New Nomination Rules for Bank Accounts, Deposits, & Lockers

Major Reforms in Nomination Rules for Bank Accounts, Deposits, and Lockers

The Government of India has enacted the Banking Laws (Amendment) Act, 2025, introducing major reforms to nomination rules for bank accounts, deposits, and safety lockers. Significant reforms to nomination rules governing bank accounts, deposits, and safety lockers have come into effect from November 1, 2025. These amendments under Banking Laws (Amendment) Act, 2025 & RBI (Nomination Facility in Deposit Accounts, Safe Deposit Lockers and Articles kept in Safe Custody with Banks) Directions, 2025 bring enhanced flexibility, transparency, and customer protection in managing nominations and claim settlements.

Objective & Impact Nomination Rules for Bank Accounts, Deposits, & Lockers:

• This change is cover the Scope Applies to deposit accounts, articles in safe custody, and contents of safety lockers maintained with banks. These changes aim to simplify claim settlements, enhance depositor security, and reduce succession-related disputes
• These reforms are designed to Simplify claim settlements for legal heirs and nominees; Reduce unclaimed deposits and improve customer service efficiency; Minimize legal disputes and the need for court intervention after a depositor’s death & Enhance transparency and depositor protection across the banking sector.
• Multiple Nominations is greater Flexibility, and it effect that Depositors can now appoint up to four nominees, either simultaneously or successively. This provision allows smoother management and claim settlement in case of the depositor’s demise.

What are the nomination options in this change:

• Multiple Nominations allowed that allow Customers can nominate up to 4 persons, either simultaneously or successively. Deposit Accounts Both simultaneous and successive nominations allowed. & Safe Custody & Lockers is Only successive nominations permitted. Moreover that Simultaneous Nomination : Up to 4 nominees with specified share/percentage (must total 100%).
• Successive Nomination Next nominee becomes operative only upon the death of the previous nominee.
• Account Holder must review and update your existing nominations as per the new provisions. Utilize flexibility to ensure your deposits and valuables are smoothly transferred as per your wishes.
• Provisions under Sections 10, 11, 12, and 13 of the Banking Laws (Amendment) Act, 2025 will come into force from 1st November 2025.
• This change comes up with Enhance flexibility, uniformity, transparency, and efficiency in claim settlement. This change is Strengthen governance, depositor protection, and customer convenience.
• This change comes up with next steps; Banking Companies (Nomination) Rules, 2025 will detail procedures and forms for making/cancelling nominations.

What are the key features reforms in Nomination Rules for Bank Accounts, Deposits, and Lockers?

Following are basic key changes under this Reforms in Nomination Rules for Bank Accounts, Deposits, and Lockers

• Multiple Nominees Enhanced Flexibility: Customers can now nominate up to four individuals for a single account, deposit, or locker. This replaces the earlier restriction of a single nominee, allowing broader inclusion of family members or dependents.
• Two Nomination Methods for Deposit Accounts

(a) Simultaneous Nomination: Multiple nominees can be appointed at the same time, with specific percentage shares (totalling 100%). Account Holder must ensures transparent and proportional distribution of the deposit amount. Simultaneous Nomination is Transparent Distribution impact following :

• • • • Up to four nominees can be appointed with specified shares (totaling 100%).
      • Ensures transparent allocation and fair distribution among nominees.

(b) Successive Nomination: Nominees are listed in order of priority. The next nominee becomes eligible only upon the death of the previous one(s). This method applies to deposits, safety lockers, and articles in safe custody. Successive Nomination is Priority-Based Continuity which impact that Nominees can be listed in order of priority (up to four). The next nominee’s right becomes effective only upon the death of the previous nominee. Provides clarity and continuity in asset transfer.

• Locker and Safe Custody Rules : For safe deposit lockers and articles kept in safe custody, only successive nominations are permitted. This ensures clear succession and minimizes disputes.
• Mandatory Offer of Nomination : Banks are required to explicitly inform customers about the nomination facility at the time of account opening. Customers must be made aware of its benefits and procedures.
• Opt-Out Provision : Customers may choose not to nominate anyone but must provide a written declaration confirming the decision. Banks cannot refuse or delay account opening due to a customer’s decision not to nominate.
• Transparency and Timelines : Banks must acknowledge all nomination-related requests — registration, cancellation, or modification — within three working days. The nominee’s name and status (“Nomination Registered”) must appear on Passbooks, Account statements, Term deposit receipts
• Digital and E-Nomination Facility : Banks may offer electronic nomination (e-nomination) through internet or mobile banking. Account Holder requests must be authenticated securely, and customers must receive confirmation alerts upon registration.
• Minor Nominees : If the nominee is a minor, the depositor must appoint an adult custodian to receive funds on the minor’s behalf until they turn 18 years old.

Implications & Action Points For Bank Account holder

• Review Existing Nominations: If you have bank accounts, term deposits, safe custody articles, or locker facilities, check your nomination(s) under the old structure. With the new rules, you may want to update to include up to four nominees and consider your share allocations (for simultaneous nomination) or priority order (for successive nomination).
• Decide Between Simultaneous vs Successive: For deposits, you could choose simultaneous (to split among nominees) or successive (priority list). For lockers/articles, you must do successive only. Make your choice based on your estate/succession plan.
• Ensure Documentation is in Order: When making or updating nomination, get acknowledgement from your bank within the specified timeframe and ensure nominee details appear on the statement/passbook.
• Link With Your Estate Planning: Nomination is a convenience for bank claim settlement — it does not replace your Will or succession law obligations. Ensure that the nomination aligns with your broader financial‐estate plan to avoid potential conflicts.
• Banks’ Obligation: Banks are now required to offer nomination, cannot use non‐nomination as reason to deny account/locker opening, must implement timely systems for registration/variation, and must include the nominee’s name in customer documentation.
• For Minor Nominees: If you designate a minor, nominate an adult guardian so that the bank can pay out smoothly when due.
• Periodic Review: Beneficiary circumstances may change (e.g., marriage, divorce, death, or addition of children). Review nomination entries periodically to ensure alignment with your wishes.

In summary, for the deposit accounts option, choose between simultaneous or successive nominations. For articles in safe custody and safety lockers only successive nominations are allowed to ensure clear succession. There are few key Benefits of the new nomination rules. Enhanced flexibility and security for depositors; Streamlined asset transfer and claim settlement process; it will reduce disputes and litigation among nominees & minimize the need for probate or other judicial interventions.

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