Context:
The Reserve Bank of India (RBI) has issued revised directions on the nomination facility available for deposit accounts, safe deposit lockers, and articles kept in safe custody.
These guidelines aim to simplify claim settlements and ensure ease of access for nominees after the account holder’s death, while maintaining customer freedom of choice.
Key Highlights:
1. Applicability
- Effective Date: 1 November 2025
- Covered Entities:
- Deposit Accounts (Savings, Current, Fixed Deposits, etc.)
- Safe Deposit Lockers
- Articles in Safe Custody with Banks
2. Nomination – Not Mandatory
- Banks must inform customers about the availability and advantages of the nomination facility.
- However, opting for a nomination is entirely voluntary.
- No account opening can be denied or delayed if a customer chooses not to nominate.
3. Customer Declaration
- If a customer does not wish to nominate, they must provide a written declaration to that effect.
- If the customer refuses to provide a written declaration, the bank shall record this refusal in its system.
- Banks cannot impose restrictions or delay account opening on this ground.
4. Multiple Nominees (As per Banking Laws Amendment Act, 2025)
- Customers can nominate up to four simultaneous nominees for their account or locker.
- The percentage of entitlement/share for each nominee must be clearly specified.
- Successive nominations are permitted — meaning the next nominee becomes operative only after the previous nominee’s death.
5. In Case of Nominee’s Death
- If a nominee dies before receiving the deposit or asset, that nomination becomes ineffective.
- The settlement of such deposits will follow rules applicable to accounts without nominees.
6. Bank Obligations
- Banks must maintain proper systems to:
- Register nominations
- Record cancellations
- Update variations as per customer requests
- Nomination details should be clearly reflected in bank records and confirmed to the customer.
7. Claim Settlement Simplification
- The primary objective is to facilitate expeditious and hassle-free claim settlement for nominees/legal heirs.
- Helps prevent legal complications or delays after the account holder’s demise.
Objective of the Revised Framework
- Enhance ease of banking for customers and their families
- Ensure uniformity and transparency across all banks
- Balance customer autonomy with operational efficiency
