This page is informational and is not legal advice. It describes rules, orders and rulings as published or reported on the dates shown; read the primary text before relying on any of it.
A pigmy account is usually small, held by one person, and collected in cash by someone who knows the household. When the depositor dies, the family's question is not what the balance earned but how hard it will be to get it out. Since 26 September 2025 there is one answer for every bank, including every co-operative bank: the Reserve Bank of India (Settlement of Claims in respect of Deceased Customers of Banks) Directions, 2025, which banks had to implement "not later than March 31, 2026".
The Directions replace sixteen earlier circulars, including the 2005 simplification circular that most banks' own policies were written from. If a branch quotes an older practice, it is quoting something that has been repealed.
The two numbers that decide everything
| Co-operative bank | Other banks | |
|---|---|---|
| Simplified procedure, no court document needed, up to | ₹5,00,000 | ₹15,00,000 |
| Settlement deadline, once documents are complete | 15 calendar days | 15 calendar days |
| If the bank is late | Interest at not less than Bank Rate + 4% a year | The same |
A bank may fix a higher limit than the one above; it may not fix a lower one. The co-operative figure is a third of the commercial one, which matters because the institutions that run daily collection are mostly co-operative banks — and because a household may hold more than the pigmy account at the same bank.
For a pigmy balance the threshold is rarely the binding constraint. At the daily minimums these institutions publish, from ₹10 to ₹100, three years of unbroken collection reaches a fraction of ₹5,00,000; our maturity calculator will show the figure for a given amount and term. The document list, not the ceiling, is what usually delays a family.
With a nomination
This is the short path, and it is the reason to record a nominee when the account is opened rather than later. The bank asks for a claim form, the death certificate, and an officially valid document identifying the nominee. Nothing more is needed for the balance to be released, and the 15-day clock starts once those are in.
Our checklist for opening an account treats nomination as a question to settle at the counter, on the day, in writing.
Without a nomination, and without a survivorship clause
The simplified procedure still applies below the threshold, but the paperwork is longer. The Directions list a claim form in the prescribed annexure, the death certificate, an officially valid document for each claimant, a bond of indemnity, a letter of disclaimer or no objection from every legal heir who is not claiming, and either a legal heir certificate from a competent authority or a declaration by an independent person acceptable to the bank.
Above the threshold, the bank may require a succession certificate, probate or an equivalent order, which is a court process with its own timetable. That is the gap the nomination closes.
If the bank is slow
Delay is not a matter of goodwill. The Directions require compensation: interest at not less than the Bank Rate plus 4% a year for the period beyond 15 days on a deposit claim, and ₹5,000 for each day of delay on a locker claim. The compensation is the bank's obligation, not a favour.
If it is not paid, or the claim stalls, the escalation route depends on the institution, and for most co-operative banks it ends at the RBI Ombudsman: where to complain sets out the test and the deadlines.
If the institution is a society
The Directions apply to commercial banks and co-operative banks. A credit co-operative society, a patpedhi, a Souharda society or a Nidhi company is outside them, exactly as it sits outside deposit insurance. What happens to a deceased member's balance is governed by the state co-operative law and the society's own bye-laws, which differ between states and between societies.
This is the same line that decides whether the balance is insured and which forum hears a complaint, and it is worth establishing before opening an account rather than during a bereavement.
The collection that was in progress
One question these Directions do not answer is what happens to cash an agent collected but had not yet credited when the depositor died. The Directions govern the balance in the account; the collection round is governed by the bank's own arrangement with its agent, which our guide to how collection works describes. The receipt in the passbook is the family's evidence of what was paid in, which is the practical argument for keeping it.
What we could not establish
- How many nominees a co-operative bank may record. The Directions do not address nomination mechanics, and we have not read the current nomination rules directly.
- Whether banks are meeting the 15-day deadline, which nothing we read publishes.
- What a society's bye-laws typically say about a deceased member's deposit. It varies by state and by society, and we will not generalise from the ones we have not read.
- Whether any institution applies a different rule to daily-deposit accounts than to other deposits on death. No page we reviewed distinguishes them.
Questions
- How long does a bank have to pay a deceased depositor's balance?
- Fifteen calendar days from the date it receives all the required documents. If it takes longer, the Directions require it to compensate the claimant with interest at not less than the Bank Rate plus 4% a year for the period of delay. The clock starts at complete documents, not at the first visit, which is why the document list matters.
- Does the family need a court order?
- Usually not, for a pigmy-sized balance. Where there is no nomination and no survivorship clause, banks follow a simplified procedure up to ₹5,00,000 at a co-operative bank and ₹15,00,000 at other banks, or a higher limit the bank itself sets. Above that, a succession certificate or equivalent is required.
- Does this apply to a credit society or patpedhi?
- No. The Directions apply to commercial banks and co-operative banks. A society that holds no banking licence is not covered, and what happens to its members' balances is governed by the state co-operative law and the society's own bye-laws.