Type of deposits deposit schemes of the bank

Oriental Bank Of Commerce

Department of Information Technology

Head Office, New Delhi

Manual for

Term Deposits

Manual for Term Deposits –Department of Information Technology, Head OfficePage 1 of 26

4. TYPES OF DEPOSITS DEPOSIT SCHEMES OF THE BANK

As of now, the Bank offers the following deposit schemes.

1. Progressive Deposit (PD)2. Variable Progressive Deposits3. Margin Money Deposit4. Fixed Deposits5. Monthly Income Deposit Scheme6. Cumulative Deposits7. Suvidha Deposit Scheme8. Flexi Fixed Deposit9. Tax Saving Term Deposit10.Capital Gains Exemption Deposit Scheme-1999 (Since Withdrawn)11.Capital Gain Accounts Scheme 1988 (Account-B)

Depending on the liquidity position, other term deposit schemes are also floated by the bank from time to time for short-term deposit mobilization. These schemes are not being incorporated here because of their temporary nature.

4.1. CASH CERTIFICATE AND PENSION DEPOSIT SCHEME HAS BEEN WITHDRAWN W.E.F. 01.09.98

4.2. CALL DEPOSITS

4.2.1. This kind of deposits is treated as borrowings. These deposits are accepted from other Banks or other approved institutions. As the name indicates, they can be recalled by the lending bank/ institution or repaid by the borrowing bank any time. The rate of interest is usually low except when money market is tight.

4.2.2. These call deposits are not treated as deposits for accounting purpose and the same are treated as borrowings.

4.2.3. Call deposits cannot be accepted from the public.


4.2.4. Branches shall not accept such deposits unless Head Office authorizes them for this purpose.

4.2.5. Sometimes bank places its surplus funds as call deposit with other Banks in which case, it should be placed under the head ‘Money at call and short notice’. The Head Office from time to time notifies branches that can borrow or lend money as such.

4.2.6. Branches shall not place any such deposits with other banks or approved institutions unless authorized by Head Office.

4.3. PROGRESSIVE DEPOSIT (PD)

4.3.1. A progressive deposit account may be opened on submission of duly filled application on prescribed Account Opening Form and complying with KYC guidelines as detailed in Chapter 9.

(a) By a person in his/ her own name.

(b) By more than one person in their joint names (maximum three), payable to all of them jointly or to either or survivor, former/ latter or survivor or any one of them, or to the survivor or any or more of the survivors amongst them, specific instructions in this regard are required to be given in writing at the time of opening the account.

(c) By a minor of the age of 10 years and above in his/ her own name on furnishing a certificate regarding date of his/ her birth. Account may also be opened in the name of minor under the guardianship of his/ her father or mother as discussed in Chapter 9.

(d) In the names of clubs, associations, educational institutions, and such other bodies who are permitted to open S.B. account provided they are registered and the bank is satisfied that the account is opened for genuine saving purposes.


4.3.2. At the time of opening the account, the depositor shall specify in the AOF, the amount of monthly instalment and the total number of such instalments payable by him and shall not subsequently be allowed to alter or vary them.

4.3.3. The minimum period for which progressive Deposit Account can be opened is six months and maximum period is 10 years or as advised by Head Office from time to time.

4.3.4. Progressive deposit account may be opened for monthly instalment of Rs.10/- or exact multiples of Rs.5/-.

4.3.5. The installment for any calendar month shall be paid on or before the last working day of that month failing which interest will be charged on the instalments in arrears at the rate of Rs.1.20 per hundred rupees per month or as advised by Head Office from time to time.

4.3.6. All installments to be paid should be accompanied by Pay-in-slips. The depositor can pay his/ her monthly instalments by cash or by transfer from his/ her savings /current account. The depositor’s standing instructions to transfer monthly instalment of PD A/c from his/ her savings or current account, should be accepted and recorded in the Computer System. Such a transfer is effected free of charge. In case the depositor fails to maintain sufficient balance in his/ her account to affect such a transfer, the standing instructions, be treated as cancelled and the instalment should be deemed to have fallen in arrears.

4.3.7. The depositor can however, pay any number of installments in advance.

4.3.8. Progressive deposit accounts should be entered and verified in the Computer System as per the procedure advised by CBS, Head Office. Complete details viz. name & address of the depositor, amount of instalment, period of deposit, rate of interest, maturity value, standing instructions, if any, nomination etc. should be given in the system.

4.3.9. When an account is opened in the joint names of two or three persons and the amount is payable to anyone or to the survivor (s) an appropriate note thereof should be made in the system.


4.3.10. Every depositor should be provided with a passbook of his/ her account. The passbook must be produced at the time of taking the payment on maturity. Pass Books duly completed should be promptly delivered to the depositors against their signatures in the Pass Book Received Register. If the passbook is lost, charges for the issuance of a duplicate passbook shall be recovered as in the case of Saving Bank accounts. Any change of address must be notified to the Bank immediately along with proof of same, for making necessary correction in the books of the Bank.

4.3.11. Interest on progressive deposit accounts is calculated on quarterly compounded basis and credited in the respective account on quarterly basis by the CBS Cell.

4.3.12. Interest paid/ provided under the scheme shall be debited to separate subhead- interest paid- PD accounts. TDS is not applicable for interest payment under this scheme.

4.3.13. The Bank may at its discretion and on application being made by the depositor, allow a loan to the depositor upto a maximum of 95% of the amount deposited with a minimum of Rs.200/-. Interest on such advances is to be charged @ 1% p.a. over and above the deposit rate applicable to the particular deposit or as advised by Head Office from time to time. The loan can be disbursed after obtaining approval of Branch Manager and completion of documentation formalities and charging of security as applicable to advances against bank deposits.

4.3.14. After all the stipulated instalments are paid, maturity value i.e. the accumulated amount with interest shall be paid to the depositor on due date or one month after the last instalment has been paid, whichever is later. Progressive Deposit account maturing on Sunday or bank holiday will be payable on the next working day. The withdrawal of the proceeds can be permitted as per instructions of the depositor i.e. either by way of cash (keeping in view the amount permissible as per Income tax rules) or by transfer to the account of the depositor. For making payment by way of cash, proforma of receipt (specimen given below) enclosed in the Progressive Deposit Account passbook should be got filled in from the depositor and his/ her signatures obtained at the appropriate place (Revenue stamp be affixed as per Indian Stamp Act 1899). In case proceeds of matured Progressive Deposit Account are required to be credited in account (SB/ CA) of the depositors, an application to this effect should be obtained. Before making payment of the


proceeds, the signatures of the depositor on the payment voucher/ request letter have to be verified by the authorized Officer /Special Assistant with that on the Account Opening Form. After verification it shall be posted in the respective account of the depositor in the Computer System and passed for payment by an authorized official/ Special Assistant.

PROFORMA OF RECEIPT

“Received from the Oriental Bank of Commerce ________________ branch, in full settlement, the sum of Rs.________________ in respect of my progressive deposit account no._____________.

Date: Signature of the Depositor

4.3.15. Deposits which are not withdrawn on due dates shall be transferred to overdue progressive deposit account and shall thereafter earn no interest. When an overdue amount is paid, the necessary entries are made in the respective account in the computer system as per procedure and verified by supervising official.

4.3.16. Normally, the amount shall be repayable only on maturity, but if the depositor wants to withdraw the amount before its maturity or the bank closes the account in which the instalments are frequently not regularly paid, the amount already deposited will be repaid to the depositor and the interest thereon shall be calculated for the period the amount remained with the bank, at the rates as applicable for term deposits/ as advised by Head Office from time to time.

4.3.17. In case of death of a sole depositor or any one or more of the joint depositors, the account shall be dealt with as a claim case. However, in case, a deposit is payable to either or survivor the amount may be paid to the survivor or if a nomination has been made by the depositor during / her lifetime then the bank can get valid discharge by paying the amount to the nominee. The interest on such accounts shall, however, be paid for the period, the deposit remained with the bank (but not


exceeding the period for which the deposit was originally made) at the rates as advised by Head Office.

4.3.18. Outstanding balances in the progressive deposit should be generated from the system and tallied with the General Ledger once a month.

4.3.19. Progressive deposit accounts are not transferable, from one person to another. They can however, be transferred from one branch to another on a written request from the depositor. The procedure will be the same as is being followed in the case of Savings Bank accounts.

The following particulars must be advised to the transferee branch while transferring the accounts.

Standing instruction, if any. Photocopies of the A.O.F. and the relevant documents as per KYC norms.

4.4. VARIABLE PROGRESSIVE DEPOSITS (OBC Aadhar)

4.4.1. Variable Progressive Deposit scheme was launched by the bank and conveyed to branches/ offices vide Cir. No. HO/P&D/92/1/309 dt. 17.01.1992.

4.4.2. The Variable Progressive Deposit scheme has been re-launched under a new name i.e. ‘OBC Aadhar’ w.e.f. 23.11.2009. The scheme is similar to Progressive Deposit except for few features:

a) Amount of installment: Depositors have to choose a core monthly installment which can be Rs.10/- or above, with a maximum of Rs.50, 000/- p.m. Monthly installments paid during the tenure of the deposit account shall not exceed in any month, ten times of the core amount or Rs.50, 000/-, which ever is less.

b) Period of deposit: Accounts can be opened for periods from 12 months to10 years.


4.5. MARGIN MONEY DEPOSIT

4.5.1. These deposits are accepted as margin for bank guarantee or letter of credit issued or for any other purpose from customers and are treated as current account without earning any interest on it.

4.5.2. However, these margin deposits can be held under any term deposit scheme of the bank, in which case it earns interest at applicable rates. Bank permits the margin money to be held under any of its deposit scheme provided it is duly pledged to the bank.

4.6. FIXED DEPOSIT

4.6.1. Fixed deposits are deposits received by the bank for a fixed period and are generally withdraw able after expiry of fixed period.

4.6.2. At present minimum period prescribed for acceptance of deposit under Fixed Deposit Scheme is 7 days and maximum period is 10 years.

4.6.3. Fixed deposits carry simple rate of interest. Interest is credited to respective Fixed Deposit Account on quarterly basis. Interest accrued during the whole or part of quarter can be paid in cash or credited to SB/ CA/ PD account of the depositor at any time, after the close of quarter after making necessary entries in the Computer System and getting these verified from authorized officer. While doing so, suitable remarks, indicating the amount paid and the relative quarter must be endorsed on the back of Fixed Deposit Receipt in case a depositor visits the bank personally for getting payment of interest in cash.

4.6.4. Depositor may also leave instruction for credit of interest to his/ her savings or current account. Branches shall seek instruction form the depositor at the time of accepting the deposit about the mode of payment of interest.


4.7. MONTHLY INCOME DEPOSIT SCHEME

Monthly income scheme has been formulated in view of the need of the depositors for ensuring regular monthly income of a fixed amount. Depending upon the applicable rate of interest at the time of making deposit in bank, certain amount is deposited by the customers for a fixed period for earning a fixed amount of monthly income.

4.7.1. Monthly Income Deposit Scheme is similar to Fixed Deposit Scheme except for the following:

Period of Deposit

Minimum 12 months and any other period in multiples of 3 months upto 120 months maximum.

Rate of Interest: - As applicable to Term Deposits.

4.7.2. General Instructions

Fixed amount has to be deposited for getting specified amount of monthly income. On maturity of the deposit receipt, the monthly income shall cease unless, of

course, the receipt is renewed. The income payable monthly shall be credited to customer’s nominated account

every month. Principal amount cannot normally be withdrawn before expiry of maturity period

except under exceptional circumstances. Interest shall be paid for the period, the deposit remained with the bank at the applicable rates of interest/ rate of interest as advised by Head Office from time to time on premature withdrawal of Term Deposit Receipts. Excess amount, if any, paid in the form of monthly income till the date of encashment of deposit receipt shall be deducted out of the principal amount.

Monthly income should be continued only during the lifetime of the depositor and on his/ her death the contract must be terminated.

In the case of death of a sole depositor or any one or more of the joint depositor, the account shall be dealt with as a claim case. However, in case, a deposit is


payable to either or survivor the amount may be paid to the survivor or if a nomination has been made by the depositor during his/ her lifetime then the bank can get valid discharge by paying the amount to the nominee.

The interest on such accounts should, however, be paid for the period, the deposit has remained with the bank (but not exceeding the period for which the deposit was originally made) at the rates circulated by Head Office from time to time.

Monthly Income Deposit accounts are not transferable, from one person to another. They can however, be transferred from one branch to another on a written request from the depositor. The procedure will be the same as is being followed in the case of Saving Bank Accounts.

For premature payment the rules are the same as applicable to Term Deposits. Loan can be granted against Monthly Income Deposit Receipt on the terms and

conditions approved by Head Office. Interest on deposits shall be calculated and paid, credited, transferred or

reinvested with frequency not less than the Quarterly rests. However, payment of monthly interest shall be by discounting the quarterly interest accrued.

4.8. CUMULATIVE DEPOSITS

Cumulative deposits also are deposits received by the bank for a fixed period and are generally withdraw able after expiry of fixed period. Interest on cumulative deposits is deemed to have reinvested. Interest is calculated on quarterly compounded basis and the maturity value of the deposit is mentioned on the term deposit receipt along with the due date of payment. As such, quarterly interest cannot be paid to the depositor on cumulative deposits, as the same stands reinvested under the scheme.

Minimum period of deposit: Six months

Maximum period of deposit: 120 months (in multiples of 3 months)

4.8.1. Cumulative Deposit Scheme was introduced in our bank in December 1974 (Dev. Cir. No. 87 dated 16.12.1974). At that time the scheme provided for compounding of interest on monthly basis. Deposit under the scheme was accepted for period ranging from 61 months to 20 years and the amount of deposit under the scheme was accepted in multiples of Rs.500/-. The provision of interest was done on half yearly basis.

4.8.2. Vide Dev. Cir. No. 26(Group-III) dated 28.04.1975 the maximum period of deposit under the scheme was extended to 21 years from 20 years. Branches were also


advised to affix the following stamp on AOFs and obtain signatures of the depositors.

“Please accept deposit under your Cumulative Deposit Scheme with reinvestment of monthly interest upto the maturity of deposit”

4.8.3. The minimum period of deposit under the scheme was reduced to one year vide Dev. Cir. No.26 dated 24.08.1976. Except for this all other terms and conditions of the scheme were the same.

4.8.4. The scheme was revised vide Dev. Cir. No.102 dated 31.03.1978(effective on deposits received/ renewed as from 01.03.1978). The under noted changes were effected in the scheme:

i) The maximum period for which deposit can be accepted under the scheme was reduced from 21 years to 10 years.

ii)Deposits for period exceeding 12 months to be accepted for periods in multiples of 3 months only. For arriving at maturity value of the deposit, interest to be calculated at quarterly rests. However, interest payable to be credited to cumulative account on each half yearly closing.

4.8.5. The scheme was further revised Dev. Cir. No. 157 dated 13.12.1978 and the minimum amount of Rs.100/- was permitted to be accepted under the scheme. All other terms and conditions remained unchanged.

4.8.6. The minimum period for which deposit under the scheme could be accepted was reduced to 6 months vide Cir. No. P&D/16/87/154 dated 28.04.1987. All other terms and conditions remained unchanged.

4.9. SUVIDHA DEPOSIT SCHEME

4.9.1. As per the normal practice, the depositor (term deposit holder), in need of money before maturity, has two options i.e. either to raise loan against the deposit, or to


take pre-mature payment. If a customer raises a loan, he pays higher rate of interest and in case he takes premature payment of partial amount, the penalty on interest rate is levied on the entire amount. Thus the customer is at loss in both the cases.

4.9.2. Keeping in view the loss to be suffered by the customer in cases as above, SUVIDHA DEPOSIT SCHEME was introduced wherein Deposit Receipt are issued for the total amount of deposit (which is in multiple of units of Rs.1000/-). The customer is allowed to withdraw any number of units. The interest rate applicable on withdrawn amount shall be the rate applicable to the period for which the amount so withdrawn remained with the Bank. The remaining amount shall continue to earn interest at the contracted rate.

4.9.3. The details of the scheme are as under:

a) Value of each unit: - Rs.1000/-

b) Amount of deposit: -a minimum of Rs.2000/-: or more in multiples of Rs. 1000/-.

c) Period: - deposit may be accepted for a minimum period of one year or more in multiples of full quarter with maximum 10 years.

d) Rate of interest: -same as in other domestic term deposits/ as advised by the Head Office from time to time.

e) Partial withdrawals: - withdrawal of amount(s) kept in Term Deposits under Suvidha Deposit Scheme, in multiples of units of Rs. 1000/- shall not attract any penalty (w.e.f. 01.12.2000). The interest rate applicable on withdrawn amount shall be the rate applicable to the period for which the amount so withdrawn remained with the Bank. The remaining amount shall continue to earn interest at the contracted rate.

f) Loan/ overdraft against deposit: - No loan/ overdraft facility shall be allowed against deposits under this scheme.

g) Tax: - Tax on Interest shall be deducted as is being done on other domestic term deposits.

h) Opening of account: - For opening of account, procedure is the same as for other term deposits.


i) Withdrawal procedure: - The withdrawal of units shall be allowed in multiples of units. Interest on amount withdrawn shall be paid as per guidelines circulated by Head Office from time to time. However, before permitting withdrawal of units before maturity, a request letter shall be obtained from depositor along with the deposit receipt. Premature payment of the units shall be made as described under the head “Premature Withdrawal “ in this chapter.

4.10. Flexi Fixed Deposit

Flexi Fixed Deposit Scheme introduced by the Bank w.e.f. 1st November 2006 offers

liquidity in the shape of Savings/ Current deposit as-well-as higher returns as are

available on funds parked in fixed deposit. Moreover, there is also an element of

flexibility as the depositor can meet funds requirement without loosing interest,

since transfer of funds to Savings / Current account is made available as an in-

built arrangement whenever required by the depositor. The scheme enables a

depositor to get returns on his/ her funds as a fixed deposit but at the same time

retaining the character of liquidity, which is available in Savings Banks/ Current

Account.

In addition to the Account Opening Form, a Letter of Undertaking (Format II) and acknowledgement for Rules & Regulations (Format III) for carrying out the request for the fixed component of Amount and its Periodicity shall be obtained from the customer.

4.10.1. The main features of the scheme are as under:

Under the Flexi Fixed Deposit Scheme, Resident Indian customers have to open an operative Account (Savings or Current) under specific category as detailed below in Format-I.

Flexi Fixed Deposit accounts can be opened either singly or jointly.


To avail Flexi Fixed Deposit products, Staff, Ex-staff, Pensioners and Senior Citizens shall have to maintain accounts under this scheme. However, concession in minimum balance requirement and penalty thereon for not maintaining minimum balance will not be available to these categories.

Amount of Deposit - In case of new accounts, the initial deposit, as per the respective category under which the account is proposed to be opened, shall be the pre-requisite. In case of non-maintenance of minimum Average Quarterly Balance (as per Format - I), penalty as specified against each category of Savings / Current account shall be levied in the account.

Earlier, the deposit under the scheme was kept as fixed deposit but w.e.f 01.09.2008, depositor has option to choose between Fixed Deposit and Cumulative Deposit.

Period of Deposit: A deposit under the scheme shall be accepted for a period of 90 days to five years in flexi saving accounts (as per details given below) and for 15 to 45 days in flexi current accounts. By default, it is 90 days in flexi Saving accounts and 15 days in flexi Current accounts.

Payment of Interest: The amount invested in the scheme shall attract rate of interest prescribed by the Bank on domestic Term Deposits from time to time. Simple/ compounded interest shall be booked on quarterly basis but liquidation of interest will be as applicable for the respective scheme.

Staff / Ex-Staff and Senior Citizens shall be entitled for additional rates in

Flexi Fixed Deposits as applicable in Domestic Term Deposits (as applicable

to the category of depositor).

As per the extant rules, no premature payment penalty is levied if the amount of Single Deposit is up to Rs. 5 lacs. As such the provision of premature penalty shall be applicable on the amount of reverse sweep in case the amount held in Flexi Fixed Deposit (from which reverse sweep is made) is more than Rs. 5 lacs. The remaining balance of the FFD will continue to earn interest as per normal rate till maturity.

Facility of demand loan/ overdraft is not permitted.Format-I

Operative Requirement Penalty for not Auto Reverse Period of


accounts with CBS codes

of initial deposit / minimum average quarterly balance

keeping minimum average quarterly balance (per quarter) $

Sweep unit (sweep in)

Sweep unit (sweep out)

FFD

SB Smart Save –

Code SB 211

Rs.2 5000/- ## Rs. 150/- Rs. 5000/- ##

Rs. 2000/-

90 days to 5 years

Saving Smart Save Gold Scheme

Code SB 209

Rs. 50000/- Rs. 450/- Rs. 5000/-

Rs. 2000/-

90 days to 5 years

Current Account Premium Gold Scheme

Code CA 109

Rs. 200000/- Rs. 1000/- Rs. 25000/-

Rs. 25000/-

15 to 45 days

## Auto Sweep shall take place only after the cut off level of Rs. 25000/- in linked Saving Smart Save Account i.e. having a balance of Rs. 25000/- or above the system will allow Auto Sweep in multiple of Rs. 5000/-. However, penalty for not keeping minimum balance will be applicable only if the Minimum Average Quarterly Balance falls below Rs. 25000/-.

$ Plus Service Tax as applicable

Auto Sweep (Sweep – In):

When the balance amount in FFD linked Savings Bank / Current account shall

cross over the minimum balance, the excess, in multiple as applicable for

different categories as per Format-I above, will be transferred automatically


to Flexi Fixed Deposit account, for the time period as mandated by the

depositor at the time of opening of account under the scheme.

Reverse Sweep (Sweep Out):

Through reverse sweep facility, the amount lying in Flexi Fixed Deposit shall be available to the depositor whenever there is a requirement of funds in his / her / their operative account i.e. savings / current account. As such, whenever the depositor issues a cheque or uses ATM card and the available balance in his/ her connected Savings/ Current Account is not sufficient, Reverse Sweep will automatically withdraw the required amount from Flexi Fixed Deposit account and the remaining amount in FFD will continue to earn the same rate of interest, as agreed upon in the contract. In such an event, the amount from flexi fixed deposit shall be transferred to his/ her/ their savings/ current account by following the LIFO (last in first out) method.

However, the funds to be transferred as a reverse sweep to Savings Bank/ Current Account will also meet the requirement of maintaining minimum balance.

Issuance Of Pass Sheet (Statement) In Lieu Of Deposit Receipts:

In lieu of the regular Term Deposit Receipt, the Flexi Fixed deposit Pass Sheet shall be made available to the customers maintaining account under the scheme. COPEC Secunderabad will issue pass sheet to the customers of all the branches of the Bank who maintain account under this flexi deposit scheme.

Conessions Available

SB Smart Save

1. RTGS/ NEFT - 50% concession in Service Charges (RBI charges, if any, to be collected)..


1. Speed Clearing - no charges (Charges by Clearing House to be collected)2. ECS debit and Credit - Free3. Instant credit of outstation cheques upto Rs25,000.4. Collection of Government Cheques - At Par5. SMS facility - Free6. Cheque books - Free7. Accident insurance coverage upto Rs1,00,000/.

Saving Smart Save Gold.

1. RTGS/NEFT - Free (RBI charges, if any, to be collected).2. Speed Clearing - no charges ( Charges by Clearing House to be collected)

3. ECS debit and Credit - Free

4. Instant credit of outstation cheques upto Rs50, 000.

5. Collection of Government Cheques - At Par.

6. Non-cash Transactions under ABB - Free

7. SMS facility - Free.

8. Cheque books - Free

9. Accident Insurance Coverage upto Rs2,00,000/

Current Account Premium Gold

1. NEFT/ RTGS - 50% concession in Service Charges (RBI charges, if any, to be collected).

2. Cheque Books – Free3. Maximum Limit for Cash Transactions-ABB (Receipts & Payments

combined) – Rs.1 Lac4. Cash Transactions – under ABB up to Rs.50,000/- Above Rs.50,000/- -

Irrespective of location - Rs.0.75 per thousand or part thereof for full amount with a minimum of Rs.25/-

5. Non Cash Transactions under ABB - No Charges for transactions up to Rs.2,00,000/-

6. SMS facility

SAVING SMART SAVE SILVER scheme is discontinued w.e.f. 01.10.2009

Format - II


ORIENTAL BANK OF COMMERCE

(A GOVT. OF INDIA UNDERTAKING)

Branch___________________

FLEXI FIXED DEPOSIT - UNDERTAKING

Reg: my /our application for Flexi Fixed Deposit (FFD) Account

1. I / We authorise the Bank to open an operative account under…………………………………………scheme and to carry out all transactions under the FFD Scheme through this account.

2. I / We authorise the Bank to carry out all transactions under the FFD Scheme through my existing Smart Save / Smart Save Gold/ Current Account Premium Gold account no. ………………….

3. I / We undertake to maintain a minimum average quarterly balance as prescribed in the Scheme or as may be prescribed by the Bank from time to time, in the operative account, failing which I/ We undertake not to hold the Bank responsible for any financial / reputation loss that might arise in an unlikely event of dishonoring the cheques drawn by me / us under the Scheme, without any prior intimation to me.

4. I / We authorise the Bank to open Term Deposits in my / our names, in multiples of Rs. 5000/- / 25000/-, for a minimum period 90 days / 15 days /………months /……..years, whenever there is an excess balance above the prescribed Minimum Balance under the FFD Scheme.

5. In case the balance in the operative account falls below the stipulated minimum, or is overdrawn, the Bank at its discretion may levy a charge as it considers fit. In case of the account falling below the minimum on more than 2 occasions the Bank may close the operative account without reference to me / us.

6. I / We authorise the Bank to close my Flexi Fixed Deposits to the extent of the debit balance and to meet the requirement of maintaining minimum balance in my / our operative account (to the nearest multiples of Rs. 2000/- or 25000/-) on account of honouring the cheques drawn by me / us, using LIFO (last in first out) method.

7. I / We understand that as per the scheme no TDRs / acknowledgements will be given by the Bank for the deposits created under the scheme.


8. I / We authorise the Bank to mark lien on the deposits for any banking facility extended to the undersigned and/ or to set-off against the dues that may be payable to the Bank.

9. In the absence of rollover instructions to the contrary, the Bank is authorised to rollover the deposit/s for similar period until further notice.

Name………………………….. Signatures……………

Account no. SB/CA……………

Date ……………………………

Format III

RULES AND REGULATIONS FOR FLEXI FIXED DEPOSIT SCHEME

Flexi Fixed Deposit scheme is a product/ scheme where money over the threshold limit is automatically transferred (auto sweep) from operative account (saving or current account) and invested in Bank’s fixed deposit scheme. Fixed deposit is linked to the operative account. Linked fixed deposit gets broken automatically (reverse sweep) to meet the shortfall arising on account of cheques issued, ATM withdrawals, etc.

The account holder/s has/ have to maintain a minimum quarterly average balance as per rules of the Bank.

Auto Sweep will happen in multiple of Rs. 5000/ 25000 as applicable. Reverse Sweep will be in multiple of Rs. 2000/ 25000 as applicable. The scheme is applicable to Resident Indians only. Normal saving / current account transactions can be carried out. Charges per quarter would be levied for non maintenance of minimum average

quarterly balance in the linked saving account or Current Account as per Bank’s rules from time to time.

Linked FFD will be renewed automatically. Default period of linked deposits opened under the scheme will be 90 days in SB & 15

days in CA or any other period stipulated by the account holder/s whichever is higher. Such deposits will carry rates of interest as revised by the Bank from time to time for

domestic Term Deposits. Deposits falling due will be renewed from time to time for further period of 90/15 days

or any other period as stipulated by the account holder/s (whichever is higher) under the auto renewal scheme. The interest payable on such deposits will be at the rate


applicable on such deposits of the Bank, for the respective period, prevailing as on the date of such renewal.

The Bank will renew the deposit in multiple of Rs. 5000/- / 25000/- subject to Tax Deduction at Source (TDS) wherever applicable, unless instructions to the contrary are received from the account holder/s.

The Bank is authorised to link all fixed deposits made by the Bank under the auto sweep or auto renewal facility, automatically to the operative account under the Flexi Fixed Deposit Scheme. If the account holder/s desire/s to link any deposit opened by any other means, separate instructions to that effect need to be given.

The Bank will issue Pass Sheet in lieu of fixed deposit receipts opened/ renewed under the scheme from time to time.

No overdraft / loan will be provided against the security of fixed deposits made under the flexi fixed deposit scheme.

The fixed deposits under the scheme will be in units of Rs. 5000/- / 25000/- each. In case the account holder/s issue/s cheques on the linked operative account or draw

from the ATM or the Bank passes debits in the normal course for recovering dues from the account holder, under the reverse sweep facility, the Bank is authorised to honour these cheques / debits / ATM withdrawals even if there is a shortfall, provided the shortfall is not more than the aggregate deposits that the account holder may have with the Bank under this scheme and prematurely or otherwise encash the deposits in units or Rs. 1000/- or 25000/- (as applicable) and multiples thereof to meet the shortfall. If the account holder has more than one deposit under the scheme, the last deposit made under the scheme will be used first (LIFO) to meet the shortfall and if this is not adequate, the deposit made prior to the last deposit will be used and so on and so forth, until the shortfall is fully met.

The term deposit linked under flexi fixed deposit scheme will be under unconditional lien to the Bank and the Bank will have a right of set off against the dues payable to the Bank. For this purpose, the Bank is within its rights to close the deposit prematurely at its discretion, by applying penal rate of interest. Bank’s lien will have priority over any obligation to pay a cheque drawn on the linked saving / current account.

Name of depositor

Account number CA/SB ………………… signatures

Date: ………………………

Note: The account holder should advise the Bank in writing of any change in residential status.

The above-mentioned terms and conditions are subject to change / modification without prior notice.


4.11. Tax Saving Term Deposit Scheme- Oriental Bank Tax Saving – Term Deposit Scheme (u/s 80C of Income Tax Act 1961)

4.11.1. Main features of the scheme

An individual or a Hindu Undivided Family (HUF) having Permanent Account Number (PAN) can make deposit under the scheme.

The deposit can be either in the form of Fixed Deposit or Cumulative Deposit Type of deposit

(a) Single holder type deposit -

The single holder type deposit receipt shall be issued to an individual for himself or in the capacity of the Karta of the Hindu Undivided Family (HUF).

(b) Joint holder type deposit –

The joint holder type deposit receipt may be issued jointly to two adults or jointly to an adult and a minor, and payable to either of the holder or the survivor. Provided that in the case of joint holder type deposit, the deduction from income under section 80C of the Income Tax Act shall be available only to the first holder of the deposit.

Deposit under the scheme can be accepted as :

a) Fixed Deposit: Fixed deposit can be issued with monthly or quarterly interest payment option.

b) Cumulative Deposit: interest is compounded at quarterly rests and payable with principal on maturity.

Minimum investment under the scheme is Rs. 100/- and in multiple thereof subject to maximum of Rs. 1.00 lac (One Lac Rupee) in a financial year.

The period of deposit shall not be less than five years. The lock in period under the scheme shall be five years; as such the terms deposit

cannot be encashed before the expiry of five years from the date of deposit except in


case of death of depositor. In the event of the death of the depositor, premature payment can be allowed to nominee/ legal heirs as per policy of bank, which as of now is as follows:

i) If the deposit is accepted before 26.12.2006, interest shall be paid at the applicable rate for the period, deposit remained with the bank.

ii) If the deposit is accepted on or after 26.12.2006, no interest shall be paid if prematurely encashed within 7 to 30 days.

iii) If the period of deposit is more than 30 days to less than 5 years, the rate of interest payable shall be as per normal domestic term deposits, for the period, the deposit remained with the bank, as applicable on date of contract/ deposit or the date of payment whichever is less, subject to the applicable extra benefit of 0.50% for Senior Citizen/ as advised by Head Office from time to time, without penalty. However, in any case the rate of interest payable shall not be more than the contracted rate.

Rate of Interest: As advised by Head Office from time to time

Issue of Deposit Receipt: The deposit receipt shall signify Name of Scheme besides Name, Address, and Permanent Account Number (PAN) of depositor along with the other usual particulars like date, period, amount, rate of interest, maturity date, maturity value in case of Cumulative Deposit receipt or periodicity of payment of interest (monthly or quarterly) in case of Fixed Deposit receipt.

Charge or AlienationThe Tax Saving Deposit receipt shall neither be pledged to secure loan of any sort nor as security to any other asset. In other words, no advance of any nature, including by way of collateral security; to secure any asset, advance, guarantee or L/C can be allowed against pledge / lien of the deposit receipt/s. For this purpose, a stamp marking ‘NO LIEN / NO LOAN / NO PREMATURE PAYMENT’ shall be affixed on the face of Term Deposit Receipt itself. Similarly, the rubber stamp marking ‘NO LIEN / NO LOAN / NO PREMATURE PAYMENT’ must also be affixed on the respective Account Opening Form.

Renewal of term deposit in this scheme on maturity shall be as notified by the Government and in force from time to time. However, renewal will be allowed in general term deposit scheme i.e. by transferring the amount from this scheme to the general term deposit scheme but without Income Tax exemption.

4.11.2. Replacement of lost or destroyed term deposit receipt:


i) If a term deposit receipt is lost, stolen, destroyed, mutilated or defaced, the person entitled thereto may apply to the issuing branch for the issue of a duplicate receipt.

ii) Every such application shall be accompanied by a statement showing particulars, such as number, amount and date of the receipt, and the circumstances attending such loss, theft, destruction, mutilation or defacement.

iii) If the Branch Incumbent is satisfied of the loss, theft, destruction, mutilation or defacement of the term deposit receipt, he shall issue a duplicate receipt, on applicant furnishing an Indemnity Bond in the prescribed form, with one or more approved sureties or with a bank guarantee. The fact ”duplicate receipt issued in lieu of lost receipt no….………..” will be mentioned on the face of such receipt.

iv) Cases where the deposit receipt is for Rs. 500- or less/ deposit receipt is mutilated or defaced, shall be dealt with as follows:

a) Cases where the amount of the deposit receipt lost, stolen, destroyed, mutilated or defaced is five hundred rupees or less, a duplicate receipt or receipts may be issued, on the applicant furnishing an indemnity bond without any such surety or guarantee.

b) Cases where such application is made with respect to a receipt mutilated or defaced, of whatever face value, a duplicate receipt may be issued without any such indemnity bond, surety or guarantee, if the receipt mutilated or defaced is surrendered and the receipt is capable of being identified as the one originally issued.

v) A duplicate receipt issued as per (iii) above shall be treated as equivalent to the original receipt for all the purposes of this scheme except that it shall not be encashable at a branch of the bank other than the branch at which such receipt is issued without pervious verification.

4.11.3. Nomination

Under the scheme, the single holder or the joint holder of a Term Deposit may nominate only one person who in the event of death of the single holder / both the joint holders, as the case may be shall become entitled to the deposit and to the payment due thereon.

The name of the nominee, as the case may be, must be mentioned on the face of deposit receipt.


No nomination shall be made in respect of a term deposit applied for and held by or on behalf of MINOR.

In the event of the death of the holder of a term deposit in respect of which the nomination is in force, the nominee shall be entitled at any time before the maturity or after the maturity of the term deposit to encash the term deposit, as per bank’s norms.

For the purpose of payment, the nominee shall make an application to the Branch Manager, supported by proof of death of the holder.

4.11.4. Payment to Legal Heirs

If holder of a term deposit dies and there is no nomination in force at the time of his death, his/ her legal heirs are entitled to claim the sum due to the deceased, as per bank’s norms.

4.11.5. Transfer from one branch to another

The term deposit account can be transferred from one branch to any other branch, on the depositor making an application, at either of the two branches. Every such application shall be signed by the holder of the term deposit receipt. In case of joint holder type deposit, the application may be signed by one of the joint holders, if the other is dead.

4.11.6. Income Tax Exemptions:

The principal amount is tax exempted under section 80C of the Income Tax Act, 1961 (43 of 1961) subject to the overall ceiling of Rs. 1.00 lac, along with investment in other schemes like PF, PPF, NSC, Insurance Premium, and Infrastructure Bonds etc.

Interest on these deposits shall be liable to tax under section 194A or section 195 of the Income Tax Act. Accordingly the interest amount is liable to TDS.

15H / 15G (with PAN) wherever applicable as in case of other term deposit schemes and as per Government guidelines. "Form 15G/ Form 15H" should not be accepted from any depositor unless his/ her PAN is quoted on the respective forms.

4.11.7. Benefit for Staff / Ex-Staff / Ex-Staff who is also a Senior Citizen:

Extra benefit of 1% (or as advised by Head Office from time to time) in interest rate may be allowed to Staff, Ex-Staff & to the Ex-Staff who is also a senior citizen, as presently applicable in all deposit schemes of Bank. The maximum benefit allowed to ex-staff who may be a senior citizen shall not be more than 1%.


4.11.8. Under the provisions of the subject scheme, the particulars such as Name of the depositor/s, complete address, Permanent Account Number (PAN) must invariably be mentioned on the deposit receipt. The signature/s of the depositor must also be obtained on top left of the deposit receipt above the prescribed column for customer ID.

4.11.9. Existing KYC & AML guidelines should be followed meticulously while accepting deposit under the scheme.

4.12. CAPITAL GAINS EXEMPTION DEPOSIT SCHEME-1999 (since withdrawn)

4.12.1. Government of India vide Finance (No.2) Act, 1996 introduced Section 54 EA of the Income Tax Act, 1961 w.e.f. 01.10.1996, in terms of which capital gains on sale of long term capital assets is exempted in cases where the net consideration (Section 54 EA) of capital gains (Section 54 EB) is invested in certain approved investments including in term deposits with banks for periods not less than seven years. Banks under the Banking Companies (Acquisition and Transfer of Undertakings) Act 1980, were included for the purpose of Section 54 EB and deposits for a period of not less than seven years in these banks were also Notified as long term assets for Section 54 EB by Central Board of Direct Taxes.

The scheme formulated on the pattern of existing term deposit schemes was for individuals, Companies, Associations, Firms, Self-employed, Professionals and HUFs who made capital gains on account of sale of assets and desired to avail exemption from Capital Gains Tax under the said provisions of the Income Tax Act, 1961. The investment i.e. the amount of capital gains had to be made for a minimum period of 84 months under the scheme with the Bank. The details of the scheme are as under:

4.12.2. Eligibility: Individual (s)- singly or jointly or on behalf of minor, Company, Association, Firm, HUF etc., which are eligible for exemption under Section 54 EB of Income Tax Act, 1961 can open account under the scheme with the Bank.

4.12.3. Amount of deposit: Minimum: Rs.5000/-

Rest in multiples of Rs.1000/-

Deposit could be accepted either as fixed deposit or cumulative deposit as per request of the customer.

4.12.4. Period of deposit: Minimum: 84 months

Maximum: 120 months

4.12.5. Procedural instructions: same as for other term deposit accounts. However, the words “DEPOSIT ACCEPTED UNDER 54 EB, NO LOAN TO BE ALLOWED” were


to be marked on the respective ledger folio. Similarly, on the face of deposit receipt it was to be clearly marked that the Deposit is accepted under CAPITAL GAINS EXEMPTION DEPOSIT SCHEME- (54EB)-1999.

4.12.6. Rate of interest: As applicable to domestic term deposits from time to time.

4.12.7. Premature withdrawal: allowed subject to deduction of Capital Gains Tax as per Income Tax Rules. However, interest in such case was permitted to be paid for the period for which the deposit remained with the bank less one percent. At the time of allowing premature withdrawal of deposit, the Capital Gains Tax, at prescribed rate was to be deducted and deposited with the Income Tax department within seven days of the close of the month in which tax was so deducted.

4.12.8. LOAN/ OVERDRAFT: No loan/ overdraft facility was allowed against the deposit under the scheme.

4.12.9. TAX DEDUCTED AT SOURCE: Tax on interest was to be deducted as per existing guidelines of bank.

4.12.10. NOMINATION FACILITY: available under the scheme.

4.12.11. TRANSFER OF DEPOSIT in the name of another person is not allowed. However, account under the scheme can be got transferred from one branch to another at the request of the customer.

4.13. CAPITAL GAINS ACCOUNTS SCHEME -1988

Discussed in detail in last part of this chapter


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Type of deposits deposit schemes of the bank

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