Bank depositors can now nominate up to four persons for their deposit accounts—either simultaneously or successively—and must specify the percentage share of entitlement that each nominee will receive such that the total adds up to 100%, as per the key provisions relating to nomination under the Banking Laws (Amendment) Act, 2025 that will come into effect from November 1.
The Ministry of Finance announced on Thursday that the key provisions of the Act will significantly alter nomination rules for bank accounts, items held in safe custody and safety lockers.
“Individuals maintaining deposits, articles in safe custody, or lockers may specify up to four nominees, where the next nominee becomes operative only upon the death of the nominee placed higher, ensuring continuity in settlement and clarity of succession. The implementation of these provisions will give depositors the flexibility to make nominations as per their preference, while ensuring uniformity, transparency, and efficiency in claim settlement across the banking system,” stated the notification issued by the ministry on Thursday.
Under the revised framework, depositors will be able to nominate up to four individuals for their accounts, distributing specific percentage shares among them so that the total equals 100%. This option will be called the simultaneous nomination, which allows multiple beneficiaries to claim their respective portions directly. In contrast, successive nomination will have a priority sequence—where the next nominee’s right arises only after the preceding nominee’s death—ensuring an orderly transfer of funds.
While both forms of nomination will be permitted for deposit accounts, the rules for safety lockers and items held in safe custody will allow only successive nominations. Officials said this distinction has been made to simplify the settlement process and avoid disputes over physical valuables stored in banks.
The Banking Laws (Amendment) Act, 2025—under which these provisions take effect—seeks to bolster governance and transparency across the financial system. The legislation also aims to bring greater uniformity in how banks report to the Reserve Bank of India (RBI), enhance depositor and investor protection, and improve audit quality, particularly in public sector banks.
By expanding nomination flexibility and codifying procedures for different types of accounts, the government hopes to make banking more accessible and customer-friendly. The amendments also reflect a broader effort to reduce unclaimed deposits and streamline the claims process, aligning with the broader agenda of strengthening consumer rights and operational efficiency within the banking sector.
These amendments stem from broader reforms introduced in the Act, which covers amendments to five major legislations including the Banking Regulation Act, 1949 and the Reserve Bank of India Act, 1934. According to the finance ministry, the changes are aimed at enhancing clarity, transparency and uniformity in claim settlements across the banking system—and reducing unclaimed deposits running into tens of thousands of crores.
