Bank customers can opt for up to four nominees in their accounts from Nov 1

Beginning next month, a bank customer can opt for up to four nominees in her or his account with a view to ensure uniformity, and efficiency in claim settlement across the banking system.

The key provisions relating to Nomination under the Banking Laws (Amendment) Act, 2025 will come into effect from November 1, 2025, a finance ministry statement said on Thursday.

The Banking Laws (Amendment) Act, 2025 was notified on April 15, 2025. It contains a total of 19 amendments across five legislations the Reserve Bank of India Act, 1934, Banking Regulation Act, 1949, State Bank of India Act, 1955 and Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and 1980.

As per the amendments, it said, customers may nominate up to four persons, either simultaneously or successively, thereby simplifying claim settlement for depositors and their nominees.

Depositors may opt for either simultaneous or successive nominations, as per their preference, it said.

With regard to nomination for articles in safe custody and safety lockers, it said, only successive nominations are permitted.

"Depositors may nominate up to four persons and specify the share or percentage of entitlement for each nominee, ensuring that the total equals 100 per cent and enabling transparent distribution amongst all nominees," it said.

Individuals maintaining deposits, articles in safe custody, or lockers may specify up to four nominees, where the next nominee becomes operative only upon the death of the nominee placed higher, ensuring continuity in settlement and clarity of succession, it said.

"The implementation of these provisions will give depositors the flexibility to make nominations as per their preference, while ensuring uniformity, transparency, and efficiency in claim settlement across the banking system," it said.

The Banking Companies (Nomination) Rules, 2025, detailing the procedure and prescribed forms for making, cancelling, or specifying multiple nominations, will be published in due course to operationalise these provisions uniformly across all banks.

"The central government had earlier appointed August 1, 2025 as the date on which certain provisions of the said Amendment Act, namely Sections 3, 4, 5, 15, 16, 17, 18, 19 and 20, came into force vide Gazette Notification S.O. 3494(E) dated 29th July 2025," it said.

The Banking Laws (Amendment) Act, 2025 aims to strengthen governance standards in the banking sector, ensure uniformity in reporting by banks to the Reserve Bank of India, enhance depositor and investor protection, improve audit quality in public sector banks, and promote customer convenience through improved nomination facilities.

The Act also provides for rationalisation of the tenure of directors, other than the Chairman and whole-time directors, in co-operative banks, it added.

Earlier on July 29, the government notified amendments to the Banking Laws (Amendment) Act, 2025 which allows public sector banks (PSBs) to transfer unclaimed shares, interest, and bond redemption amounts to the Investor Education and Protection Fund (IEPF), bringing them in line with practices followed by companies under the Companies Act.

The amendments also empower PSBs to offer remuneration to statutory auditors, facilitating the engagement of high-quality audit professionals and enhancing audit standards, the Finance Ministry had said.

Besides, the gazette notification dated July 29, 2025 has also enhanced the threshold of 'substantial interest' from Rs 5 lakh to Rs 2 crore.

The threshold of 'substantial interest' has been amended after 1968.

Additionally, it had said, the notification aligns director tenures in cooperative banks with the 97th Constitutional Amendment by increasing the maximum tenure from 8 years to 10 years, excluding the chairperson and whole-time director.