SENSITIVITY TO SENIOR CITIZENS
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Given below are the extracts from a speech rendered by the RBI Dy. Governor recently on the subject "financial inclusion for senior citizens". Detailed are the basic facilities/ producs and services specifically earmarked for senior citizens. The text of the entire speech is available at the RBI website.
"Banking/Financial Products and Services for Senior Citizens
I turn next to some of the specific measures relating to financial products and banking services for senior citizens taken by GOI, RBI and the banking system in the recent period.
(i) Senior Citizens Savings Scheme
Government of India had launched the Senior Citizens Savings Scheme, 2004 (SCSS) with attractive interest rate exclusively for the benefit of senior citizens, with effect from August 2, 2004. SCSS accounts can be opened with Post Offices and Agency banks. The salient features of the scheme are available in the RBI's website. An important advice to senior citizens is to fill in Form 15 G and 15H, if they do not attract TDS provisions.
(ii) Senior citizen friendly measures - investment in Government Securities
Several friendly measures for senior citizens have been incorporated in the Government Securities Act, 2006 (Act) and the Government Securities Regulations, 2007 (Regulations) , which have come into force with effect from December 1, 2007.. These include -
• Automatic redemption facility for Government securities, including Relief/Savings Bond.
• Simplified procedure in the event of death of holder
• Ability to pledge or borrow against such securities
• Nomination is permitted
(iii) Facilities for pensioners
Almost all the pensioners, by virtue of the retirement age fixed by the Government, are senior citizens. The following facilities, among other, are available to pensioners:
• Credit of pension to pensioners' accounts on last 4 days of month so that the pensioner can draw pension on the 1st day of the next month itself..
• Joint account with spouse allowed.
• Pension slips to be issued at first time and thereafter whenever there is a change.
• For incapacitated pensioners - branch to depute an officer to theresidence of the pensioner for getting/certifying the life certificate.
• Banks to access the Government website and effect payment of revised Dearness Relief without waiting for RBI instructions.
• Banks to accept nominations furnished by pensioners in Form 'A' or 'B' in respect of payment of arrears of pension of the deceased pensioner.
• RBI has issued necessary instructions to all the banks disbursing pension to ensure that the pensioners get the best possible customer service. Most of the agency banks have since set up Centralised Pension Processing Centres (CPPCs) which will be responsible for receipt of the Pension Payment Orders (PPOs), calculation of pension/Dearness Relief etc. and crediting the amount directly to the pensioners' accounts through this system.
(iv) Deposit Scheme for senior citizens
Banks have been permitted to formulate, with the approval of their Boards, fixed deposit schemes specifically for resident Indian senior citizens offering higher and fixed rates of interest as compared to normal deposits of any size. These schemes should also incorporate simplified procedures for automatic transfer of deposits to nominee of such depositors in the event of death. Deposits over five year have enjoy tax exemption under 80C. TDS is applicable unless Form 15 H is submitted to the bank. Since RBI receives many complaints that tax is deducted, senior citizens would do well to file Form 15 H in time.
(v) Reverse Mortgage Loans
Reverse mortgage provides an opportunity to house owners to avail of a monthly stream of income against the mortgage of his/her house, while remaining the owner and occupying the house throughout his/her lifetime, without repayment or servicing of the loan. Realising the potential benefits, the Union Budget 2007-08 announced the introduction of 'reverse mortgage' by NHB. NHB issued the final operational guidelines for reverse mortgage loans (RMLs) on May 31, 2007. Many banks have already introduced RMLs. For tax purposes it have been clarified that reverse mortgage would not amount to "transfer", and stream of revenue received by the senior citizen would not be "income".
(vi) Simplification of procedure - deceased account holders
Another area, where Reserve Bank has accorded a lot importance relates the simplification of the procedure for handling the accounts of deceased account holders so as to ensure that settlement of a deceased account holders account proceedings is smooth and without any impediment. For those with non resident legatees, inheritance can be remitted within the liberalised remittance scheme of $200,000 per annum available to every resident.
Monitoring of Customer Service
Reserve Bank is continuously taking steps to ensure that customers get treated fairly. The quality of service rendered by banks is monitored by Reserve Bank with special emphasis on service rendered by banks to pensioners. Banks have been advised to include senior citizens in their Branch level Customer service committees. Any non observance of the RBI guidelines or bank's code of commitment to the individual customer can be taken up first with the bank's own consumer redressal machinery and if no satisfactory response is obtained by the customer he can complain to the Reserve Bank's Banking Ombudsmen who have offices at 15 centres, details of which are available on the Bank's website.
(vii) Specific instructions issued by RBI to banks in dealing with senior citizens
• Banks have been issued with special instructions aimed at facilitating opening and operations of accounts by old and incapacitated people.
• The banks have been advised to invariably provide passbooks to all account holders. Such an advice to banks was issued only in keeping in mind the interests of the senior citizens.
• Changes in any instructions on the operation of Senior Citizens deposit accounts should be confirmed within one month to the depositor in writing.
(viii) Facilities for remittances and operations on NRE /NRO accounts jointly with NRI
Some of the facilities that may be of interest to senior citizens are -
• Under the Liberalized Remittance Scheme, Residents are permitted to remit up to USD 200,000 per financial year (April-March) for any permitted current or capital account transactions or a combination of both. This would also include remittances towards gift and donation, acquisition of houses, shares, MFs, etc.
• Residents are eligible to obtain USD 100,000 or its equivalent for medical treatment abroad. A person visiting abroad for medical treatment can obtain foreign exchange exceeding the above limit, provided the request is supported by an estimate from a hospital/doctor in India/abroad.
• In connection with private visits abroad, viz., for tourism purposes, etc., foreign exchange up to USD10,000, in any one financial year may be obtained by Residents from an authorised dealer on a self-declaration basis.
• A resident can transfer property to his NRI heirs by a deed of settlement i.e. facility whereby the property is passed on to the legatees, during the lifetime of the owner/parent who normally retains a life interest in the property.
• Housing loans taken by NRIs can be repaid by his close relatives in India.
• Resident power of attorney holder can remit funds out of the balances in NRE account to the non-resident account holder provided specific powers for the purpose has been given.
• Banks can also allow operations on an NRO account in terms of such a Power of Attorney, provided such operations are restricted to (i) all local payments in rupees including payments for eligible investments and (ii) remittance outside India of current income in India of the non-resident individual account holder, net of applicable taxes.
Some tips to the Senior Citizen
Obtain from bank and read the BCSBI's Code of Banks' Commitment to Customers
• Clearly understand the concept 'Average Quarterly Balance' before opening accounts.
• Do not keep the card and its PIN together and never disclose the card number or CVV number to others. Beware of 'phishing attacks' in the online transactions and ensure that no information about the bank accounts and passwords is revealed except in making a transaction in a secured site.
• Note that there is no interest payable on the post maturity in the various senior citizen Government deposit schemes.
• Finally, if you have a complaint, first approach his bank for resolution and then take up with the Banking Ombudsman if the bank does not resolve your complaint.
Banks' sensitivity to senior citizens
Senior citizens can be forgetful, they pay attention to detail , they need to be patiently handled and finally we all must realize that one day we too will be a senior citizen expect to be treated with respect and sensitivity. "
.
Given below are the extracts from a speech rendered by the RBI Dy. Governor recently on the subject "financial inclusion for senior citizens". Detailed are the basic facilities/ producs and services specifically earmarked for senior citizens. The text of the entire speech is available at the RBI website.
"Banking/Financial Products and Services for Senior Citizens
I turn next to some of the specific measures relating to financial products and banking services for senior citizens taken by GOI, RBI and the banking system in the recent period.
(i) Senior Citizens Savings Scheme
Government of India had launched the Senior Citizens Savings Scheme, 2004 (SCSS) with attractive interest rate exclusively for the benefit of senior citizens, with effect from August 2, 2004. SCSS accounts can be opened with Post Offices and Agency banks. The salient features of the scheme are available in the RBI's website. An important advice to senior citizens is to fill in Form 15 G and 15H, if they do not attract TDS provisions.
(ii) Senior citizen friendly measures - investment in Government Securities
Several friendly measures for senior citizens have been incorporated in the Government Securities Act, 2006 (Act) and the Government Securities Regulations, 2007 (Regulations) , which have come into force with effect from December 1, 2007.. These include -
• Automatic redemption facility for Government securities, including Relief/Savings Bond.
• Simplified procedure in the event of death of holder
• Ability to pledge or borrow against such securities
• Nomination is permitted
(iii) Facilities for pensioners
Almost all the pensioners, by virtue of the retirement age fixed by the Government, are senior citizens. The following facilities, among other, are available to pensioners:
• Credit of pension to pensioners' accounts on last 4 days of month so that the pensioner can draw pension on the 1st day of the next month itself..
• Joint account with spouse allowed.
• Pension slips to be issued at first time and thereafter whenever there is a change.
• For incapacitated pensioners - branch to depute an officer to theresidence of the pensioner for getting/certifying the life certificate.
• Banks to access the Government website and effect payment of revised Dearness Relief without waiting for RBI instructions.
• Banks to accept nominations furnished by pensioners in Form 'A' or 'B' in respect of payment of arrears of pension of the deceased pensioner.
• RBI has issued necessary instructions to all the banks disbursing pension to ensure that the pensioners get the best possible customer service. Most of the agency banks have since set up Centralised Pension Processing Centres (CPPCs) which will be responsible for receipt of the Pension Payment Orders (PPOs), calculation of pension/Dearness Relief etc. and crediting the amount directly to the pensioners' accounts through this system.
(iv) Deposit Scheme for senior citizens
Banks have been permitted to formulate, with the approval of their Boards, fixed deposit schemes specifically for resident Indian senior citizens offering higher and fixed rates of interest as compared to normal deposits of any size. These schemes should also incorporate simplified procedures for automatic transfer of deposits to nominee of such depositors in the event of death. Deposits over five year have enjoy tax exemption under 80C. TDS is applicable unless Form 15 H is submitted to the bank. Since RBI receives many complaints that tax is deducted, senior citizens would do well to file Form 15 H in time.
(v) Reverse Mortgage Loans
Reverse mortgage provides an opportunity to house owners to avail of a monthly stream of income against the mortgage of his/her house, while remaining the owner and occupying the house throughout his/her lifetime, without repayment or servicing of the loan. Realising the potential benefits, the Union Budget 2007-08 announced the introduction of 'reverse mortgage' by NHB. NHB issued the final operational guidelines for reverse mortgage loans (RMLs) on May 31, 2007. Many banks have already introduced RMLs. For tax purposes it have been clarified that reverse mortgage would not amount to "transfer", and stream of revenue received by the senior citizen would not be "income".
(vi) Simplification of procedure - deceased account holders
Another area, where Reserve Bank has accorded a lot importance relates the simplification of the procedure for handling the accounts of deceased account holders so as to ensure that settlement of a deceased account holders account proceedings is smooth and without any impediment. For those with non resident legatees, inheritance can be remitted within the liberalised remittance scheme of $200,000 per annum available to every resident.
Monitoring of Customer Service
Reserve Bank is continuously taking steps to ensure that customers get treated fairly. The quality of service rendered by banks is monitored by Reserve Bank with special emphasis on service rendered by banks to pensioners. Banks have been advised to include senior citizens in their Branch level Customer service committees. Any non observance of the RBI guidelines or bank's code of commitment to the individual customer can be taken up first with the bank's own consumer redressal machinery and if no satisfactory response is obtained by the customer he can complain to the Reserve Bank's Banking Ombudsmen who have offices at 15 centres, details of which are available on the Bank's website.
(vii) Specific instructions issued by RBI to banks in dealing with senior citizens
• Banks have been issued with special instructions aimed at facilitating opening and operations of accounts by old and incapacitated people.
• The banks have been advised to invariably provide passbooks to all account holders. Such an advice to banks was issued only in keeping in mind the interests of the senior citizens.
• Changes in any instructions on the operation of Senior Citizens deposit accounts should be confirmed within one month to the depositor in writing.
(viii) Facilities for remittances and operations on NRE /NRO accounts jointly with NRI
Some of the facilities that may be of interest to senior citizens are -
• Under the Liberalized Remittance Scheme, Residents are permitted to remit up to USD 200,000 per financial year (April-March) for any permitted current or capital account transactions or a combination of both. This would also include remittances towards gift and donation, acquisition of houses, shares, MFs, etc.
• Residents are eligible to obtain USD 100,000 or its equivalent for medical treatment abroad. A person visiting abroad for medical treatment can obtain foreign exchange exceeding the above limit, provided the request is supported by an estimate from a hospital/doctor in India/abroad.
• In connection with private visits abroad, viz., for tourism purposes, etc., foreign exchange up to USD10,000, in any one financial year may be obtained by Residents from an authorised dealer on a self-declaration basis.
• A resident can transfer property to his NRI heirs by a deed of settlement i.e. facility whereby the property is passed on to the legatees, during the lifetime of the owner/parent who normally retains a life interest in the property.
• Housing loans taken by NRIs can be repaid by his close relatives in India.
• Resident power of attorney holder can remit funds out of the balances in NRE account to the non-resident account holder provided specific powers for the purpose has been given.
• Banks can also allow operations on an NRO account in terms of such a Power of Attorney, provided such operations are restricted to (i) all local payments in rupees including payments for eligible investments and (ii) remittance outside India of current income in India of the non-resident individual account holder, net of applicable taxes.
Some tips to the Senior Citizen
Obtain from bank and read the BCSBI's Code of Banks' Commitment to Customers
• Clearly understand the concept 'Average Quarterly Balance' before opening accounts.
• Do not keep the card and its PIN together and never disclose the card number or CVV number to others. Beware of 'phishing attacks' in the online transactions and ensure that no information about the bank accounts and passwords is revealed except in making a transaction in a secured site.
• Note that there is no interest payable on the post maturity in the various senior citizen Government deposit schemes.
• Finally, if you have a complaint, first approach his bank for resolution and then take up with the Banking Ombudsman if the bank does not resolve your complaint.
Banks' sensitivity to senior citizens
Senior citizens can be forgetful, they pay attention to detail , they need to be patiently handled and finally we all must realize that one day we too will be a senior citizen expect to be treated with respect and sensitivity. "
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