Bank Nomination and Deceased Depositor Claims: RBI Rules Every Account Holder Should Know
Two changes in the last year have reshaped how bank nominations and deceased-depositor claims work. Nomination provisions of the Banking Laws (Amendment) Act, 2025 took effect on 1 November 2025, allowing up to four nominees. And the Reserve Bank of India (Settlement of Claims in respect of Deceased Customers of Banks) Directions, 2025 (RBI/2025-26/82, dated 26 September 2025) have applied from 31 March 2026, setting a 15-day settlement deadline with compensation for delay.
Up to four nominees
According to the Ministry of Finance release of 23 October 2025, Sections 10 to 13 of the Banking Laws (Amendment) Act, 2025 were notified to take effect from 1 November 2025 by Gazette notification S.O. 4789(E) dated 22 October 2025. The key changes are:
- a customer can nominate up to four persons;
- for deposit accounts, the depositor may choose simultaneous or successive nomination;
- in a simultaneous nomination, the depositor fixes each nominee's share, and the shares must total 100%;
- in a successive nomination, the next nominee becomes operative only on the death of the nominee ranked above;
- for articles in safe custody and safe deposit lockers, only successive nomination is allowed.
The release said the Banking Companies (Nomination) Rules, 2025 would be published to prescribe the procedure.
The 15-day settlement rule
The RBI Directions apply to commercial and co-operative banks. Their main timelines and penalties are:
| Item | Deadline | Compensation if the bank is late |
|---|---|---|
| Deposit accounts | 15 calendar days from receipt of all required documents | Interest at Bank Rate plus 4% a year on the claim amount |
| Safe deposit lockers and safe custody articles | 15 calendar days from receipt of all required documents | Rs 5,000 for each day of delay |
Where there is a nominee or survivor
Where the account has a valid nomination or a survivorship clause such as "either or survivor", "anyone or survivor" or "former or survivor", the bank must not ask for a succession certificate or similar legal document. A claim form, death certificate and identity proof of the claimant are enough, and payment to the survivor or nominee is a valid discharge of the bank's liability.
The nominee receives the money as a trustee of the legal heirs of the deceased. Banks must say this in writing. Nomination speeds up the bank's payment but does not decide who finally inherits, so it should sit alongside a will or other succession plan.
Where there is no nomination
The Directions set a simplified route up to a threshold of Rs 15 lakh for most banks and Rs 5 lakh for co-operative banks (banks may set higher limits). Below the threshold, the claimant gives a claim form, death certificate, identity document, indemnity bond, disclaimer letters from other heirs, and either a legal heir certificate or an affidavit. Above it, the bank may ask for a succession certificate, or a legal heir certificate or affidavit sworn before a notary or magistrate, and possibly a surety.
Other points for families
- Term deposits can be closed early on the depositor's death without any penal charge, even during a lock-in period.
- Locker contents are inventoried in the presence of two independent witnesses who are not bank employees, along with bank staff, and recorded in a standard form.
- For a missing person, a court order on presumption of death is generally needed; for amounts up to Rs 1 lakh, an FIR and a police non-traceable report can be accepted instead.
What account holders should do
- Confirm with each bank that a nomination is registered for every account, deposit, locker and safe custody article.
- Consider adding more nominees and choose between simultaneous shares and successive order for deposits.
- Review joint accounts: survivorship terms decide who is paid first when one holder dies.
- Update nominations after marriage, divorce, a death in the family or other major changes.
- Keep the will and nominations consistent, since the nominee holds the money for the legal heirs.
Updated on 27 September 2026: Added the four-nominee rules under the Banking Laws (Amendment) Act, 2025 and the RBI Settlement of Claims Directions, 2025, including the 15-day deadline, compensation for delay, documentation thresholds and trustee status of nominees; removed statements that could not be verified against current official sources.
