Why one should insist for Fixed Deposit Receipt
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 issues 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 of India.
Now for the sake of argument if we generate this type of communication with the same line i.e. “This is computer-generated paper and doesn’t require signature” at legend will Bank accept our instruction or make the payment ? The answer is no. They will ask our signature as recorded with them besides for payment they ask us to use prescribed withdrawal form/cheque leaf. Hence why is it one-sided ?
In fact banks, for their own 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.
For everyone's knowledge Fixed Deposit Receipt ( FDR ) always bears authorized officer's signature with rubber stamp. Moreover FDR 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 FD 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 i.e. can easily be offered for security. Hence FD Advice is nothing but an intimation and is not an assignable document.
Further please note that at the time of maturity the prescribed form contains one clause seeking indemnity from FD customer against the possible fraudulent use of this FD, though customer is not informed appropriately and explicitly of such a condition at the time of accepting such deposit/s and implication of such indemnity he would be signing ( for getting his own money back ). Actually this FD Receipt is non-transferable paper and unless banks officials collude one cannot create a valid pledge / lien on it.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.
Please 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.
Considering all above Fixed Deposit Receipt is safe as unless we submit it with our signature neither loan is granted nor maturity payment takes place and the possibility of fraud becomes negligible.
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,
Bikaner
9829129011 / 7976870397 more
Similarly, some banks also on deposit of money for fixed terms started issuing computer generated signed Fixed Deposit Advice whereas few banks issues 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 of India.
Now for the sake of argument if we generate this type of communication with the same line i.e. “This is computer-generated paper and doesn’t require signature” at legend will Bank accept our instruction or make the payment ? The answer is no. They will ask our signature as recorded with them besides for payment they ask us to use prescribed withdrawal form/cheque leaf. Hence why is it one-sided ?
In fact banks, for their own 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.
For everyone's knowledge Fixed Deposit Receipt ( FDR ) always bears authorized officer's signature with rubber stamp. Moreover FDR 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 FD 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 i.e. can easily be offered for security. Hence FD Advice is nothing but an intimation and is not an assignable document.
Further please note that at the time of maturity the prescribed form contains one clause seeking indemnity from FD customer against the possible fraudulent use of this FD, though customer is not informed appropriately and explicitly of such a condition at the time of accepting such deposit/s and implication of such indemnity he would be signing ( for getting his own money back ). Actually this FD Receipt is non-transferable paper and unless banks officials collude one cannot create a valid pledge / lien on it.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.
Please 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.
Considering all above Fixed Deposit Receipt is safe as unless we submit it with our signature neither loan is granted nor maturity payment takes place and the possibility of fraud becomes negligible.
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,
Bikaner
9829129011 / 7976870397 more
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View all 6 comments Below 6 comments
Receipt of the payments or commodities or merchandise has got to be signed by the recipients even if it is computer/mobile phone generated, signed as e-signatures registered with the digital system. Genuineness of such a system has to be approved by the concerned Authorities. more
Dec 20
Thanks to Mr Binani for his very useful post. What about FD acknowledgements sent on e-mail to the depositor by the banks? more
Dec 09
Very well said. In the absence of proper signature and authority one never knows communication is from which officer and Department. One cannot respond back more
Dec 09
