R ARIVANANTHAM
NEW DELHI, OCT 23
The Ministry of Finance has announced that the key provisions on Nomination under the Banking Laws (Amendment) Act, 2025 will come into effect from November 1, 2025, ushering in significant reforms in how depositors nominate beneficiaries for their accounts, safe custody articles, and bank lockers.
- Multiple nominations, clearer succession rules, and improved governance mark a major step toward depositor protection and convenience
- All stakeholders—banks, depositors, and legal heirs—urged to understand the new provisions under the Banking Laws (Amendment) Act, 2025
These changes are designed to enhance transparency, depositor protection, and claim settlement efficiency, while giving account holders greater flexibility and control over their nominations.
The provisions notified through Sections 10 to 13 of the Amendment Act will apply uniformly to all scheduled banks, including public, private, and co-operative institutions.
Key Provisions for Depositors
- Multiple Nominations:
Account holders can now nominate up to four persons for their deposits, lockers, or safe custody items—either simultaneously or successively.
- Simultaneous Nomination:
Depositors may assign specific percentages of entitlement (totaling 100%) to multiple nominees, ensuring equitable and transparent distribution.
- Successive Nomination:
Nominees can be designated in order of priority—if one nominee passes away, the next automatically becomes the rightful claimant, ensuring continuity and ease of settlement.
- Uniformity and Clarity:
These changes bring consistency across all banks, eliminating procedural ambiguities and enabling faster, hassle-free settlement of claims.
The Banking Companies (Nomination) Rules, 2025—which will soon be published—will outline the precise forms, procedures, and cancellation methods for nominations.
Impact on Stakeholders
For depositors, these provisions simplify legacy and estate planning. For banks, they promote procedural efficiency and reduce disputes in claim settlements. For legal heirs and nominees, they bring much-needed clarity on entitlements, minimizing litigation.
Officials said the broader objectives of the Banking Laws (Amendment) Act, 2025 include:
- Strengthening governance standards in the banking ecosystem.
- Enhancing depositor and investor protection.
- Promoting customer convenience through better systems and digital integration.
- Improving audit quality and transparency in public sector banks.
The Ministry has urged all banks to launch awareness campaigns to inform customers about the new nomination options and ensure all existing depositors update their nomination details accordingly.
The amendment also forms part of the Government’s ongoing efforts to modernize banking laws, streamline compliance, and ensure citizen-centric reforms in the financial sector.
