Indian Banks Ask RBI for Rules on Multi-Nominee Account Disputes

BANKINGFINANCE
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AuthorKavya Nair|Published at:
Indian Banks Ask RBI for Rules on Multi-Nominee Account Disputes
Overview

Indian banks want the Reserve Bank of India (RBI) to set clear rules for handling account claims when there are multiple nominees. A new rule allows up to four nominees, but courts have ruled that legal heirs' rights under succession laws, like the Hindu Succession Act, take precedence. This creates confusion, delays asset distribution, and can lead to family legal battles.

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Navigating Complex Claims After New Nomination Rules

The Banking Laws (Amendment) Act, 2025, which took effect on November 1, 2025, introduced the possibility of naming up to four nominees for bank deposits and lockers. While intended to simplify asset handover, this change has created new operational challenges for lenders. Banks now face difficulties when nominees do not agree, fail to coordinate, or when other legal heirs step forward. Financial institutions are asking the RBI for a formal Standard Operating Procedure to manage these fragmented claims and prevent incorrect payouts.

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