Bank Nomination Rules Get Major Overhaul: Depositors Can Name Up To Four Nominees
The reforms cover deposit accounts, articles kept in safe custody, and the contents of safety lockers maintained with banks.
The Ministry of Finance has announced that key provisions of the Banking Laws Amendment Act, 2025, related to nomination facilities will come into force on November 1, 2025. These provisions are designed to significantly strengthen customer convenience and ensure transparency, efficiency in claim settlement by allowing depositors the flexibility to make up to four nominations for their holdings.
The reforms cover deposit accounts, articles kept in safe custody, and the contents of safety lockers maintained with banks. The new rules aim to enhance depositor protection and streamline succession across the banking sector, as part of the broader Act, which also focuses on improving governance standards and audit quality in public sector banks, according to a statement posted by PIB Delhi.
The central feature of these upcoming changes is the introduction of two distinct methods for customers to designate their beneficiaries:
Available for deposit accounts, depositors may name up to four persons and must specify the exact share or percentage of entitlement for each, ensuring the total equals 100%. This provides unambiguous guidance for distribution.
Applicable to deposits, safe custody articles, and lockers, this allows individuals to list up to four nominees. The rule specifies that the next nominee becomes operative only upon the death of the nominee placed higher, ensuring clarity of succession and continuity in settlement.
It is important to note that while deposit accounts permit either simultaneous or successive nominations, only the successive method is permitted for articles in safe custody and safety lockers.
The Banking Companies Nomination Rules, 2025, which will detail the procedure and prescribed forms for making, cancelling, or specifying these multiple nominations, are expected to be published shortly to operationalize the provisions uniformly across all banks. These measures follow an earlier implementation on August 1, 2025, of other sections of the Amendment Act aimed at strengthening overall banking governance.
