Rights of mentally challenged persons

These persons face a number of obstacles when it comes to banking services
Representational Image
Representational Image

Our banking industry has classified its customers into various segments. Under this segmentation process they group customers based upon their similarities they share with respect to any dimensions relevant to their business - whether it be customer needs, channel preferences, interest in certain product features, customer profitability, etc.

But this segmentation is flawed, as there’s no such mention of the disabled persons where the banks have a special strategy in place to cater to the needs of persons with disabilities. We have been witnessing a lot of tailor-made financial products and services for general customers. But none has been tailor-made for these special persons. In fact, the impression has been carried that these kinds of people don’t need banking products and services, but charity.

There are specific Reserve Bank of India (RBI) notifications that mandate banks to offer banking facilities in a non-discriminatory manner to all customers. Nevertheless, there are many problems faced by people with disabilities while accessing banking services.

For example, if one is visually impaired or a low vision person walks into a branch to open a bank account, chances are that most banks will not open his independent bank account. They will either insist that he should open a joint bank account with a sighted person or open a bank account with no cheques book facility or both. What we have seen is that even these policies are not consistent from bank to bank.

Even as banks have policies in place to deal with persons having disabilities, the fact is that no bank has trained personnel who can deal with these special customers.

For instance, if a person who is hard of hearing walks into a bank branch for availing benefits of a scheme or service, the branch does not have trained staff who can understand or interpret the sign language. This means that a disabled person always has to latch on to someone who is fully capable to help them.

There is a dire need to mitigate the sufferings of this class of customers and the banks have to tailor special  schemes, both in deposit and loan segments, for them.

They have to understand that making banking accessible for them in a hassle-free manner would always be a best practice that should be followed and would be a sound commercial decision. Besides, it would be one of the best corporate social responsibility initiatives.

They should use technology like making ATMs disabled-friendly and throwing net banking facilities in their way to bridge them like other customers. This would ease their  lot of accessibility issues like the physical accessibility to branches and ATMs, signature mismatches due to disability factor etc. 

Remarkably, the rights of disabled persons stand recognised under various legal instruments and they are to be given the services and privileges at par with other members of the society. As guaranteed in the right to equality and the right to life, enshrined in the fundamental rights in our constitution, it is an obligation to provide equal opportunities and facilities to everyone , irrespective of any disabilities they might suffer from. 

Notably, there are over 2.50 crore persons with disabilities including persons with visual, hearing, speech, locomotor and mental disabilities in the country. These persons face a number of obstacles when it comes to living a normal life.

It is worth mentioning that the United Nations Convention on the Rights of Persons with Disabilities clearly commits to rights of persons with disability and their access to services. Article 9 of the Convention enables persons with disabilities to live independently and participate fully in all aspects of life and also gives them access to facilities and services open or provided to the public, both in urban and rural areas.

Additionally, Article 12 states “ Parties shall take all appropriate and effective measures to ensure the equal right of persons with disabilities to own or inherit property, to control their own financial affairs and to have equal access to bank loans, mortgages and other forms of financial credit, and shall ensure that persons with disabilities are not arbitrarily deprived of their property.”

Can banks open accounts of a mentally challenged person? What is the procedure?

Rules envisage that mentally challenged people are eligible to open bank accounts and operate them with ease.  The Reserve Bank of India (RBI) has  directed the banks to open such accounts with the Guardianship Certificate. Whereas previously the Guardian in case of mentally retarded persons was appointed under Mental Health Act. However, after repealing the Mental Health Act, the guardian for the mentally challenged persons is now to be appointed under The National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999. The Act empowers a Local Level Committee to appoint a guardian, to a person suffering from any of the conditions relating to autism, cerebral palsy, mental retardation or a combination of any two or more of such conditions and includes a person suffering from severe multiple disabilities.

The accounts can be opened and operated by the legal guardian as long as he remains the legal guardian. Banks have been strictly advised to rely upon the Guardianship Certificate  for opening and operating bank accounts.

What is the status of the bank account when the accountholder suffers mental incapacity?

It is a very delicate job for bankers to deal with accounts of mentally ill persons. According to the rules,whenever banks learn that one of their customers is incapable of operating the account due to mental incapacity the operation in such a customer’s account would be immediately suspended.  As per the law, a contract with the mentally unsound person is void ab initio. Banks  in such cases rely upon the ‘Guardianship Certificate’.

Though the persons of unsound mind are disqualified from contracting, the disqualification does not apply to contracts already entered into by the mentally ill persons, during the period of their sanity or contracts which are ratified by them during such period.  Once a bank receives information that their account holder  has been declared mentally incapable, it will immediately stop the operation immediately in the customer’s account.

Meanwhile, the law envisages that if a Power of Attorney is operating the account, the authority to operate the account should be stopped when the customer himself becomes mentally incapable to operate the account.  The same rule applies to the operation of accounts with joint names, when one of them becomes mentally incapable, the operation in the account will be stopped.

DISCLAIMER: The views and opinions expressed in this article are the personal opinions of the author.

The facts, analysis, assumptions and perspective appearing in the article do not reflect the views of GK.

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