NHB(ND)/DRS/Pol-No-28/2009

April 15, 2009

TO ALL REGISTERED HOUSING FINANCE COMPANIES (HFCs)

Dear Sir,

BANKING COMPANIES (NOMINATION) RULES, 1985- ACKNOWLEDGEMENT OF NOMINATION

As you are aware ‘Nomination’ in favour of one person can be made by the depositor/s in respect of the deposits held by him/them with a housing finance company in terms of Section 36B of the National Housing Bank Act, 1987. Such nomination can be made in the manner prescribed in the Banking Companies (Nomination) Rules, 1985 made by the Central Government under Section 45ZA of the Banking Regulation Act, 1949. In terms of Rule 2(9) of the said Rules, the companies are required to acknowledge in writing to the depositor/s the filing of the relevant duly completed Form of nomination, cancellation and/or variation of the nomination.

2. HFCs which are accepting public deposits are advised to strictly comply with the above provision of the Banking Companies (Nomination) Rules, 1985 and devise a proper system of acknowledging the receipt of duly completed form of nomination, cancellation and/or variation of the nomination. Such acknowledgement should be given to all the customers irrespective of whether the same is demanded by the customers.

3. HFCs are also advised to introduce the practice of recording on the face of the RD passbooks/FDRs the position regarding availment of nomination facility with the legend "Nomination Registered" and they should also indicate the name of the Nominee in the RD Pass Books / FDRs, in case the customer is agreeable to the same.

Yours faithfully

(R.S. Garg)
General Manager
Department of Regulation & Supervision