New banking nomination rules for deposit accounts and lockers from November 1— Details inside

New Delhi: The Finance Ministry announced on Thursday that important provisions regarding nomination under the Banking Laws (Amendment) Act, 2025 will be implemented starting November 1 this year. These provisions pertain to nomination facilities related to deposit accounts, articles held in safe custody and the contents of bank safety lockers.

The Banking Laws (Amendment) Act, 2025, notified on April 15, 2025, introduces 19 amendments across five key legislations: the Reserve Bank of India Act, 1934; the Banking Regulation Act, 1949; the State Bank of India Act, 1955 and the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980.

The Act stipulates that different sections may come into force on different dates, as notified by the Central Government in the Official Gazette. Accordingly, Sections 10, 11, 12 and 13 of the Act will become effective from November 1, 2025.

What changes will Nomination Rules bring?

Under the new rules, depositors will be able to nominate up to four persons, either simultaneously or successively, simplifying the claim settlement process for depositors and their nominees. Customers can choose between simultaneous nomination—where all nominees share the entitlement—or successive nomination, where nominees become operative one after another upon the death of the prior nominee. However, for articles kept in safe custody and safety lockers, only successive nominations are allowed.

In addition, depositors can specify the share or percentage of entitlement for each nominee, provided the total adds up to 100%, ensuring transparent and equitable distribution among nominees.

How does this benefit depositors?

These provisions offer depositors enhanced flexibility in making nominations according to their preferences while ensuring clarity and uniformity in settlement procedures across the banking sector. The changes are designed to promote transparency and streamline claim settlements.

What about operational procedures?

To implement these provisions uniformly, the Banking Companies (Nomination) Rules, 2025—which will detail the processes and forms for making, cancelling or modifying nominations—will be published in due course.

What is the broader aim of Banking Laws (Amendment) Act, 2025?  

  Beyond nomination facilities, the Act aims to strengthen governance within the banking industry, enhance depositor and investor protection, improve the quality of audits in public sector banks, and standardise reporting to the Reserve Bank of India. It also promotes customer convenience and rationalises the tenure of directors in cooperative banks (other than the chairman and whole-time directors).

IANS