Bank Nomination and Deceased Depositor Claims: RBI Rules Every Account Holder Should Know

What has changed

Bank nomination is one of the simplest ways to reduce delays for a family after the death of an account holder. RBI's customer guidance says nomination is available for bank deposit accounts and lockers and helps facilitate settlement of deceased-depositor claims.

What does a bank nominee do?

For a deposit account, nomination enables the bank to pay the balance to the nominee after the depositor's death, subject to the applicable banking law and the bank's claim process. RBI also provides nomination frameworks for articles kept in safe custody and safe-deposit lockers.

Nomination is primarily a bank-settlement mechanism. Customers should not treat it as a substitute for broader succession or estate planning, especially where family or inheritance rights may need separate legal consideration.

What happens in a joint bank account?

RBI's current consumer guidance specifically states that, in a joint deposit account, the nominee's right arises only after the death of all account holders. This is an important distinction for accounts operated under survivor instructions.

For example, if A and B hold a joint deposit and have registered C as nominee, the nomination does not ordinarily mean C steps into the account merely because A dies while B survives. The account's joint-holding and survivorship terms must first be applied.

Can nomination cover a bank locker?

Yes. RBI guidance recognises nomination for safe-deposit lockers as well as deposit accounts. The Banking Regulation Act framework also provides for release of locker contents to the nominee after the death of the locker hirer, subject to the prescribed inventory and bank procedure.

Customers who have nominated someone for a savings or fixed-deposit account should not assume that the same nomination automatically covers a separately hired locker. Nomination records should be checked for each relevant banking relationship.

How quickly should a deceased-depositor claim be settled?

RBI's customer guidance states that banks are required to settle deceased-depositor claims within 15 days from receipt of the claim, subject to receipt of proof of death and satisfactory identification of the claimant. RBI's customer-service instructions likewise state that payments to survivors or nominees should be released within a period not exceeding 15 days after the required proof and identification are received.

The practical starting point for a claimant is therefore to ask the bank for its deceased-claim form and documentary checklist and submit a complete claim with proof of death and identification.

Does a fixed deposit renewal cancel an existing nomination?

RBI's nomination instructions state that a nomination, cancellation or variation does not cease to be in force merely because the deposit is renewed. Even so, depositors should periodically check that the bank's records correctly reflect their current nomination choice.

Can a nominee be changed later?

The nomination framework permits cancellation and variation during the relevant banking relationship. Banks are required to register nomination changes in their records. A customer whose family circumstances have changed should therefore review old nominations rather than assuming the original choice remains appropriate.

Practical nomination checklist

- Check every deposit relationship: review savings, current and term-deposit accounts held in an individual capacity.

- Review joint accounts separately: understand the survivor instructions and remember that the nominee's right in a joint deposit arises after the death of all depositors.

- Check lockers and safe custody: these have their own nomination framework and should not be overlooked.

- Verify the bank's record: ask the bank to confirm whether nomination is registered and whether the nominee details remain current.

- Update after major life events: review nominations after marriage, death, divorce or other material family changes.

- Keep succession planning separate: nomination helps the bank discharge the claim but should be coordinated with the depositor's wider estate and succession arrangements.

Key takeaway

Bank nomination can materially simplify the operational settlement process after an account holder's death. RBI says deceased-depositor claims should be settled within 15 days after the bank receives the required claim, proof of death and satisfactory identification. Joint-account holders should remember that the nominee's right arises only after all account holders have died, and customers should review nominations separately for deposits and lockers.