In a significant reform aimed at enhancing customer convenience and transparency in banking operations, the Union ministry of finance (MoF) on Thursday announced that key provisions of the Banking Laws (Amendment) Act, 2025 relating to nomination facilities for deposit accounts, safe custody articles and safety lockers will come into force from 1 November 2025.
The new provisions, notified under Sections 10, 11, 12, and 13 of the amendment Act, will allow bank customers to nominate up to four individuals for their deposit accounts or lockers, marking a major step toward simplifying claim settlements and providing greater flexibility to depositors and their families.
Under the revised nomination framework, depositors can make multiple nominations—up to four—either simultaneously or successively. In the case of simultaneous nominations, a depositor may specify the percentage share of each nominee, ensuring that the total equals 100%. This provision is designed to make distribution of deposits more transparent and eliminate potential disputes among claimants.
For articles in safe custody and safety lockers, the law provides only for successive nominations, meaning that the next nominee will become eligible to claim the contents only on the death of the previous nominee. The MoF says this system ensures 'continuity in settlement and clarity of succession' for items kept under bank custody.
The ministry’s statement explained that depositors will have the freedom to decide the order and proportion of nominations according to their personal preferences. “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,” the release stated.
According to an official release, the provisions will apply uniformly to all banks and aim to ensure 'uniformity, transparency, and efficiency in claim settlement across the banking system'. The announcement follows the government’s earlier notification of the Act on 15 April 2025 which introduced 19 amendments across five major banking 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.
To operationalise the new framework, the Banking Companies (Nomination) Rules, 2025 are being prepared. These rules will detail the procedure and standardised forms for making, cancelling, or modifying multiple nominations and will be uniformly applied across all banks once published.
The ministry also highlighted that the amendment aligns with the government’s broader goal of strengthening depositor and investor protection and improving governance standards in the banking sector. The Banking Laws (Amendment) Act, 2025 is part of a comprehensive legislative overhaul intended to modernise India’s banking laws, enhance accountability and promote customer convenience through digital and transparent processes.
In addition to the nomination provisions coming into force in November, several other parts of the Act have already been implemented. Earlier this year, on 1 August 2025, the Union government had brought into effect other sections of the Act—specifically Sections 3, 4, 5, 15, 16, 17, 18, 19, and 20—which dealt with reforms in governance, auditing and uniform reporting standards across banks.
The finance ministry’s release underscored that the latest provisions focus on depositor empowerment. They provide flexibility to customers in specifying nominees and percentages, while ensuring clear procedural guidelines for banks during settlement. This is expected to streamline the process of releasing funds and locker contents in the event of a depositor’s death and reduce administrative delays and disputes.
According to the release, the reform will also harmonise the approach across public sector banks, private banks, and cooperative banks, many of which previously followed varying rules for nomination, often leading to confusion for depositors’ families. The new provisions bring uniformity under a single legal framework.
The Act also aims to strengthen governance standards in public sector banks by rationalising the tenure of directors—other than the chairman and full-time directors—in cooperative banks and improving audit quality. It seeks to enhance transparency in reporting to Reserve Bank of India (RBI) and ensure stricter adherence to compliance norms.
According to the finance ministry, the move to introduce multiple nomination options was prompted by long-standing customer feedback and recommendations from banking regulators and consumer forums. With millions of Indians maintaining bank deposits and lockers, the ability to nominate multiple heirs or beneficiaries is expected to ease procedural hurdles for families during claim settlements.
The ministry further stated that with the enactment of the Banking Laws (Amendment) Act, 2025, India’s banking sector is taking another step toward a more transparent, customer-centric, and efficient system. The provisions, it said, will not only safeguard depositor interests but also align Indian banking practices with international norms on consumer protection and inheritance flexibility.
In essence, from 1st November, bank account-holders and locker customers across the country will be able to nominate up to four individuals, determine their respective shares and structure succession in a way that ensures smooth and fair settlement of claims. With this reform, the government expects to reduce litigation and enhance trust in the banking system through clarity, efficiency and flexibility in posthumous account and asset management.
In December 2024, the Lok Sabha passed the Banking Laws (Amendment) Bill, 2024 which allows bank account-holders to have up to four nominees or successive nominations in their accounts. Moneylife Foundation has been demanding successive nominations for bank accounts similar to those available for insurance policies and unclaimed deposits which was mentioned during the debate on the Bill.
Participating in the debate, NK Premachandran, a member of Parliament (MP) of the Revolutionary Socialist Party (RSP) from Kollam, objected to limiting the number of nominees to four.
"A recent report prepared by the Moneylife Foundation suggested simplifying the standard of procedures and rules so that the legal heirs can avail the benefits. So I will urge the minister to direct RBI to simplify the procedure while duly guarding against the fraudulent claim so that the bank official can also settle the claim and the interest of the claimants can be protected," Mr Premachandran says.
In March 2021, Subhash Chandra Agrawal, a well-known Right to Information (RTI) activist from Delhi told Moneylife about why RBI needed to take a proactive step and introduce successive nomination facilities for financial consumers. "The facility of successive nomination exists at the Life Insurance Corp of India (LIC) through form-number 5194, whereby succession automatically passes on to the next nominee in case of the death of the earlier nominee."
Insurance companies, on the other hand allow successive or alternative nominations for up to three nominees, Mr Agrawal says citing Section 39 (1) of the Insurance Act, 1938, which says, "The holder of a policy of life insurance on his own life may, when effecting the policy or at any time before the policy matures for payment, nominate the person or persons to whom the money secured by the policy shall be paid in the event of his death."
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