Terms & Conditions governing Term Deposits. To be read in conjunction with Axis Bank Sri Lanka General Terms and Conditions

Transcription

1 Terms & Conditions governing Term Deposits To be read in conjunction with Axis Bank Sri Lanka General Terms and Conditions

2 Contents 1. Scope of this document Product details and features Process flow KYC / AML diligence Complaint handling mechanism... 7 Annexure I... 8 Annexure II... 9

3 1. Scope of this document This document aims to define the terms and conditions governing acceptance of term deposits by branches of Axis Bank in Sri Lanka. For general terms and conditions governing all deposits please refer to document Axis Bank Sri Lanka General Terms and Conditions. 2. Product details and features i. Account type Term Deposits placed for a fixed period and repayable on expiry of the fixed period. ii. Who can open an account 1. Individuals (Single or Joint); including non-residents; in DBU 2. Proprietorship Concerns; 3. Partnership Firms; 4. Limited Companies; 5. Corporations 6. NGO s 7. Association, Clubs, Societies, Trusts etc. 8. Executors and Administrators and Liquidators; 9. Banks. iii. Who can open an account 1. Non-resident Sri Lankan; in FCBU 2. Non Nationals; 3. Companies registered outside Sri Lanka; and 4. Companies registered with the board of Investment (BOI) in Sri Lanka. iv. Minimum requirements to 1. The primary customer must be aged 18 years or more. open an account 2. The customer should be able to submit a valid proof of identity and a valid address and undergo successful checks as per Axis Bank s policies in this regard. 3. Firms and Companies should produce the prescribed documents establishing the identity and address of the firm / company along with KYC of Authorised signatories as per regulatory requirements of Sri Lanka and undergo successful checks as per Axis Banks policies in this regard. For details refer Annexure II v. Linked operative account 1. The customer has the option to have an existing Axis Bank Savings / Current Account or open an Axis Bank Savings / Current Account along with the Axis Bank Term Deposit Account for ease of crediting of periodical interest or maturity proceeds. 2. If the Term Deposit account is a joint account then the linked operative account also has to be a joint account in the same name and right. 3. If the Term Deposit account is operated through a power of attorney holder, then the linked operative account also has to be operated through the same power of attorney holder. vi. Mode of operations: Individual Accounts 1. Singly by the customer; or 2. The Power of Attorney Holder. Joint Accounts 1. Jointly by all the Holders; or 2. Either or Survivor; or 3. Former or Survivor; or 4. Any One or Survivor. Proprietorship Firms 1. Singly by the proprietor; or 2. The Power of Attorney Holder. (Signature of the proprietor under the firm s stamp)

4 Partnership Firms 1. Jointly by all partners; or 2. Either of the partners (where there are 2 partners), as specified by partnership deed; or 3. Any one partner (where there are more than 2 partners), as specified by partnership deed; or 4. Jointly by any two (or three or more) of the partners, as specified by partnership deed; or 5. Singly as specified by partnership deed; or 6. The Power of Attorney Holder as applicable. Public and Private Limited Companies vii. Minimum deposit amount viii. Maximum deposit amount 1. As per board resolution of the company. Fixed Deposits DBU LKR 5, USD Recurring Deposits DBU LKR and in multiples of LKR thereon For FCBU the Bank will be guided by the Banking Act & Exchange Control Laws of Sri Lanka. No maximum deposit limit. There are no regulatory restrictions on the maximum deposit amount. ix. Currency Sri Lankan Rupee LKR US Dollar USD This list may be amended from time to time in tune with Central Bank of Sri Lanka (CBSL) guidelines. x. Tenor The deposit tenor for LKR Fixed Deposits can vary from 7 days to 5 years. The deposit tenor for Fixed Deposits in any other currency can vary from 1 month to 5 years. In case of Fixed Rate Recurring Deposit the tenor can vary from 1 year to 5 years, xi. Loyalty rates The number of buckets may be determined by Head Office (Treasury). Not Applicable. Page 2 of 12

5 xii. Tax status - Withholding Tax xiii. Bonus payments xiv. Interest rates The customer is required to submit a declaration in the format prescribed by the Inland Revenue Department, at the beginning of the financial year. The Bank is required to deduct withholding tax from the sum of interest paid and interest accrued to the customer, based on this declaration and to deposit this with the Government at prescribed intervals in the prescribed manner as laid down in Section 133 of the Inland Revenue Act No 10 of 2006, as amended up to date. The customer will be provided with a certificate of tax deducted in the prescribed format. Bank will also maintain all records in the prescribed manner. Further details provided in Annexure I No Bonus is payable on any Term Deposits. 1. Interest rates on deposits The Head Office (Treasury) will be responsible for setting deposit rates and reviewing them from time to time. 2. Preferential rates The Head Office (Treasury) may decide to offer Special Rates to extra high value deposits, say Rs.5,00,00, or above, subject to regulatory restrictions, if any. 3. Special rates The Head Office (Treasury) may decide to offer Special Rates to certain customer segments, subject to regulatory restrictions, if any. 4. Age Based Special rates The Head Office (Treasury) may decide to offer Special Rates to certain age groups, like Senior Citizens, subject to regulatory restrictions, if any. Such rates will only apply if the customer has already attained the applicable age at the time of placement / renewal of the deposit, and will not be changed during the tenure of the deposit. 5. Interest quote- Interest rates quoted to clients should state the AER, Gross rate and the Net rate. AER means Annual Equivalent Rate. AER illustrates what the interest rate would be if interest was paid and compounded each year. It allows the client to easily compare different offers. Net rate is the rate payable after the deduction of withholding tax at the highest prevailing rate. As the rate of tax may vary, the net rate is given for illustration only and is rounded to two decimal places. Gross rate is the rate at which interest is paid without withholding tax being deducted. 6. Historic rates- The Bank will maintain and make available to customers the historic interest rates on deposits. xv. Interest payment frequency The customer would have the option for interest payout as per the periods given below 1. Monthly 2. Quarterly 3. On Maturity If the customer has not opted for a frequency of interest payment, it will automatically be paid at the time of deposit maturity. Page 3 of 12

6 xvi. Interest payment method xvii. Review of interest rates xviii. Updation of interest rates xix. Value dating of term deposits xx. Loyalty rates xxi. Fees and charges xxii. Maturity xxiii. Renewal of deposits 1. Term Deposits will have two variants of interest calculation. 2. Monthly schemes (MIC) will have a MONTHLY calculation and monthlypayout (without discount). 3. Quarterly schemes (QIC) and cumulative schemes (RIC) will have quarterly payout or compounding. 4. Interest can be credited to the customer s operative account, sent as a Pay Order or compounded in case of cumulative schemes. 5. The Bank would treat a year as 360 days 0r 365 days depending on market practice for different currencies. Interest rates for Term Deposits will be reviewed by the Head Office (Treasury) on a regular basis. The rates as determined by the Head Office (Treasury) will be updated in Finacle and the website prior to introduction of the new rates. Latest interest rates would be displayed at the Branch, and the Bank s website. Value dating of Term Deposit will be allowed up to a period of FOURTEEN days. Exceptional cases would be considered by the Branch Head and Operations Head only with prior approval from the Central Office. Not Applicable. Nil. The due date of Term Deposits is to be calculated by including the date of deposit and excluding the date of payment. When a due date for payment of a Term Deposit falls on a nonworking day, the deposit will be repaid on the next working day. In such cases, interest would be paid on the deposit amount at the original contracted rate for the intervening non-working day(s). If the customer has opted for an auto renewal option, then the deposit will be renewed at the rate prevailing on the date of maturity for the corresponding amount and tenure of the deposit as at the time of maturity. Either the principal or the principal together with the accrued interest can be reinvested. If the customer has not opted for an auto renewal option nor given any alternate instructions, the funds on maturity of the deposits will be transferred to the customers operative account or a pay order as applicable. 1. Customers have the option of renewing the Term Deposits on maturity on fresh terms, rates, and tenure, with effect from the date of maturity. Rate of interest will be as per the rate existing on date of maturity of the deposit. A maximum grace period of 14 days will be allowed for the purpose of such renewal. 2. In case there is a change in the interest rate after the date of maturity of the original deposit and before the date of receipt of customers instructions for renewal (within the grace period of 14 days), the customer can avail of such changed rate only if the deposit is made as a fresh deposit with effect from the date of such change. In such case value dating from the date of maturity of the original deposit shall not apply. 3. In case a customer attains SENIOR CITIZEN status during the tenure of the deposit, and if the Bank is offering special rates for such status, the special rate will not apply automatically during the tenure of the deposit. 4. In case a customer attains SENIOR CITIZEN status during the tenure of the deposit, and if the Bank is offering special rates for such status, the special rate will not apply automatically at the time of AUTORENEWAL of the deposit. Such deposits will necessarily have to be made afresh at the specific request of the customer. Page 4 of 12

7 xxiv. Premature withdrawal xxv. Deposit confirmation and statements xxvi. In the event of death xxvii. Deposit protection xxviii. Security features and access control 1. For individuals, request for repayment / renewal of deposits before maturity should be made by all the depositors who signed the account opening request irrespective of instructions of mode of operations of account. However, in case of Former or Survivor, such requests can even be made under the signature of the former account holder only. 2. For partnership firms, request for repayment / renewal of deposits before maturity should be made by all the partners who signed the account opening request irrespective of instructions of mode of operations of account. 3. For premature withdrawal or renewal before maturity of Term Deposits, the guidelines as advised by the bank from time to time and as applicable to the deposit at the time of making the original deposit should be followed. 4. Interest will be paid only for the period the deposit has actually remained with the Bank, at the rate applicable for the said period / interest slab (as the case may be) as prevailing on the date of making the deposit. The customer will be issued a Fixed Deposit Receipt (FDR) or Recurring Deposit Passbook, as the case may be, on opening the deposit and a maturity notice prior to maturity of the deposit. The FDR will contain among others the following information: 1. The Term Deposit account number; 2. The principal amount; 3. The Gross interest rate; 4. The tenor of the deposit; 5. The maturity date; 6. Premature closure terms; 7. The maturity amount; 8. Details of Nomination. The customer will also be sent a tax certificate wherever applicable, as per regulations prevailing in Sri Lanka. 1. In case of death of the customer (other than joint accounts) the Nominee(s) is / are entitled to monies lying in the customer s account. If no nominee has been appointed, then the law of succession in Sri Lanka will apply. 2. Interest will be paid only for the period the deposit has actually remained with the Bank, at the rate applicable for the period / interest slab as prevailing on the day of making the deposit. 3. The legal Claimants shall have the option of waiting till the maturity of the deposit. In such cases, the name of the primary holder will be replaced in Finacle with the name of the legal claimant / nominee, as the case may be. This will be done by the Branch Head and Operations Head only. 4. The Bank shall always call for a death certificate, grant of probate, certificate of confirmation and / or grant of representation or any other document it may deem necessary and sufficient for establishing the genuineness of any claim before allowing access to any of the funds in the account. The Bank will be covered by the Sri Lanka Deposit Insurance Scheme (SLDIS), as per the details in the document Axis Bank Sri Lanka General Terms and Conditions. Serially Numbered blank FDR stationery would be maintained at the branch. Such stationery should be stored at the branch in the same manner as other security stationery. Printing of the FDR will be done at the branch. Account numbers will be generated and printed from Finacle. Page 5 of 12

8 xxix. Liability Bank s liability is restricted to repayment of the Principal along with Interest for the period the deposit has actually remained with the Bank, at the rate applicable for the period / interest slab as prevailing on the day of making the deposit. Repayment will be subject to Bank s policies with regard to premature encashment and also Government policies with regard to deduction of Withholding Tax at source. 3. Process flow Under the SLDIS, eligible depositors are covered to a limit of LKR 200, per Bank, across all deposits and all currencies. Customer can open an Axis Bank Term Deposit Account by visiting the branch. Online banking would be available, once the facility is enabled. The process flow is as under: Activity Customer Bank Opening Visits the Branch with all a. On receipt of the application, Bank to verify if all Account relevant documents for information is in order and carry out the KYC checks. New opening of account. For list of documents required, please refer to Customer Annexure II b. If successfully processed, Bank to open the account. c. If not successfully processed the customer is to be advised of the additional information / documents required. d. If KYC / AML process fails, the Bank will Seek documents (ID / Address Proof fromcustomer) to enable completion of the process. If Bank is unable to conduct the KYC, for anyreasons, despite best efforts, the Bank to intimatecustomer of its inability to open the account. Opening a. Visits the Branch and a. On receipt of the application, the Bank to verify if all Account submits the completed information is in order and open the account. Existing additional AOF. Customer b. When Online Banking becomes operational the customers having an operative account with net banking facility can also submit an online application for opening the Term Deposit account. Account a. Deposits amount into the a. Bank to debit the operative account and fund the operation operative account and Term Deposit account. authorizes Bank to debit b. If Cheque is returned unpaid the Bank to contact the the same for funding the customer and advise on the status. Term Deposit. c. On successful funding, Bank to print the Fixed Deposit b. Deposits amount directly Receipt or issue Recurring Deposit (RD) passbook, as into the Term Deposit applicable. account through cash or cheque. c. Provides request for d. On receipt of the instruction Bank will close the encashment or renewal deposit and credit the operative account or remit along with the the funds as per customer instruction. discharged FDR / RD e. For renewal, Bank to print the Fixed Deposit Receipt

9 passbook as applicable. after renewal. d. Provides instruction for disposal of interest. e. Provides instruction for disposal of principal. Others Submits request for change On receipt of the request Bank will make necessary in linked account details. changes in Finacle. 4. KYC / AML diligence The Bank will have a stringent Know Your Customer (KYC) checking policy and no account will be opened without it being KYC compliant. Regarding KYC/ AML checks the bank will be extremely prudent and will practice physical verification. Online Banking facility, when enabled, will be only provided to customers who are fully KYC compliant. 5. Complaint handling mechanism 6. The Bank has a system in place for fair and expeditious handling of customer s grievances. Customers may send mail to complaints.slk@axisbank.com for this purpose. For more details, please see Complaint Handling Procedure in our website.

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11 Annexure I The regulations governing Withholding Tax for Sri Lanka are summarized below: All tax calculations pertain to Domestic Banking Unit (DBU) (SOL 921) only. All accounts in the Foreign Currency Banking Unit (FCBU) (SOL 922) are exempt from tax. All tax calculations pertain to Lanka Rupee (LKR) currency only. The interest from all types of liability accounts (Savings, Term Deposits, and Recurring Deposits) is considered for withholding tax. The interest includes interest paid and interest accrued to the applicable accounts. The withholding tax will be considered at the customer level for the BANK as a whole, and not at the BRANCH level. All customers will be required to give the Income declaration in the prescribed form at the beginning of the financial year. All COMPANIES are to be taxed at 10.00% only, no slabs, no exempt limits. All Certificates of Deposit (CD) are to be taxed at 10.00% only, no slabs, no exempt limits. All PARTNERSHIP FIRMS are to be taxed at 8.00% only, no slabs, no exempt limits. All CHARITABLE TRUSTS income declaration can have two slabs o Interest upto LKR NIL. o Interest above LKR %. INDIVIDUALS customer income declaration can have three slabs o Interest upto LKR NIL. o Interest above LKR upto LKR %. o Interest above LKR %. In case of JOINT HOLDERS, if there is no mandate from the customer, the interest is to be equally apportioned amongst all the joint holders. In case of SAVINGS ACCOUNTS the interest upto LKR PER MONTH PER CUSTOMER is exempt from tax. If an individual has more than one savings account, then the exemption of LKR per month is for one account only. This account number has to be mentioned by the customer and captured by the system. Even if the declaration by the individual customer is different from the interest ACTUALLY earned from the bank, tax will be deducted on the basis of the declaration, and not as per the actual accrued interest amount. In such cases a report will be required so that the users can contact the customers for a revised declaration. In case the declaration by the charitable institution is different from the interest ACTUALLY earned from the bank, tax will be deducted on the basis of the declaration, and not as per the actual accrued interest amount. In such cases a report will be required so that the users can contact the customers for a revised declaration Page 8 of 12

12 Annexure II DOCUMENTS REQUIRED BY THE BANK FOR COMPLETION The following table details the documents that are required to open an account. Please ensure that all Documents mentioned below are submitted along with the Account Opening Form Documents / Requirements Limited Company Partnershi p Sole Proprietors hip Clubs, NGOs, Societies & Trusts Individuals Account Opening Form Document s received by the Bank Mandate / Board Resolution Partnership Agreement Certificate of Incorporation / Certificate of Re Registration Articles of Association List of Directors (Form 48 / Form 20 / Form 1) Business Registration Certificate Constitution / Rules National ID or Passport copies of Authorized Signatories Utility Bill copies of Authorized Signatories if address differs from NIC

13 BOI Agreement Section 17 and Certificate Export Development Board (EDB) Certificate or Exchange Control Approval Approval from relevant Government Ministry / Authority Placing of rubber stamp alongside signatures Documents should be certified by Company Secretaries / Notary Public or Original Document to be sighted by any official of Axis Bank Requested for accounts to be opened in Foreign Currency Banking Unit (FCBU) - In the name of Companies Incorporated in Sri Lanka and authorized to open accounts in the FCBU For Exporters' Foreign Currency Accounts In case of Partnerships, please produce the original of "Partnership Agreement" Authorized Signatories should place rubber stamp alongside signatures Page 9 of 12