In a significant move to empower depositors and streamline the process of wealth succession, the Reserve Bank of India (RBI) has rolled out the new Banking Companies (Nomination) Rules, 2025. These rules, which came into effect on November 1, 2025, are part of the broader Banking Laws (Amendment) Act, 2025, and are set to fundamentally change how nominations for bank accounts, safe deposit lockers, and articles in safe custody are handled across India. For millions of account holders, this is a crucial update that simplifies inheritance, minimizes disputes, and enhances transparency in the banking system.
The primary objective behind this reform is to address the long-standing challenges faced by the legal heirs of deceased depositors. Previously, the absence of a clear nomination or the complexities involved in claim settlements often led to protracted legal battles and delays in accessing funds. The new framework aims to create a more uniform, transparent, and efficient system for claim settlements, ensuring that the rightful heirs receive their entitlements without procedural hurdles.
What Are the Key Changes in the New Bank Nomination Rules 2025?
The amendments introduce several depositor-friendly features. Understanding these changes is the first step toward securing your family’s financial future.
1. Nomination of Multiple Individuals (Up to Four)
Perhaps the most impactful change is the provision allowing an account holder to nominate up to four individuals for a single account or locker. This is a major departure from the previous system, which was often restrictive. Under the new rules, you can designate multiple nominees and even specify the percentage or share of the deposit that each nominee will receive, ensuring the total allocation adds up to 100%. This feature is invaluable for individuals who wish to divide their assets among several family members, such as their spouse and children, without creating separate accounts for this purpose. It provides clarity and legally solidifies the depositor’s intentions, reducing the scope for future conflicts.
2. Introduction of Successive Nomination
The concept of “successive nomination” is another groundbreaking addition, particularly for safety lockers and articles kept in safe custody. This allows a depositor to create a hierarchical chain of nominees. For instance, you can name your spouse as the primary nominee and your child as the successive nominee. In this scenario, the child becomes the entitled claimant only upon the death of the primary nominee. For bank deposits, customers have the flexibility to choose between simultaneous nomination (where all nominees share the entitlement) and successive nomination, depending on their family structure and preferences. This forward-thinking provision accounts for various life contingencies and ensures a smooth transfer of assets across generations.
3. Mandatory Information and Voluntary Choice
While the RBI has made it mandatory for banks to inform every customer about the nomination facility at the time of opening an account, making a nomination remains entirely voluntary. Banks are now required to proactively explain the benefits of appointing a nominee. However, if a customer chooses not to nominate anyone, they can do so by providing a written declaration. Crucially, the RBI has clarified that banks cannot refuse to open an account solely on the grounds that the customer has declined to make a nomination. This strikes a balance between encouraging responsible financial planning and respecting the customer’s autonomy.
4. Streamlined and Time-Bound Processing
To enhance efficiency, the RBI has set clear timelines for processing nomination-related requests. Any request for registration, modification, or cancellation of a nomination must be completed by the bank within three working days. If there are any discrepancies or issues with the submitted form, the bank must inform the customer within the same three-day period. This ensures that customer requests are handled promptly, eliminating unnecessary delays.
5. Enhanced Transparency on Documents
For greater clarity and easy reference, nomination details will now be explicitly printed on passbooks, deposit receipts, and account statements. These documents will feature a “Nomination Registered” label, providing a clear confirmation to the account holder that their request has been officially recorded. This simple yet effective measure empowers customers by giving them a physical record of their nomination status.
6. Extension to Proprietorship Accounts
In a significant relief for small business owners, the nomination facility has been extended to proprietorship accounts. This allows sole proprietors to nominate individuals to receive the balances in their business accounts, offering the same protection and succession benefits that were previously available only to individual account holders.
Why Is Updating Your Nomination Crucial?
The nominee is essentially a trustee appointed by the account holder to receive the proceeds of the account on their behalf after their demise. While the nominee is legally authorized to receive the money from the bank, they are obligated to transfer it to the legal heirs as determined by succession laws or a will. However, a clear nomination significantly simplifies the process for your loved ones. Without a nominee, your family would be forced to undergo a cumbersome process involving succession certificates, court orders, and extensive paperwork, which can be both time-consuming and expensive.
With these new, flexible rules, there is no better time to review and update your nominations across all your financial instruments. Even if you have an existing nomination, it is wise to revisit it to see if you can better align it with your current wishes using the new multi-nominee or successive nominee features.
How to Update or Add a Nominee?
Banks have simplified the process for adding or changing a nominee. You can typically do this through:
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Internet Banking: Most banks allow you to add or modify a nominee directly through your online banking portal. This is the quickest and most convenient method.
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Mobile Banking App: Many banking apps now include a section for managing nominees.
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Visiting the Branch: You can always visit your bank branch and fill out the prescribed nomination form (Form DA1 for deposits).
For Non-Resident Indians (NRIs), these updates can be managed remotely for their NRE/NRO accounts via online banking or by sending a formal request through email, saving them the trouble of visiting a branch in India.
These reforms, part of the 19 amendments introduced in the Banking Laws (Amendment) Act, 2025, signify a major step towards creating a more resilient, transparent, and customer-centric banking sector in India. By taking a few minutes to update your nomination details, you can leverage these new rules to provide your family with financial security and peace of mind.