RBI revises norms for claims settlement of deceased bank customers

The Reserve Bank on Friday issued revised norms for the settlement of claims on deceased customers' bank accounts and lockers within a 15-day timeframe and prescribed compensation to nominees for delays in the settlement.

The revised instructions are aimed at streamlining the divergent practices followed by banks in the settlement of claims in respect of deceased customers. It has also standardised the documentation to bring improvement in the quality of customer service.

The central banks said the 'Reserve Bank of India (Settlement of Claims in respect of Deceased Customers of Banks) Directions, 2025' revised instructions will be implemented as expeditiously as possible, but not later than March 31, 2026.

The directions are related to the settlement of claims in the deposit accounts of a deceased customer, safe deposit locker and articles in safe custody by the deceased customer.

A deposit account where a depositor had made a nomination or where the account was opened with a survivorship clause, the payment of the outstanding balance upon the death of the depositor(s) to the nominee(s)/ survivor(s) shall be considered a valid discharge of a bank's liability, the RBI said.

In cases where accounts are without a nominee/survivorship clause, banks have been asked to adopt a simplified procedure for settlement of claims in cases where the aggregate amount payable is less than the threshold limit.

Threshold limit means Rs 5 lakh in case of a co-operative bank and Rs 15 lakh in case of any other bank or such higher limit as may be fixed by the bank, including a co-operative bank.

In cases where the amount is above the threshold limit, the bank may ask for additional documents like a succession certificate or a legal heir certificate.

The RBI's latest directions also prescribe norms for the settlement of claims not falling under the simplified procedure.

It also details norms to be followed for the settlement of claims in a safe deposit locker and articles in safe custody by a deceased customer.

On the time limit for settlement of claims, the RBI said a bank shall settle a claim in respect of deposit accounts of a deceased customer within a period not exceeding 15 calendar days from the date of receipt of all the required documents associated with the claim.

"In case of safe deposit locker/ articles in safe custody, the bank shall, within 15 calendar days of receipt of all the required documents, process the claim and communicate with the claimant(s) for fixing the date for making inventory of the locker/articles in safe custody," the central bank said.

If any deposit-related claim is not settled within the timeframe stipulated, the RBI said, then the bank will communicate the reasons for such delay to the claimant(s).

"Further, in cases of delay attributable to the bank, compensation shall be paid by the bank in the form of interest, at a rate not less than the prevailing Bank Rate + 4 per cent per annum, on the settlement amount due for the period of delay," it said.

For claims related to safe deposit locker/ articles in safe custody, the bank will be required to pay compensation to the claimant(s) at the rate of Rs 5,000 for each day of delay, in cases where it doesn't adhere to the timeline.