The Reserve Bank of India (RBI) has announced new rules for nomination in bank accounts, lockers, and safe custody articles. The Banking Companies (Nomination) Rules, 2025 and the Banking Laws (Amendment) Act, 2025, will take effect on November 1, 2025. These changes aim to make the nomination process more transparent and ensure customers understand its importance.
Banks Must Inform Customers About Nomination
Under the new rules, banks must clearly inform every customer about the nomination facility when opening a deposit account. They need to explain how having a nominee helps in smooth fund transfer and avoids legal hassles after the account holder’s death. This is expected to reduce disputes and delays during claims.
Nomination Is Not Mandatory, but Declaration Is
The RBI clarified that nomination is not compulsory, but banks must give customers a clear choice to nominate or opt out.
If a customer decides not to register a nominee, the bank must collect a written declaration confirming the decision.
The central bank’s notification dated October 28, 2025, states, “If the prospective customer chooses not to avail the nomination facility despite being fully informed, the bank shall proceed to open the deposit account without imposing any restrictions, if otherwise found eligible, after obtaining a written declaration from the individual confirming that he/ she does not require the nomination facility at the time of account opening. If he/she refuses to provide the written declaration, the bank shall record the fact of refusal to submit written confirmation in the account opening records.”
RBI made it clear that no bank can deny or delay opening an account simply because a customer refuses to make a nomination, as long as other requirements are met.
What If the Nominee Passes Away?
The new rules also cover cases where one of the nominees dies before receiving the deposit. That specific nomination becomes invalid.
In such cases, banks must settle the claim according to the RBI’s Settlement of Claims Directions, 2025. These directions will guide banks when there is no valid nominee.
A bank cannot claim discharge if payments are made to individuals based on nominations made under other laws for different purposes.
Nominee Details to Appear on Passbooks and Statements
To enhance clarity, banks must now print “Nomination Registered” on passbooks, account statements, and term deposit receipts. The name of the nominee(s) should also appear on these documents.
Banks Must Update Systems for Nomination Handling
RBI has asked banks to set up systems to record, register, cancel, or modify nominations. Banks must give written acknowledgements for all such requests within three working days.
If a nomination request is invalid, the bank must notify the customer in writing within the same three-day period, clearly stating the reason for rejection.
New Rule Aims to Prevent Future Disputes
The RBI’s move ensures that every customer understands their rights regarding nomination. It also helps families avoid legal hurdles during claims. By enforcing clarity and documentation, the central bank aims to make banking safer and more customer-friendly.
