New Bank Nomination Rules 2025

The Ministry of Finance has announced that new provisions under the Banking Laws (Amendment) Act, 2025 — relating to nomination facilities, claim settlement, and depositor protection — will come into effect from November 1, 2025. These reforms mark a major step toward improving transparency, flexibility, and uniformity in the banking system.

Legal Background

• The Banking Laws (Amendment) Act, 2025 was notified on April 15, 2025.
• It includes 19 amendments across five key legislations:
  • Reserve Bank of India Act, 1934
  • Banking Regulation Act, 1949
  • State Bank of India Act, 1955
  • Banking Companies (Acquisition and Transfer of Undertakings) Acts, 1970 and 1980
• As per the notification, Sections 10, 11, 12, and 13 — dealing with nomination facilities — will come into force on November 1, 2025.

Objectives of the New Provisions

• Simplify and standardize the nomination process across all banks.
• Ensure faster claim settlement for depositors’ nominees.
• Strengthen governance and depositor protection.
• Enhance customer convenience and transparency in the banking ecosystem.

Key Features of the New Nomination Rules

1. Multiple Nominations (Up to Four)

• Depositors can now nominate up to four persons for their bank accounts, fixed deposits, lockers, and safe custody articles.
• This is the first time such flexibility is being introduced in Indian banking law.

2. Simultaneous Nomination

• Customers may nominate up to four individuals simultaneously.
• Each nominee’s entitlement share (percentage or portion) must be clearly specified, with the total equalling 100%.
• Enables transparent and proportionate fund distribution among nominees.

3. Successive Nomination

• Customers may also opt for successive nominations, where nominees are prioritized in sequence.
• If the first nominee passes away, the next nominee automatically becomes operative — ensuring continuity in claim settlement.
• For lockers and articles kept in safe custody, only successive nominations are allowed.

4. Simplified Claim Settlement

• The provisions are designed to make post-death claim settlements faster and dispute-free, protecting depositors’ families.

5. Uniform Implementation

• To ensure consistency across banks, the government will soon notify Banking Companies (Nomination) Rules, 2025.
• These rules will define standard forms and procedures for making, modifying, or cancelling nominations.