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
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