Ministry of Finance notifies rules to modernize and digitize nomination process for bank customers

Ministry of Finance has notified the Banking Companies (Nomination) Rules, 2025 to modernize, simplify, and digitize the nomination process for bank customers in India. These Rules are in supersession of the Banking Companies (Nomination) Rules, 1985 and the Co-operative Banks (Nomination) Rules, 1985. The provisions will come into force on 1-11-2025.

For nomination in respect of deposits, a person (or group of people) who have a bank deposit can name up to 4 individuals as nominees. These nominees can be chosen to receive the deposit either successively or simultaneously. Nomination can be made either in the, Nomination Form, Electronic or digital mode ("e-nomination") in cases where the Banking Company has made such facility available.

E-nomination will be permitted if it enables the depositor/ all the depositors to nominate 1 or more individuals not exceeding 4, either successively or simultaneously. It will also be permitted if it obtains all necessary details prescribed in the Nomination Form or e-nomination and if it ensures that the nomination is authenticated, validating and confirming the credentials of the depositor. It should have a system of alerting the depositor for all nominations made.

Methods of authentication of nomination include electronic signature, Reliable electronic authentication technique which is specified in the Second Schedule to the Information Technology Act, 2000 and Internet or Mobile banking application.

Nominations can be made only for deposits held in the personal name, and not for those held as representatives. In case the nominee is a minor- the depositor can also name an adult to receive the deposit on the minor's behalf in case the depositor/ depositors passes away while the nominee is still a minor. Subsequent nominations will cancel the previous nominations. If a deposit is held by more than 1 person, then all of them have to agree to cancel or change the nominations.

Nomination in respect of articles in safe custody can be made in favor of 1 or more individuals but not exceeding 4. Nomination in respect of safety lockers: If 1 or more individuals rent a locker, whether inside the safe deposit value of banking company or elsewhere, they can nominate up to 4 people, but only in a specific order (successively).

Powered by Capital Market - Live News