RBI Streamlines Nomination Rules for Bank Deposits and Lockers

Heading: New RBI Directions on Bank Nominations

Body: The Reserve Bank of India has introduced fresh directions aimed at streamlining the nomination process for bank deposit accounts, safe deposit lockers, and articles kept in safe custody. These rules, set to take effect from November 1, 2025, are designed to simplify claims for the next of kin of deceased customers, thereby minimizing procedural difficulties. The new framework aligns with recent amendments to the Banking Regulation Act.

Banks will now be mandated to explicitly inform customers about the advantages of nominating beneficiaries when opening an account. They must also allow customers to record a nominee and explain how this simplifies fund transfers and claim settlements post-death. If a customer chooses not to nominate, banks must obtain a written declaration or record their refusal, ensuring that account opening is not delayed or denied on this basis.

Furthermore, banks are required to verify and acknowledge nomination registrations, cancellations, or variations within three working days and communicate any rejections in writing within the same period. The status of nominations will also need to be clearly indicated on account statements and passbooks. The RBI has also directed banks to conduct awareness campaigns about the importance of nominations, repealing older regulations in the process.

Impact: This news will have a positive impact on the banking sector by enhancing customer trust and operational efficiency in handling claims. It also benefits account holders and their families by ensuring smoother succession planning and asset transfer. Impact rating: 7/10.

Difficult Terms: * **Nomination**: The process of appointing a person who will receive the assets (like money in an account or contents of a locker) in the event of the account holder's death. * **Next of Kin**: The closest living relatives of a person. * **Streamline**: To make a process simpler and more efficient. * **Procedural Hardship**: Difficulties or complications faced while following a set of rules or steps. * **Mandated**: Required by law or authority. * **Beneficiaries**: People who are designated to receive money or property from someone. * **Succession Planning**: The process of anticipating and arranging for the disposal of an estate during a person's life.