Soon there could be four nominees for deposit accounts and bank lockers. The government has announced November 1 as the set date for the introduction of key provisions related to the Banking Laws Amendment Act.
As of date, only one nominee is allowed for deposit accounts and bank lockers.
The provisions that come into force from 1 November up to and including Articles 10, 11, 12 and 13 relate to nomination facilities in respect of deposit accounts, deposited items and the contents of safe deposit boxes at banks.
“The implementation of these provisions will give depositors the flexibility to make nominations as per their preference, while ensuring uniformity, transparency and efficiency in the settlement of claims across the banking system,” the finance ministry said.
Accordingly, customers can nominate up to four individuals, simultaneously or consecutively, simplifying claims settlement for depositors and their nominees,” the Ministry of Finance said. Depositors can opt for simultaneous or consecutive nominations.
“Depositors may nominate up to four persons and specify the share or percentage of rights for each nominee, so that the total equals 100 percent and allows transparent distribution among all nominees,” the ministry said.
According to officials, the higher number of nominees for depositors’ money is aimed at reducing unclaimed deposits in banks. As of June 30, 2025, public sector banks are saddled with unclaimed deposits of ₹58,330.26 crore, while the private sector has ₹8,673.72 crore, according to the Reserve Bank of India. Balances in savings/current accounts that have not been used for 10 years, or time deposits that have not been claimed within 10 years of the maturity date, are classified as ‘unclaimed deposits’. This can happen for many reasons, including the death of the primary holder and the lack of a sign of the nominee.
These amounts are transferred by banks to the Depositor Education and Awareness (DEA) Fund managed by the Reserve Bank of India. However, the depositors still have the right to claim the deposits at a later date from the bank(s) where these deposits were held, along with interest, if applicable.
Meanwhile, another provision prescribed consecutive nominations only for items in safe custody and security vaults. “Individuals holding deposits, items in safe custody or safety deposit boxes can nominate up to four nominees, with the next nominee only taking effect upon the death of the higher-ranked nominee, ensuring continuity in settlement and clarity of succession,” the ministry added.
The Banking Companies (Nomination) Rules, 2025, which sets out the procedure and prescribed forms for making, canceling or specifying multiple nominations, will be published in due course to implement these provisions uniformly for all banks.
According to the ministry, 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 the quality of audits in public sector banks and promote customer convenience through improved nomination facilities. The law also provides for rationalization of tenure of directors, except the chairman, and full-time directors in cooperative banks.
The Act has made amendments to the Reserve Bank of India Act, 1934, the Banking Regulation Act, 1949, the State Bank of India Act, 1955, the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980. However, amendments to all these laws have nothing to do with reducing government shareholdings or the privatization of public sector banks.
Published on October 23, 2025
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