequently during the term/tenure of the deposit. If such a mandate is obtained, banks can allow premature withdrawal of term/fixed deposits by the surviving depositor without seeking the concurrence of the legal heirs of the deceased joint deposit holder. It is also reiterated that such premature withdrawal would not attract any penal charge. ( Guidelines vide RBI notification No.DBOD No. Leg.BC.37/ 09.07.005/2012-13 dated 16th August , 2012 ) 8.4. POWER OF ATTORNEY: At the request of the depositors the Bank will register mandate / power of attorney given by him authorising another person to operate the account on his behalf.

9 RATE OF INTEREST Payment of Interest on Savings Deposit to be calculated on Daily product basis. At present, Interest Rate applicable on Savings Deposit is 4% (subject to change from time to time). 9.1 CALCULATION OF INTEREST: In terms of Reserve Bank of India directives, interest shall be calculated at quarterly intervals on term deposits and paid at the rate decided by the Bank depending upon the period of deposits. In case of monthly deposit scheme, the interest shall be calculated for the quarter and paid monthly at discounted value. The interest on term deposits is calculated by the Bank in accordance with the formulae and conventions advised by Indian Banks' Association. For calculation of interest, 365 days will be reckoning irrespective of leap year. For the purpose of calculation of interest on domestic term deposit, it has been prescribed that on deposits repayable in less than three months or where the terminal quarter is incomplete, interest should be paid proportionately for the actual number of days, the year at 365 days. If a Fixed Deposit Receipt matures and proceeds are unpaid, the amount left unclaimed with the Bank will attract Saving Bank rate of interest. 9.2 PAYMENT OF INTEREST ON TERM DEPOSITS MATURING ON HOLIDAYS: If due date of a Term Deposit falls on a holiday, Sunday, non-business working day (as also Saturday in case of NRE deposits) then interest will be paid for such intervening day(s), at the originally contracted rate, till the succeeding working day. 9.3 ROUNDING OF TRANSACTIONS: All transactions, including payment of interest on deposits/ charging of interest on advances, would be rounded off to the nearest rupee; i.e. fractions of 50 paise and above shall be rounded off to the next higher rupee and fraction of less than 50 paise shall be ignored. Issue prices of cash certificates should also be rounded off in the same manner. However, as per RBI guidelines, branches should ensure that Cheques / Drafts issued by clients containing fraction of Rupees are not rejected or dishonoured by the Bank. 9.4 PAYMENT OF INTEREST TO SENIOR CITIZENS: Under “Dena Senior Citizen Deposit Scheme”, Senior Citizens are eligible for an additional interest over and above card rate for all maturities. The additional interest paid to Senior Citizens on Term Deposits is subject to change from time to time. At present additional interest rate for Senior Citizen is 0.50%. The additional interest paid to Senior Citizens is not applicable to any type of Non-Resident Deposits.

In the case of a Term deposit which stands in the name of a HUF, the Karta of the HUF can not be offered higher rate of interest even if he is a senior citizen as the beneficial owner of the deposit is the HUF.

For conversion of normal deposits to Senior Citizen Deposit, the customer will be

offered senior citizen benefit subject to

i. Proof of age is given to the Bank on or before becoming a senor citizen.

ii. Contracted Interest rate will be paid till becoming senior citizen and additional interest applicable to senior citizen will be given for the balance period of maturity.

iii. No penalty of interest at the time of conversion into senior citizen scheme since the amount is only transferred from normal scheme to senior citizen scheme.

(Damodaran Committee`s recommendations vide IBA letter No CE. RB /CS /4528 / dated 28th November, 2011)

9.5 INTEREST RATE FOR STAFF MEMBERS AND EX-STAFF MEMBERS One percent additional rate of interest over its ruling rate of interest on various term deposit schemes and Savings Bank deposits in the name of a staff member, individually or jointly with any member of his / her family shall be paid by the Bank. Spouse of a deceased member or a deceased retired member of the bank's staff should be given higher rate of interest of one per cent over the usual rate applicable to the public. A similar benefit should be given to an association or a fund, members of which are members of the bank’s staff. The branch should obtain the declaration as per Manual of Instructions from the members of the staff who are already having deposit accounts and also note to obtain a similar declaration where fresh deposits are received from staff members. The name of staff members may be first or second in order. 9.6 CATEGORIES OF STAFF ELIGIBLE FOR BENEFITS: (i) “a member of the bank’s staff” means a person employed on a regular basis, whether full-time or part-time, and includes a person recruited on probation or employed on a contract of a specified duration or on deputation and an employee taken over in pursuance of any scheme of amalgamation, but does not include a person employed on casual basis. (ii) In the case of persons taken on deputation for a fixed duration, or on a contract of a fixed duration, the benefit will cease to accrue on the expiry of the term of deputation or contract, as the case may be. (iii) “A retired member of the bank’s staff” means an employee retiring whether on superannuation or otherwise as provided in the bank’s Service/Staff Regulations, but does not include an employee retired compulsorily or in consequence of disciplinary action; (iv) “Family” means and includes the spouse of the member/retired member of the bank’s staff and the children, parents, brothers and sisters of the member/retired member of the bank’s staff, who are dependent on such member/retired member, but does not include legally separated spouse; (v) Ex-Staff who has taken One time VRS announced in 2001 and Ex-Staff who has taken VRS as per DBOSR & Bank’s Pension regulation.

(vi) Persons who were in employment of the Bank and have resigned from the services of the Bank and not falling under any one of the above , will not get any benefit available to Staff of the Bank. (The above definition of Family is only for entitlement of applicable interest rate on joint account of staff members with their family members) (vii) Payment of additional interest is subject to the following conditions, namely: (a) The additional interest is payable only so long as the person continues to be eligible for the same and in case of his ceasing to be so eligible, till the maturity of a term deposit account; (b) In the case of employees taken over pursuant to the scheme of amalgamation, the additional interest is allowed only if the interest at the contractual rate together with the additional interest does not exceed the rate, which could have been allowed if such employees were originally employed by the bank. Bank Employees’ Federations in which bank employees are not direct members are not eligible for additional interest. In case of Domestic deposits, it will be in order for banks to give their retired staff, who are senior citizens, the benefit of higher interest rates as admissible to senior citizens (60 years of age or above) over and above the additional interest of not exceeding one per cent payable to them by virtue of their being retired members of the banks' staff. However, if a staff member who is not a senior citizen and opens a joint account along with a senior citizen, he/her will be entitled for benefit of higher rate as applicable to staff only and he/her will not be entitled for benefit of higher rate payable to senior citizen. 9.7 INTEREST RATE ON DEPOSITS FOR CHAIRMAN AND MANAGING DIRECTOR AND EXECUTIVE DIRECTOR Bank will pay additional interest not exceeding one percent per annum over and above the rate of interest stipulated on deposits accepted/renewed from Chairman & Managing Director, Executive Director appointed for a fixed tenure. However, they are eligible to get the benefit only during the period of their tenure. 9.8 Interest Rate On Current Accounts Maintained By Regional Rural Banks Bank will not pay interest on the current accounts maintained by RRBs. 9.9 MICR Code and IFSC Code: Currently, the MICR code is available on the cheque leaf along with the IFSC code of the branch. On a review it has been decided that this information should also be made available in the passbook / statement of account of the account holders. If the customer demands and branches are not in a position to print the information, rubber stamp may be affixed in passbook and/or statement of account. 10 ISSUE OF CHEQUE BOOK: Cheque Book can be issued to customers 1. In person 2. To other person 3. By Post

Officer issuing the Cheque Book to the customer must ensure to affix or write account number on every leaf. 10.1 IN PERSON: Cheque Book be issued to the Client personally against the Requisition Slip from the Cheque Book issued to him / her. If the request for issuance of Cheque Book is through Request letter, customer be advised to mention the reasons for not submitting requisition slip in his / her request letter. Branch to establish the identity of a person to whom Cheque Book is issued 10.2 TO PERSON OTHER THAN CUSTOMER : Issue of Cheque Book to third party be discouraged, if not eliminated altogether. In such cases, the identity of the person collecting the cheque Book on behalf of third person should be established beyond doubt and detailed KYC be carried out & confirmation be obtained from customer over phone and recorded. 10.3 TO CUSTOMER BY POST: In case of up-country account holders, cheque books can be issued and the same should be sent to the customer by post under Registered A.D./authorised courier service at the address given, provided the requisition slip has been received by the branch.

Bank will not obtain such undertakings from depositors as follows:

“The dispatch of Cheque Books by the Courier is at depositor’s risk".

10.4 Statement of accounts and Pass Books

Branches are advised to invariably offer pass book facility to all its savings bank account holders (individuals)and in case the branch offers the facility of sending statement of account and the customer chooses to get statement of account, the branch must issue monthly statement of accounts. The cost of providing such Pass Book or Statements should not be charged to the customer.

Updating passbooks

Customers may be made conscious of the need on their part to get the pass-books updated regularly.

A passbook is tendered for posting after a long interval of time or after very large number of transactions, a printed slip requesting the depositor to tender it periodically should be given.

Pass books remaining with the branches should be held in the custody of named responsible officials, the pass books should be held under lock and key overnight.

Entries in passbooks / statement of accounts

Branches should avoid inscrutable entries in passbooks / statement of accounts and ensure that brief, intelligible particulars are invariably entered in passbooks / statement of account.

Providing monthly statement of accounts

The statement of accounts for current account holders may be sent to the depositors in a staggered manner instead of sending by a target date every month. The customers may be informed about staggering of the preparation of these statements.

Address / Telephone Number of the Branch in Pass Books / Statement of Accounts

In order to improve the quality of service available to customers in branches, the address / telephone number of the branch should be mentioned/ stamped on the passbooks / statement of accounts.

11. OPERATIONS IN ACCOUNTS OTHER THAN USUAL DEMAND & TIME DEPOSITS: 11.1 TYPES OF SICK / OLD / INCAPACITATED ACCOUNT HOLDERS The cases of sick / old / incapacitated account holders fall into these categories: An account holder who is too ill to sign a cheque / cannot be physically present in the bank to withdraw money from his bank account but can put his/her thumb impression on the cheque / withdrawal form An accountholder who is not only unable to be physically present in the bank but is also not even able to put his/her thumb impression on the cheque /withdrawal form due to certain physical incapacity.

To facilitate the old / sick account holders operate their bank accounts, branches should follow the procedure as under:-

(a) Wherever thumb or toe impression of the sick/old/incapacitated account holder is obtained, it should be identified by two independent witnesses known to the bank, one of whom should be a responsible bank official.

(b) Where the customer cannot even put his / her thumb impression and also would not be able to be physically present in the bank, a mark can be obtained on the cheque / withdrawal form which should be identified by two independent witnesses, one of whom should be a responsible bank official.

(c) The customer may also be asked to indicate to the bank as to who would withdraw the amount from the bank on the basis of cheque / withdrawal form as obtained above and that person should be identified by two independent witnesses. The person who would be actually drawing the money from the bank should be asked to furnish his signature to the bank.

11.2 FACILITY TO SICK / OLD / INCAPACITATED NON-PENSION ACCOUNT HOLDERS The facility offered to pension account holders (minimum balance clause for saving account not applicable for pension accounts) will be extended to the non-pension account holders also who are sick / old / incapacitated and are not willing to open and operate joint accounts. 11.3 DISHONOUR / RETURN OF CHEQUES Reserve Bank of India vide circular no. DPSS.CO.CHD.No.485/03.06.01/2010-11 dated September 1, 2010 has instructed Banks that the cheque return memo should

accompany a cheque dishonoured / returned for any reason duly signed by the Branch official indicating the date of return in the cheque return memo. 11.4 DISHONOUR OF ELECTRONIC FUNDS, TRANSFER FOR INSUFFICIENT OF FUNDS IBA vide letter no. PS&BT/GOVT/4195 dated 3rd October 2011 have directed as under: “The provisions contained in Section 25 of the Payment and Settlement Systems Act,

2007 accord the same rights and remedies to the payee against dishonour of

Electronic Funds Transfer as are available to the payee under Section 138 of the

Negotiable Instruments Act, 1938. The sub-section (5) of the Section 25 of the

Payment and Settlement Systems Act, 2007 provides for punishment of 2 Years and

twice the amount of Electronic Funds Transfer or both for dishonor of electronic Funds

Transfer as has been stipulated for dishonor of Cheques under the Negotiable

Instruments Act, 1938. The Payment and Settlement Systems Act, 2007 accords legal

recognition to electronic payment systems and legal recourse to a beneficiary

expecting electronic funds transfer.”

It is evident from the above that Electronic Funds Transfer system has right to and

remedies against the drawer of the instrument. Hence all the field functionaries are

advised to popularize the EFT System by explaining to the customers that users of

EFT are not in any inconvenient position vis-à-vis the users of cheque payment system

in so far as honor of payment instructions are concerned. The Payment and

Settlement Systems Act, 2007 accords legal recognition to electronic Funds Transfer

System and legal recourse against the drawer.

Banks shall encourage the customers for e- Governance by using electronic mode i.e. RTGS, NEFT or ECS, Debit Cards as it saves the expenditure and reduces use of paper which is in the national interest on environment front and it improves productivity besides reducing risk. 12. DEALING WITH INCIDENCE OF FREQUENT DISHONOUR With a view to enforce financial discipline among the customers; the bank will deal as follows: In the event of dishonour of a cheque valuing rupees one crore and above drawn on a particular account of the drawer on four occasions during the financial year for want of sufficient funds in the account, no fresh cheque book would be issued. Also, the bank may consider closing current account at its discretion. However, in respect of advances accounts such as cash credit account, overdraft account, the need for continuance or otherwise of these credit facilities and the cheque facility relating to these accounts should be reviewed by appropriate authority higher than the sanctioning authority. For the purposes of introduction of the condition mentioned at (i) above in relation to operation of the existing accounts, bank may, at the time of issuing new cheque book, issue a letter advising the constituents of the new condition. If a cheque is dishonoured for a third time on a particular account of the drawer during the financial year, banks should issue a cautionary advice to the concerned constituent drawing his attention to aforesaid condition and consequential stoppage of cheque facility in the event of cheque being dishonoured on fourth occasion on the same

account during the financial year. Similar cautionary advice may be issued if a bank intends to close the account. 13. WRITING OF CHEQUES IN ANY LANGUAGE : The bank will accept cheques written in Hindi, English or in the concerned Regional language. The branches should accept the cheque with Saka Calender date. 14. SWITCHING BANKS BY CUSTOMERS There is no bar on switching of Banks by Customers. The customer has a choice to switch to any of our account within 14 days for Current / Savings Account and no charges will be levied. The customer may close the Saving or Current account, within three working days of receiving the instructions, subject to customer completing all formalities and submitting all required documents. 15 SETTLEMENT OF DEATH CLAIM Any claim of money of a deceased depositor will be settled as per Death Claim Policy of the Bank. In case of deposit accounts opened with the nomination facility recorded payment of the balance of the deceased depositor’s account will be made to the nominee. Nominee named therein will be holding the death claim settlement as a trustee of the legal heirs of the deceased. In case of deposit accounts where the account was opened with the survivorship clause (Either or Survivor, `Anyone or Survivor’, `Former or Survivor’ or `Latter or Survivor’) or in case where the depositor had utilised the nomination facility and had made a valid nomination - payment of the balance of the deceased depositor's account will be made to the survivor(s) / nominee without insistence on production of legal representation. If the legal heirs of the deceased depositor prefer any claim on the disposal of the money of the deceased – it will be in order for the Bank to inform them that unless they obtain and serve on the Bank an order from a competent court restraining the Bank from effecting such payment to the survivor/s Or to the nominee, the Bank will be within its rights to act as per the original mandate. 15.1 SETTLEMENT OF CLAIMS IN RESPECT OF FIRST DEPOSIT HOLDER - PAYMENT OF PREMATURE PROCEED TO JOINT ACCOUNT HOLDER/ NOMINEE UNDER “ DENA MAHA TAX BACHAT YOJANA “ In Case of Joint Holder of Deposit : In the event of Death of the first holder of the Joint Account - as per the mandate, the other holder of the deposit shall be entitled to encash the Term deposit before its maturity by making application to the Branch Manager, supported by proof of death of first Holder of the Deposit account. Right to Nominee : In the event of the death of the holder of Term deposit in respect of which a Nomination is in force, the nominee shall be entitled at any time before or after the

maturity of the Term deposit to encash the Term deposit . Branches to follow the existing Death claim Policy of the Bank. The Surviving Nominee or Nominees shall make an application to the Branch Manager supported by proof of Death of the holder and of deceased nominee or nominees, if any. If there is more than one nominee than all the nominees shall give a joint discharge of the receipt at the time of receiving the payment. While making the Payment it should be mentioned on the receipt and acknowledged by Nominee that “Nominee is receiving the payment as Trustee to Legal heirs of the account holder” Payment to Legal Heirs: If a holder of Term Deposit dies without any nomination the payment is to be made to his/ her legal heirs as per existing Death Claim Policy. 15.2 SETTLEMENT OF CLAIMS IN RESPECT OF MISSING PERSONS Bank will follow the following system in case a claim is received from a nominee / legal heirs for settlement of claim in respect of missing persons. The settlement of claims in respect of missing persons would be governed by the provisions of Section 107 / 108 of the Indian Evidence Act, 1872. Section 107 deals with presumption of continuance and Section 108 deals with presumption of death. As per the provisions of Section 108 of the Indian Evidence Act, presumption of death can be raised only after a lapse of seven years from the date of his/her being reported missing. As such, the nominee / legal heirs have to raise an express presumption of death of the subscriber under Section 107/108 of the Indian Evidence Act before a competent court. If the court presumes that he/she is dead, then the claim in respect of a missing person can be settled on the basis of the same. Considering the legal opinion and taking into account the facts and circumstances of each case, Bank will settle the claim in respect of missing persons on the basis of each case. In addition to the documents required under the Death Claim Policy as per threshold limits of claim, Claimant/s will submit FIR and the non-traceable report issued by Police Authorities and letter of indemnity. 16) INTEREST PAYMENTS & AUTOMATIC RENEWAL: Mandate from depositors for disposal of deposits on maturity may be obtained in the application form itself. Wherever such instructions are not obtained, branches should ensure sending of intimation of impending due date of maturity well in advance to their depositors in order to extend better customer service. 16.1 MANDATE GIVEN: If mandate is given by the Depositor, Automatic Renewal is allowed for the period mandated in the Account Opening form. 16.2 MANDATE NOT GIVEN: If mandate is not given, automatic renewal is permitted. The renewal will be made for

the same period of time as the matured deposit at the prevailing rate of Interest on the

date of renewal.

If part payment of Overdue Term Deposit is renewed, Overdue interest would be paid on the entire Maturity value. 17. DEDUCTION OF TAX: The Bank has statutory obligation to deduct tax at source if the total interest paid / payable on all term deposits held by a person exceeds the amount specified under the Income Tax Act. The Bank will issue a tax deduction certificate (TDS certificate) for the amount of tax deducted. Now as per the guideline of IBA ( letter no. CIR/RBI/DTS/4359 dated 31.10.2011) all the branches are requested to send the Tax Deducted Source Certificate duly signed by Branch officials to the customers by Post. If it is returned back by post for want of proper address, short address, the customer should be contacted & correct address to be updated in finacle after receiving the adequate address proof. If the customer demands to receive the certificate personally the same should be issued to him. The interest earned on term deposits after deducting Tax may be mentioned in their Savings / Current Account. The depositor, if entitled for exemption from TDS can submit a declaration (claiming exemption) in the prescribed format at the beginning of every financial year. Customers to provide valid Permanent Account Number (PAN) in Form 15 G/ 15H if they desire to avail Tax benefits. Branches are advised to give an acknowledgment at the time of receipt of Form 15-G/15-H. This will help in building a system of accountability and customers will not be put to inconvenience due to any omission on part of the banks.

RBI has issued notification vide letter No. DGBA.GAD.NO. H -3900/42.01.001/2011-12 dated 21 December 2011 by which now it is mandatory for all the deductors to furnish particular of amount paid or credited on which tax was not deducted in view of the furnishing of declaration in 15G/ 15H forms under sub section (1) or sub section (1A) or sub section ( 1C) of section 197A by the Payee. Such transactions are required to be reflected in TDS Statement by flagging such trasaction with appropriate flag( Flag B ) as provided in Form 26Q. Branches are advised to provide TDS Certificate in Form 16A to the customers within the time-frame prescribed under the Income Tax Rules. Braches should avoid waiting till the last moment. 18. ADDITION OR DELETION OF THE NAME/S OF JOINT ACCOUNT HOLDERS: The Bank may, at the request of all the joint account holders allow addition or deletion of name/s of joint account holder/s. Bank will allow an individual depositor to add the name of another person as a joint account holder. However, in no case should the amount or duration of the original deposit undergo a change in any manner in case the deposit is a term deposit. Bank may, at its discretion, and at the request of all the joint account holders of a deposit receipt, allow the splitting up of the joint deposit, in the name of each of the joint account holders only, provided that the period and the aggregate amount of the deposit do not undergo any change. NRE deposits should be held jointly with non-residents only. NRO accounts may be held by non-residents jointly with residents.

19. CUSTOMER INFORMATION: Information collected from the customers will not be used for cross selling of services or products by the Bank their subsidiaries and affiliates. If the Bank proposes to use such information, it will be done strictly with the consent of the account holder. 19.1 SECRECY OF CUSTOMER'S ACCOUNTS: The Bank will not disclose details / particulars of the customer's account to a third person or party without the expressed or implied consent from the customer. However, there are some exceptions to this, viz. 1. Disclosure of information under compulsion of law, 2. Where there is a duty to public to disclose and 3. Where interest of the Bank requires disclosure.

20. PREMATURE WITHDRAWAL OF TERM DEPOSIT: The Bank, at its discretion, may allow premature withdrawal of term deposit before completion of the period of the deposit requested and agreed upon at the time of placing the deposit. The Bank will charge penal interest rates as per policy for premature withdrawal of term deposit in force from time to time. In no case, the rate of interest on premature withdrawal of Term Deposit shall be higher than the contractual rate even if the rate as per the Card Rates works out to be higher than the contracted rate Such situation may arise when the rate of interest for lesser maturities is more than the rate of interest for longer maturities and customer wants premature withdrawal. 20.1 UPTO RS 1 CRORE : Premature withdrawal upto Rs 1 crore is allowed in normal circumstances before completion of the period of the deposit Bank shall not charge penalty for premature withdrawal of term deposit up to one year maturity 20.2 Rs 1 CRORE TO Rs 10 CRORES : In case of Individual and HUF, the Bank may allow premature withdrawal of deposits. In case of Term Deposits of Rs. 1 to 10 Crores of the entities other than Individuals and Hindu Undivided Families (HUF), the Bank will not allow premature withdrawal in normal circumstances. However, in exceptional circumstances and also considering the prevailing market conditions, liquidity position and existing / potential business relationship with entities, the General Manager (Treasury) is empowered to decide on the request for premature withdrawal of deposits with the penalty from such entities. 20.3 ABOVE Rs 10 CRORES In case of Individual and HUF, the Bank may allow premature withdrawal of deposits. In case of Term Deposits of Rs.10 Crores and above of the entities other than Individuals and Hindu Undivided Families (HUF), the Bank will not allow premature withdrawal in normal circumstances. However, in exceptional circumstances and also considering the prevailing market conditions, liquidity position and existing/potential business relationship with entities, the Chairman & Managing Director or Executive Director is empowered to decide on the request for premature withdrawal of deposits from such entities along with the rate of penalty.

The penalty for Premature Withdrawal of Term Deposit for amount above Rs. 1.00 Crore and upto Rs.10 crores is – 1 % below the applicable interest rate for the period the deposit remained with the bank.

The Bank shall not charge any penalty for premature withdrawal of Term Deposit ( Single Deposit ) of above Rs. 10 crores if the maturity period is up to one year. Chairman and Managing Director or Executive Director at his / her discretion is empowered to decide waiver on such aforesaid premature withdrawal penalty, considering the value and business potential of the account, justification put forth by field functionaries etc.

20.4 To allow part withdrawal of Term Deposits

At present, if the customer needs part amount for his/her immediate requirement, he has to withdraw the whole amount of term deposit and re-invest the remaining portion of the term deposit afresh and the premature withdrawal penalty is also charged on the full amount.

The facility of part withdrawal before maturity of the Term Deposits is now made available to customers and no penalty will be charged on undrawn deposit even if the TDR is broken. The undrawn amount of deposits will be continued at the original contracted rate.

In case the undrawn amount reduces below Rs. One crore, it will carry revised rate of Interest as per card rates.

However, partial amount withdrawn will attract penalty wherever applicable as per prevalent guidelines and subject to applicable interest rate.

21. DEATH OF DEPOSITOR: In the event of death of depositor, premature termination of Term Deposit would be allowed and such premature withdrawal would not attract any penal charge 22. CONVERSION OF TERM DEPOSITS / RECURRING DEPOSIT FOR REINVESTMENT IN TERM DEPOSIT As per guidelines of Reserve Bank of India dated April 20, 2010, Bank should allow conversion of Term Deposits/Recurring Deposits to enable depositors to immediately reinvest the amount lying in the aforesaid deposits with the same branch in another Term Deposit. The interest should be paid at the rate applicable for the expired period only without levying any penalty provided the deposits remains with the branch after reinvestment for a period longer than the remaining period of original contract. 22.1 WITHDRAWAL OF TERM DEPOSITS FOR REINVESTMENT FOR LONGER MATURITY : Sometimes because of an upward change in rates of interest, customers approach the Bank for renewal of the deposit receipt before due date for longer maturity in order to take advantage of the revised rates. Such a request may be treated as ‘Extension of Deposit’ and acceded to. Interest for the expired period of the deposit should be paid at the rate applicable for the expired period only. The penalty of premature withdrawal may not be imposed in respect of deposits up to Rs.1 Crore per receipt. However the premature penalty will be in force for the deposit above Rs. 1 crore.

However, for Term Deposit of Rs 1 crore and above, Chairman and Managing Director or Executive Director at his / her discretion can waive the penalty for premature withdrawal of term deposit for reinvestment for longer maturity. The Term deposit , however be renewed for a period longer than the unexpired period of the original deposit. It may be noted that interest on deposit for the period it has remained with the Bank will be paid at the rate applicable to the period for which the deposit remained with the Bank and not at the contracted rate. Premature withdrawal of a deposit will be allowed for Staff / Ex-staff for any number of times subject to interest will be paid for the period up to which the deposit has remained with the Bank with minimum 15 days (for term deposit below Rs. 1.00 lac) and 7 days (for term deposit Rs. 1.00 lac & above) at a time without levy of penalty for premature withdrawal of deposits. 23. RENEWAL OF OVERDUE TERM DEPOSITS 23.1 RENEWAL OF TERM DEPOSIT ON THE DATE OF MATURITY: When a term deposit is renewed on maturity, on renewed deposit interest rate for the period specified by the depositor as applicable on the date of maturity would be applied, if the request is received within 14 days of maturity. 23.2 RENEWAL OF OVERDUE TERM DEPOSITS IF PRESENTED AFTER 14 DAYS OF MATURITY: "If the Term Deposit is presented for renewal after 14 days of maturity, the deposit will be renewed from the date of presentation and rate of interest ruling on the date of presentation will be applicable. Interest for the overdue period will be paid at the rate prevailing on the date of maturity or on the date of presentation whichever is lower. To claim overdue interest the deposit should be renewed for period for which deposit remained overdue or atleast one year if the deposit is remained overdue for more than one year . However, it will be ensured that interest Paid for the overdue period will not be less than the prevailing Savings Bank rate. In the event of overdue interest is Paid and the depositor prematurely encashes the deposit within 15 days after the renewal the excess interest paid for overdue period over and above the Savings Bank rate, will be recovered When a term deposit is renewed on maturity, on renewed deposit interest rate for the period specified by the depositor as applicable on the date of maturity would be applied, if the request is received within 14 days of maturity. If part payment is to be renewed, the interest for the overdue period shall be paid on the Maturity value of Term Deposits 23.3 OVERDUE TERM DEPOSIT NOT RENEWED BUT ENCASHED: It the overdue Term Deposit is not renewed but it is encashed, Bank will pay Savings Bank Interest on overdue Term Deposit till the dat