The Reserve Bank of India (“RBI”), in exercise of the powers conferred by section 35A of the Banking Regulation Act,1949 (read with section 56 of the Act ibid when applied to cooperative banks), vide Circular No. RBI/2025-26/95,[1] dated October 28, 2025, has issued the Reserve Bank of India (Nomination Facility in Deposit Accounts, Safe Deposit Lockers and Articles kept in Safe Custody with the Banks) Directions, 2025 (“Directions”), with effect from November 01, 2025.
These Directions align the regulatory framework governing nomination facilities with the recent Banking Laws (Amendment) Act, 2025 and the Banking Companies (Nomination) Rules, 2025, which amend Sections 45ZA, 45ZC and 45ZE of the Banking Regulation Act, 1949. The new provisions are intended to facilitate speedy and hassle-free claim settlement for nominees after the death of a depositor, while ensuring uniformity and clarity across all banks.
Key Highlights of the Directions
- Nomination Facility: Banks shall be required to offer nomination facility in all deposit accounts, safe deposit lockers, and articles kept in safe custody. This shall apply equally to accounts operated by individual proprietors, where the account is deemed to belong to the individual personally. Nomination must conform to Sections 45ZA to 45ZG of the Banking Regulation Act, 1949 and the Banking Companies (Nomination) Rules, 2025.
- Option to Decline Nomination: Banks shall be required to inform the customers of the availability and benefits of the nomination facility at the time of account opening. The customers may choose not to nominate but must provide a written declaration to that effect. If the customer refuses to give written confirmation, the bank shall record the refusal. Importantly, account opening shall not be denied or delayed merely because a customer opts out of making a nomination.
- Settlement and Validity: If a nominee predeceases the depositor, the nomination for that nominee becomes void, and the claim will be handled under the RBI (Settlement of Claims in respect of Deceased Customers of Banks) Directions, 2025. The banks must have systems to record, register, cancel, and vary nominations. Acknowledgement for registration or modification of nomination shall be provided within 3 (three) working days of receipt of the relevant forms. Further, if a nomination is rejected, the bank must communicate reasons in writing within 3 (three) working days.
- Recording Nomination Details: Banks must clearly indicate ‘Nomination Registered’ on passbooks, statements, and term deposit receipts (TDRs). The name of the nominee must also be displayed in these documents.
- Customer Awareness and Publicity: Banks are directed to actively publicize the benefits of the nomination facility. Awareness may be promoted through messages in cheque books, passbooks, and other customer materials, as well as through periodic outreach campaigns. Account opening and locker hire forms must include a dedicated section for nomination details to ensure customer awareness.
- Repeal and Transitional Provisions: All earlier instructions on nomination facilities (as annexed to the Directions) shall stand repealed upon commencement of these Directions. However, any actions or nominations made under the previous shall continue to remain valid if in conformity with the earlier instructions.
[1] https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12919&Mode=0