New Banking Rules: Up To Four Nominees Allowed In Savings, Locker Accounts

The Lok Sabha on December 3 passed the Banking Laws (Amendment) Bill that will allow account holders to nominate up to four nominees for their savings and locker accounts. The new law will be effective once passed by Rajya Sabha and approved by the president.

The new law will allow bank customers to name up to four nominees for their bank accounts, fixed deposits and recurring deposits. The changes replace the current single-nominee system for bank accounts or fixed deposits with an aim to make it easier to distribute funds after the death of any account holder.

Nominees have access to bank deposits, articles or locker items in the event of death of the account holder. As per the changes, nominees can be named successively or simultaneously for bank deposits. However, for other purposes, they can only be named sequentially.

In case of multiple nominees being nominated together, the nomination will be effective in a predetermined proportion. For subsequent nominations, the nominee standing higher in nomination order gets priority.

“The Banking Regulation Act allows single or joint deposit holders to appoint a nominee for their deposit. Such a nominee can also be appointed for items left in custody of a bank or for a locker hired from a bank. The nominee can access the deposit, articles, or locker in case of death of the person who nominated him. The Bill allows the appointment of up to four nominees for these purposes. For deposits, such nominees can be appointed either successively or simultaneously while for other purposes they can be appointed successively. In case of simultaneous nominees, the nomination will be effective in a declared proportion. For successive nomination, the nominee who has been named higher in the order of nomination will receive priority," states the Banking Laws (Amendment) Bill, 2024.