Skip to main content

Nomination Facility in Banks

Reserve Bank of India (RBI) has issued directions on nomination facility in deposit accounts, safe deposit lockers and articles kept in safe custody with the banks.

What is the legal framework for nomination facility in banks?

Banking Regulation Act, 1949 (BR Act) contain provisions on nomination facility in banks.

Section 45ZA – Nomination for payment of depositors' money 

  • Where a deposit is held by a banking company to the credit of one or more persons, the depositor / all the depositors together, may nominate one person to whom in the event of his / their death, the amount of deposit may be returned by the banking company.
  • Where the nominee is a minor, the depositor shall appoint any person to receive the amount of deposit in the event of his death during the minority of the nominee.

Section 45ZC – Nomination for return of articles kept in safe custody with banking company 

  • Where any person leaves any article in safe custody with a banking company, such person may nominate one person to whom, in the event of his death, such article may be returned by the banking company.
  • Where the nominee is a minor, the person shall appoint any person to receive the article deposited in the event of his death during the minority of the nominee.

Section 45ZE – Release of contents of safety lockers 

  • Where an individual is the sole hirer of a locker from a banking company, such individual may nominate one person to whom, in the event of his death, the banking company may give access to the locker and liberty to remove the contents of the locker.
  • Where any such locker is hired from a banking company by two or more individuals jointly and under the contract of hire, the locker is to be operated under the joint signatures of two or more of such hirers, such hirers may nominate one or more persons to whom, in the event of their death, the banking company may give, jointly with the surviving joint hirers, access to the locker and liberty to remove the contents of such locker.

What are the survivorship clauses?

The joint accounts may be operated as per any of the following survivorship clauses –

  • either or survivor – account operated by either of the joint account holders (in case of 2 joint holders) and in the event of death of one of the account holders, by the surviving account holder.
  • anyone or survivor – account operated by any of the joint account holders (in case of more than 2 joint holders) and in the event of death of any of the account holders, by the surviving account holders.
  • former or survivor – account operated by first account holder and in the event of his / her death, by the surviving account holder.
  • latter or survivor – account operated by second account holder and in the event of his / her death, by the surviving account holder.

To which entities / accounts shall RBI directions be applicable?

  • The directions shall apply to –
    • Commercial banks and co-operative banks.
    • Deposit accounts, safe deposit lockers and articles kept in safe custody with the banks.
  • The directions shall not be applicable in case of Government savings schemes administered by banks such as Senior Citizen Savings Scheme (SCSS), Public Provident Fund (PPF), etc. Settlement of claims in such cases shall be as per the provisions of the respective schemes.

What are the advantages of nomination?

Appointing a nominee helps in simplification of the claim process in the event of the account holder’s demise and facilitates smooth and prompt transfer of funds to the nominee without legal complications.

Is nomination mandatory?

  • At the time of account opening, a bank shall explicitly inform the prospective customer of the availability, purpose and advantages of the nomination facility and offer him / her the option to avail the same. 
  • If the prospective customer chooses not to avail the nomination facility despite being fully informed, the bank shall proceed to open the deposit account without imposing any restrictions, if otherwise found eligible, after obtaining a written declaration from the individual confirming that he / she does not require the nomination facility. 
  • If he / she refuses to provide the written declaration, the bank shall record the fact of refusal to submit written confirmation in the account opening records.

Who can nominate?

  • Only individual account holders (single / joint accounts) are offered nomination facility. 
  • If an individual is keeping an account for his / her proprietorship business, it will be deemed as that individual’s account and the nomination facility will be offered in such accounts.
  • Nomination is not available for non-individual accounts like firm, company, trust, etc.

Who can be nominee?

Nominee can be an individual only. A firm, company, trust, etc. cannot act as nominee.

Can nomination be changed?

  • The nomination can be changed any number of times during the tenure of the deposit.
  • An acknowledgement shall be given by the bank to the customers within 3 working days of receiving the forms of registration, cancellation and / or variation of nomination, irrespective of whether the same is asked for by the customers.
  • Where a nomination request is found not to be in conformity with the provisions of the BR Act or the Rules and is consequently rejected, the bank shall inform the customer in writing, clearly indicating the reasons for such rejection, within 3 working days of the receipt of the request form.

Does nominee acquire ownership of account?

Nominee is a trustee for legal heirs for receiving the money / articles after the demise of the account holder. He / she does not acquire ownership of the money / articles.

Where are nomination details disclosed?

  • A bank shall record the status of nomination on the face of the passbook / Statement of Account and Term Deposit Receipt (TDR), with the legend "Nomination Registered".
  • A bank shall also indicate the name of the nominees in the Passbook / Statement of Accounts and TDR.

To whom shall the claim be settled?

The claims in respect of deceased customers shall be settled as below –

Status of account Claim settled to
Deposit accounts with nominees / survivorship clause Nominees / survivors
Deposit accounts without nominee / survivorship clause – aggregate amount payable, including accrued interest, as on the date of the application is less than / above the threshold limit* Claimants
Deposit accounts without nominee / survivorship clause – claims involving ‘Will’ Beneficiary in the Will
Safe deposit locker and Articles in safe custody – sole hirer with nomination Nominee
Safe deposit locker and Articles in safe custody – hired jointly with instructions to operate it under joint signatures, and any other individuals nominated Jointly to nominees and survivors
Safe deposit locker and Articles in safe custody – hired jointly with survivorship clause As per survivorship clause
Safe deposit locker and Articles in safe custody – without nominee / survivorship clause Claimants
Safe deposit locker and Articles in safe custody – without nominee / survivorship clause – claims involving ‘Will’ Beneficiary in the Will
* Threshold limit means ₹5 lakh in case of a co-operative bank and ₹15 lakh in case of any other bank.

  • In the case of a joint deposit account with or without survivorship clause, the nominee's right arises only after the death of all the depositors.
  • Post settlement of the deposit accounts, in case any credit is received in the name of a deceased depositor, the bank shall return the same to the remitter with the remark 'Account holder deceased' and intimate the nominees / survivors / legal heirs.
  • The nominees / legal heirs of a missing person shall get an order from the competent court under the provisions of Sections 110 or 111 of the Bharatiya Sakshya Adhiniyam, 2023. The claim shall be settled as per the procedure applicable for settlement of claims in respect of a deceased customer. Where the aggregate amount payable, including accrued interest, as on the date of the application is less than ₹1 lakh, a copy of the First Information Report (FIR) and non-traceable report issued by police authorities shall be obtained in lieu of death certificate or an order from a competent court declaring the civil death of the account holder. 
  • In case of simultaneous nomination, if any nominee dies prior to receiving the deposit from the bank, the nomination in respect of such nominee alone shall become ineffective. Accordingly, a bank shall settle the claims of the amount of deposit made in favour of such nominee in accordance with provisions applicable for accounts without nominee clause.

What is the procedure for submission of claims?

  • The standardised forms and other documents required for settlement of claims with respect to the deposit accounts / safe deposit locker / articles in safe custody kept by a deceased customer shall be made available in all the branches as well as on the bank’s website. 
  • Bank shall also display on its website, the list of documents to be submitted by a claimant and the procedure to be followed for settlement of claims in various scenarios.
  • A claimant shall be allowed to lodge the claim at any of the branches against acknowledgment.
  • A bank may provide the facility for online lodgement of claims. In such cases, if the bank requires the claimant to produce original documents for submission / verification, the same shall be allowed to be done at any of its branches.

What is the time limit for settlement of claims?

  • A bank shall settle a claim in respect of deposit accounts of a deceased customer within 15 calendar days from the date of receipt of all the required documents.
  • In case of safe deposit locker / articles in safe custody, the bank shall, within 15 calendar days of receipt of all the required documents, process the claim and communicate with the claimants for fixing the date for making inventory of the locker / articles in safe custody.

How much is the compensation for delay in settlement of claims?

  • For deposit related claim, if delay is attributable to the bank, compensation shall be paid by the bank in the form of interest, at a rate not less than the prevailing Bank Rate + 4% per annum, on the settlement amount due for the period of delay. The reference date for reckoning the amount due and the prevailing Bank Rate shall be the date of receipt of all required documents from the claimant.
  • For claims related to safe deposit locker / articles in safe custody, the bank shall pay compensation to the claimants at the rate of ₹5,000 for each day of delay.


References

Indian Banks' Association. (n.d.). 'Nomination Facility'. Retrieved from https://www.iba.org.in/customercare/nomination-facility.html

Reserve Bank of India. (2021, April 19). 'The Banking Regulation Act, 1949'. Retrieved from https://rbi.org.in/Scripts/OccasionalPublications.aspx?head=Banking%20Regulation%20Act

Reserve Bank of India. (2025, October 28). 'Reserve Bank of India (Nomination Facility in Deposit Accounts, Safe Deposit Lockers and Articles kept in Safe Custody with the Banks) Directions, 2025'. Retrieved from https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12919&Mode=0

Reserve Bank of India. (2025, September 26). 'Reserve Bank of India (Settlement of Claims in respect of Deceased Customers of Banks) Directions, 2025'. Retrieved from https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12901&Mode=0


Follow at - Telegram   Instagram   LinkedIn   X   Facebook

Labels:

Comments

Post a Comment

Popular Posts

Credit Cards and Debit Cards

Reserve Bank of India (RBI) has issued directions on issuance of credit cards and debit cards. To whom are the directions applicable? The directions are applicable to the following Regulated Entities (REs) – Commercial Banks  Small Finance Banks (SFBs) Regional Rural Banks (RRBs) Primary (Urban) Co-operative Banks (UCBs) Non-Banking Financial Companies (NBFCs) for all layers – NBFC-Investment and Credit Companies (NBFC-ICC) NBFC-Factor  NBFC-Micro Finance Institutions (NBFC-MFI)  Housing Finance Company (HFC)  What is a credit card? Credit Card is a physical / virtual payment instrument issued with a pre-approved revolving credit limit that can be used to purchase goods and services or draw cash advances. What is a debit card? Debit Card is a physical / virtual payment instrument linked to a Savings Bank / Current Account which can be used to withdraw cash, make online payments, do Point of Sale (PoS) terminal / Quick Response (QR) code transactions, fund transfer, e...
Post a Comment
Read more

Special Rupee Vostro Accounts (SRVAs)

Reserve Bank of India (RBI) has consolidated the guidelines governing Special Rupee Vostro Accounts (SRVAs). Who can open and maintain Special Rupee Vostro Accounts (SRVAs)? Authorised Dealer (AD) banks in India may open Special Rupee Vostro Accounts (SRVAs) of its branch outside India or a bank resident outside India. Which transactions can be settled through SRVA? The settlement of cross-border trade transactions through SRVA is an additional arrangement for invoicing, payment and settlement of exports and imports in Indian Rupee (INR).  All permissible capital and current account transactions under Foreign Exchange Management Act (FEMA) may be settled through the SRVA.  AD banks maintaining SRVA are permitted to open additional current account for exporter / importer, exclusively for settlement of export / import transactions. What can be the source and use of funds in SRVA? SRVA may be funded by way of inward remittances or transfer from other repatriable INR accounts in t...
Post a Comment
Read more

Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)

Reserve Bank of India (RBI) has issued the directions on maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) by banks. To whom are the directions applicable? The directions are applicable to the following Regulated Entities (REs) – Commercial Banks  Small Finance Banks (SFBs) Payments Banks (PBs) Local Area Banks (LABs) Regional Rural Banks (RRBs) Primary (Urban) Co-operative Banks (UCBs) Rural Co-operative Banks – State Co-operative Banks (StCBs) District Central Co-operative Banks (DCCBs) What is CRR? Every bank shall maintain in India by way of cash reserve, a sum equivalent to such percent of its Net Demand and Time Liabilities (NDTL) in India, as the RBI in terms of Section 42(1) of the RBI Act, 1934 (for scheduled banks) and Section 18(1) of the Banking Regulation Act (BR Act), 1949 (for non-scheduled banks) [including provisions of Section 18(1) of the BR Act as applicable to co-operative banks], may specify. What is incremental CRR? In terms of Secti...
Post a Comment
Read more

Payment of Agency Commission to Agency Banks (ABs) and Disbursement of Government Pension by ABs

Reserve Bank of India (RBI) has issued guidelines on the conduct of Government business by Agency Banks (ABs), payment of agency commission to ABs and disbursement of Government pension by ABs. Who are ABs? ABs mean all Public Sector Banks (PSBs), scheduled Private Sector Banks (PVBs), scheduled Payments Banks (PBs), and scheduled Small Finance Banks (SFBs) appointed by the RBI under Section 45 of the RBI Act, 1934, by mutual agreement, to carry out Government banking business of the Central Government (CG) / State Governments (SGs). What is agency commission? Agency commission means the remuneration paid by the RBI to an AB in consideration of it acting as an agent of the RBI in the conduct of general banking business of the CG and the SGs at the places and in the manner specified in the agreement between the RBI and the bank, with the exception of the functions relating to the management of the public debt. What are the guidelines on appointment of ABs? Any eligible bank which intend...
Post a Comment
Read more

What is Financial Inclusion (FI) Index? (Updated as on July 16, 2026)

Achieving complete financial inclusion is one of the important goals of the nations and central banks across the world. But how do we measure the extent to which the population of the country is financially included? Well, there is an index in India for this. What is Financial Inclusion (FI) Index? The composite Financial Inclusion (FI) Index was constructed by Reserve Bank of India (RBI) in August 2021, to capture the extent of financial inclusion across the country. FI-Index has been conceptualised as a comprehensive index incorporating details of banking, investments, insurance, postal as well as the pension sector in consultation with Government and respective sectoral regulators.   What are the parameters of FI-index? The FI-index comprises of three broad parameters (comprising of 97 indicators) with different weights assigned to each parameter. Ease of Access (35%) Availability and usage of services (45%) Quality of services (20%) The 'Quality' parameters captures the qua...
Post a Comment
Read more