Customers allowed to opt for up to four nominees in bank accounts

New provisions come into effect from November 1

Beginning November 1, bank customers can name up to four nominees for their accounts or lockers as the key provisions relating to nomination under the Banking Laws (Amendment) Act, 2025 will come into effect, giving depositors greater flexibility and transparency in nominating beneficiaries, the finance ministry said in a statement on Thursday.

 

Customers can now nominate up to four persons, either simultaneously or successively, thereby simplifying claim settlement.

 

For deposit accounts, “depositors may opt for either simultaneous or successive nominations as per their preference,” said the statement.

 

In the case of articles kept in safe custody and safety lockers, only successive nominations are allowed. Under simultaneous nominations, depositors can specify the share or percentage of entitlement for each nominee, ensuring that the total allocation equals 100 per cent and enabling transparent distribution among all nominees.

 

Successive nominations allow the next nominee to become operative only upon the death of the nominee placed higher, ensuring continuity and clarity of succession.

 

According to the finance ministry, implementation of these provisions is expected to bring uniformity, transparency, and efficiency to claim settlement across the banking system.

 

The Banking Companies (Nomination) Rules, 2025, which will detail the procedure and prescribe forms for making, cancelling, or specifying multiple nominations, will be issued shortly to operationalise the provisions uniformly across all banks, it said.

 

The sections coming into force on November 1 include Sections 10, 11, 12, and 13 of the Amendment Act, while earlier provisions, Sections 3, 4, 5, 15, 16, 17, 18, 19, and 20 came into effect on August 1, 2025.

 

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

 

The Act aims to strengthen governance standards, enhance depositor and investor protection, improve audit quality in public sector banks, and promote customer convenience through improved nomination facilities. Additionally, it rationalises the tenure of directors, other than the Chairman and whole-time directors, in co-operative banks.