OD on FD -Bank asking to pay OD to renew FD

[Sohil Doshi]

Hi all,

i have FD of some amount from last 11 months and I have taken OD around 9 months back on that FD. Now since 11 months are over so PNB bank manager is asking me to pay whole amount of OD to renew FD otherwise they will dissolve FD and pay the OD.

i want to continue FD & OD as well dont want to dissolve FD

 

[TaxWiser]

Hi all,

i have FD of some amount from last 11 months and I have taken OD around 9 months back on that FD. Now since 11 months are over so PNB bank manager is asking me to pay whole amount of OD to renew FD otherwise they will dissolve FD and pay the OD.

i want to continue FD & OD as well dont want to dissolve FD

Punjab National Bank (PNB) generally liquidates the fixed deposit (FD) automatically on maturity to adjust any outstanding overdraft (OD) amount against that FD. This is a standard practice: when your FD matures, the bank first recovers any unpaid OD dues from the FD proceeds, and only the remaining balance is credited to your account.

Key points from PNB’s policies:

• The OD against FD is only valid up to the FD’s maturity date or a maximum of three years, whichever is less.
• On maturity, the OD liability is settled from the FD proceeds. If you want to renew the FD, you must first clear the OD in full.
• Auto-renewal of FD is not permitted when an OD is active. The system cancels any auto-renewal mandate before granting an OD against an FD.
• Partial withdrawal or extension of both FD and OD together is not allowed. You must repay the OD to renew the FD; otherwise, the bank will close the FD to recover the OD.

Your options:

• Repay the entire OD amount before the FD matures. Once the OD is cleared, you can request renewal of your FD for a new term.
• If you do not repay the OD, the bank will dissolve (close) the FD on maturity and use the proceeds to settle the OD.

You cannot continue both the existing FD and the OD beyond the FD’s original maturity date. This is due to regulatory and system constraints on such products.

If you want to continue both facilities, you may Repay the current OD and renew the FD, then apply for a new OD against the renewed FD.

Note: For further assistance or to discuss possible alternatives, visit your PNB branch and speak directly with the manager.

(Source: Conversation with Gemini AI)