RBI Issues New Directions on Nomination Facility in Bank Accounts and Lockers, Effective November 1

RBI Issues New Directions on Nomination Facility in Bank Accounts and Lockers, Effective November 1

NEW DELHI: Reserve Bank of India (RBI) has issued the Reserve Bank of India (Nomination Facility in Deposit Accounts, Safe Deposit Lockers and Articles kept in Safe Custody with the Banks) Directions, 2025, to simplify the settlement of claims and reduce hardship for families of deceased customers.

These directions, which align with the recently amended provisions of the Banking Regulation Act, 1949 and the Banking Companies (Nomination) Rules, 2025, will come effect from November 1, 2025.

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According to the RBI, the new framework follows the Banking Laws (Amendment) Act, 2025, which amended sections 45ZA, 45ZC, and 45ZE of the Banking Regulation Act. The updated rules aim to make the nomination process more transparent, faster, and uniform across banks.

Under the new guidelines:

• Banks must offer nomination facilities for all deposit accounts, safe deposit lockers, and articles kept in safe custody.
• Customers will have the option not to nominate anyone, but banks must explain the benefits and obtain a written declaration if a customer declines.
• Banks cannot refuse or delay account opening just because a customer chooses not to nominate.
• If a nominee dies before receiving funds, the claim will be settled as per RBI’s directions on claims of deceased customers.
• Banks must acknowledge nomination registration, cancellation, or changes within three working days and record the nomination details in passbooks, account statements, and term deposit receipts.
• The name of the nominee must be clearly printed on customer documents.
• Banks are also directed to launch awareness campaigns to educate customers about the advantages of having a nomination, including messages on cheque books, passbooks, and promotional materials.

RBI has clarified that the directions are issued under Section 35A of the Banking Regulation Act and are binding on all banks, including scheduled commercial banks, regional rural banks, State Bank of India, and cooperative banks.

These new directions replace previous circulars related to the nomination facility, ensuring consistency with the amended law.