Mumbai: The Reserve Bank of India (RBI) has issued new guidelines regarding the nomination facility for bank accounts, safe deposit lockers, and items held in safe custody. These rules will come into effect from November 1, 2025.
According to the new regulations, all banks, including cooperative and rural banks, must provide customers with the option to nominate. Customers can choose to opt-out of nomination by submitting a written declaration, and banks cannot delay account opening due to this decision.
Receipt and Record of Nomination
RBI has instructed that banks must issue a receipt within three working days of receiving a nomination form. Additionally, 'Nomination Registered' should be mentioned in the passbook or term deposit receipt. The nominee’s name must also be recorded in the account details to ensure transparency and proper record-keeping.
Customer Rights and Changes
Customers will have the facility to register, cancel, or modify their nominations at any time. Banks must provide written acknowledgment for any such changes. If, for any reason, a bank refuses a nomination, it must inform the customer in writing within three working days, explaining the reason for rejection.
Multiple Nominees and Automatic Termination
RBI has clarified that if an account has more than one nominee and any nominee dies before receiving the funds, that nominee’s designation will automatically be considered terminated. These provisions align with RBI’s previous rules, which require settlement of claims of deceased account holders within 15 days. In cases of valid nomination or survivorship clauses, banks can release funds directly to the nominee or legal heirs upon the account holder’s death.
Impact of the New Rules
These guidelines aim to improve transparency and customer convenience. The nomination facility ensures a smooth transfer of funds or safe custody items to the intended beneficiary, reducing delays and disputes after the account holder’s death. All banks are now required to comply strictly with these rules to maintain accountability and protect customer interests.
