New Banking Law from November 1: After November 1, 2025 account-holders will be able to designate four different people as their nominees in the case of bank deposit accounts. Find below the new changes explained: what it is, why it was introduced, how it functions, and what account-holders need to be aware of.
According to the newly adopted measures:
One who deposits money in a bank can assign up to four people as nominees of his/her bank account.
A bank deposit account (e.g., saving, current, fixed deposits) has two alternatives:
Simultaneous nomination: Each nominee becomes independently entitled to the account upon the death of the account-holder or any other event, and the account-holder specifies each nominee’s share.
Successive nomination: The nominees are listed one after another; only the next nominee will be the operative one when the previous nominee(s) are no longer available.
For safe-custody articles (e.g., lockers, bank safe-custody items) only successive nomination is allowed (not simultaneous) according to the regulation.
These nomination rules (Sections 10, 11, 12 and 13) of the Amendment Act will be binding from November 1, 2025.
In short, from November 1 bank-account holders will have more options when it comes to nominating the persons who will be entitled to their accounts after their death or other specified events or in handling the accounts.
Here’s the practical run-down of the key features, how you can make use of the change, and what you should watch out for:
(a) Simultaneous nomination
A maximum of four persons may be nominated by you at the same time.
Each nominee may be allocated a percentage or share of the total entitlement and the sum of all the shares should be equal to 100%.
Example: Suppose you have a savings account of ₹10 lakh and you decide to nominate three persons and specify 50% for A, 30% for B, 20% for C. After your demise, the bank will distribute the money accordingly (subject to the rights of legal heirs, etc.).
(b) Successive nomination
You may nominate four persons maximum and that too in a priority or order of preference manner. At present, only the first nominated person is the one who can exercise the rights followed by the second nominee in case of the death or inability of the first one, and so on.
This feature is especially useful when you do not know whether the nominees will be available, or if you want a backup chain.
In the cases of lockers or safe custody, you can only make successive nomination (simultaneous nomination is not allowed).
Ensure that the nomination you made is the right one: probably at present you have only one nominee, and with the new regulations, you may wish to check and alter it.
Provide the necessary details: in the case of simultaneous nomination, indicate the exact shares (sum=100%). If successive, write down the order clearly.
Keep the records: once the bank issues the detailed directives (Banking Companies (Nomination) Rules, 2025) and the forms are available, you will have to complete the appropriate nomination/cancellation/form-modification forms.
Think about the correspondence of the will with the nomination or estate-planning documents: this is important because the nominee is a custodian, not necessarily the ultimate legal heir. (Nomination does not override succession law.)
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Firstly, nomination is not the same as inheritance: Being nominated does not necessarily make the nominated person the legal heir. The legal heirs will still have to follow the estate legalities of succession.
As far as lockers / safe custody are concerned, simultaneous nomination is not possible (only successive).
The extensive Act is quite a few things; this nomination modification is just one of those. The others (e.g., governance of banks, auditor remuneration, threshold for substantial interest) remain outside the immediate nomination discussion.
Q: Do I have to change my current nomination?
A: While you are not forced to change immediately, it is a good idea to review your nomination since you now have more options (up to four nominees). If you want to take advantage of the new flexibility, you should contact your bank and fill in the updated nomination form when available.
Q: Can I nominate four people and give them equal shares?
A: Yes, under simultaneous nomination you may nominate up to four persons and specify the share (e.g., 25 % each). The total must equal 100%.
Q: What happens if the first nominee dies in a successive nomination?
A: The next nominee in the priority list becomes operative and eligible to claim. This can continue up to the number of nominees specified (max four).
Q: Is the nominee also the heir?
A: No, not always. A nominee is a person who holds the property temporarily and gets the money from the bank; further allocation among the heirs can be according to the will or inheritance law.
Q: Does this apply to fixed-deposits, savings accounts, lockers etc?
A: Yes, for deposit accounts (savings, current, fixed) the rules apply with simultaneous or successive nomination. For safe-custody articles and lockers, only successive nomination is permitted.
Q: When do these rules kick in?
A: From 1 November 2025.
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