Question: A bank received a claim relating to a customer who had been reported missing. Without completing the legal requirements specified under its Board - Approved policy, the bank approved and settled the claim in favour of the claimant. As per the RBI Master Circular on Customer Service in Banks, 2014, was the bank's decision consistent with prescribed requirements?
Answer: No, the RBI Master Circular requires banks to settle claims relating to missing persons only after complying with their Board -Approved policy and the applicable legal requirements. Since the bank settled the claim without completing these requirements, its decision was not consistent with the prescribed guidelines.

Supporting evidence:
title: rbi.org.in/72MC010714CS.pdf
quote: The settlement of claims in respect of missing persons would be governed by the provisions of Section 107 / 108 of the Indian Evidence Act, 1872 Banks are advised to formulate a policy which would enable them to settle the claims of a missing person after considering the legal opinion and taking into account the facts and circumstances of each case
context: vor(s) / Legal Heir(s) whenever a claim is received from them.
Banks should view these instructions as very critical element for bringing about significant improvement in the quality of customer service provided to survivor(s) / nominee(s) of deceased depositors / locker hirer / depositor of safe custody articles.

22.1 Settlement of claims in respect of missing persons

Banks are advised to follow the following system in case a claim is received from a nominee / legal heirs for settlement of claim in respect of missing persons :-
The settlement of claims in respect of missing persons would be governed by the provisions of Section 107 / 108 of the Indian Evidence Act, 1872. Section 107 deals with presumption of continuance and Section 108 deals with presumption of death. As per the provisions of Section 108 of the Indian Evidence Act, presumption of death can be raised only after a lapse of seven years from the date of his/her being reported missing. As such, the nominee / legal heirs have to raise an express presumption of death of the subscriber under Section 107/108 of the Indian Evidence Act before a competent court.
If the court presumes that he/she is dead, then the claim in respect of a missing person can be settled on the basis of the same.
Banks are advised to formulate a policy which would enable them to settle the claims of a missing person after considering the legal opinion and taking into account the facts and circumstances of each case. Further, keeping in view the imperative need to avoid inconvenience and undue hardship to the common person, banks are advised that keeping in view their risk management systems, they may fix a threshold limit, up to which claims in respect of missing persons could be settled without insisting on production of any documentation other than (i) FIR and the non-traceable report issued by police authorities and (ii) letter of indemnity.

22.2 Settlement of Claims in respect of Missing Persons in Uttarakhand Disaster

In the aftermath of Uttarakhand Natural Disaster during June 14-20, 2013 the Office of the Registrar General of India, Ministry of Home Affairs, Government of India has devised a procedure for Registration of Death of Missing persons in Natural Calamities affected areas in Uttarakhand vide its circular F.No. 1/2/(Uttarakhand)/2011-VS-CRS dated August 16, 2013 (MHA Circular). A copy of MHA Circular is furnished at Annex VIII for reference. The MHA Circular has devised detailed procedure for registrati