Module: General Practice
Q187: Which of the following statements regarding the "Premature Termination of Term Deposits" in the event of the depositor's death is INCORRECT?
✅ Correct Answer: B
Correct Answer: B. Banks can charge a penal interest of 1 percent for such premature withdrawal.
Concept: Waiver of Penal Charges.
The Rule: In the event of a depositor's death: The Bank CANNOT levy any penal charge for premature withdrawal of a Term Deposit.
Policy: Banks must pay the interest applicable for the actual period the deposit ran, without deducting any penalty.
This applies even if the original contract had a "No Premature Withdrawal" clause.
The rationale is that the withdrawal is due to an unfortunate event (death) and not a commercial decision by the depositor.
Concept: Waiver of Penal Charges.
The Rule: In the event of a depositor's death: The Bank CANNOT levy any penal charge for premature withdrawal of a Term Deposit.
Policy: Banks must pay the interest applicable for the actual period the deposit ran, without deducting any penalty.
This applies even if the original contract had a "No Premature Withdrawal" clause.
The rationale is that the withdrawal is due to an unfortunate event (death) and not a commercial decision by the depositor.