Application of Interest on Deposit and Loan Accounts of Deceased Individuals.

As per Bangladesh Bank BCD circular no 18 dated 27^th May 1984, Bangladesh Bank advised to follow the following guidelines:

A.    Savings Bank Account: Interest will be paid upto the date of withdrawal/closing of the account irrespective of the date of expiry of the depositor.

B.     Fixed Deposit Accounts:

1.      Premature Encashment: Interest should be paid and recovery of penal interest made in accordance with prevalent instructions regarding premature encashment.

2.      Encashment at Maturity: Interest should be paid upto date of maturity at the rate applicable for the relevant FDR.

3.      Encashment beyond Maturity: Interest upto the period of maturity should be paid at the rate application for the relevant FDR. Interest for the period beyond the date of maturity should be paid at the rate applicable for savings bank accounts with chequing facilities.

C.     Loan Accounts: Banks may charge interest on loan accounts till liquidation of outstanding bank dues. They should however pursue with successor to adjust the loan accounts at the earliest to avoid accumulation of interest burden.