As you all know now-a-days whenever we request any sort of statement / report etc. from non-banking financial companies (NBFCs) i.e. insurance, chit fund, merchant banking, stock broking service providers etc. they provide us computer generated with the Legend that “This is a computer generated paper advice / receipt and does not require a signature”.
Similarly some banks also on deposit of money for fixed terms started issuing computer generated signed Fixed Deposit Advice whereas few banks issue Fixed Deposit Advice (in lieu of Fixed Deposit Receipt). In case unsigned then with the Legend “This is a computer generated paper advice / receipt and does not require a signature” which is not as per law hence illegal act as no such order was issued by Reserve Bank.
Will Bank accept our advice for any purpose on plain paper bearing same line at bottom that “This is a computer generated paper advice/receipt and does not require a signature”? Answer is No then why is it one sided?
In fact banks, for their convenience, uses “This is a computer generated paper advice/receipt and does not require a signature “at the legend of all sort of correspondences including FD advices which creates a lot of problems in certain situation at later stage.
As you all know Fixed Deposit Receipt is always duly signed by the authorized officer and requires to be returned either for maturity payment or with specific instruction if we wish to get renewed at maturity whereas in case of Advice banks honour renewal instruction i.e. without taking back advice.
Further one may take a loan by pledging FD receipt after completing due process but in case of advice bank is not supposed to grant loan.
Please remain informed that no Central / State Government department will accept signed FD advice as security though they do not raise any objection on signed Fixed Deposit Receipt which is considered a debt instrument i.e. can easily be offered for security. Hence advice is nothing but an intimation and is not an assignable document.
You might have observed that maturity payment form contains one clause seeking indemnity from FD customer against the possible fraudulent use of this fixed deposit though customer is not informed appropriately and explicitly of such a condition at the time of accepting such deposit/s (that he has to sign such an indemnity for getting his own money back, against such non-transferable deposit).
Moreover every bank FD is NON-TRANSFERABLE besides loan is permitted only after due pledge process with a right to bank to set off any dues. Hence customer should be permitted to strike off this clause if he has not taken any loan by pledging it any time during FD period.
Further remain informed that advice letter can easily be printed by anyone mischievous whether it is internal or external very easily using mobile or computer because it is on non-secure paper and unsigned hence fraudulent chances are there.
Lastly, RBI should note that Banks are issuing FD Advices for their own convenience but it creates a lot of problems / hurdles to customers.
Considering all above, a Fixed Deposit Receipt should always be issued because without returning this duly signature neither one can pledge for loan purpose nor for maturity payment besides possibility of fraud gets minimised.
Trust readers, in their own interest, will think over above facts in-depth and share their ideas for further improvement.
Goverdhan Das Binani
Jai Narayan Vyas Colony,
9829129011 / 7976870397