RBI Issues Notification On Nomination For FDs, Savings Accounts, And Lockers

In a new directive aimed at easing the process for surviving family members, the Reserve Bank of India (RBI) has ordered all banks and Non-Banking Financial Companies (NBFCs) to ensure that every existing and new account holder of savings accounts, fixed deposits, and safety deposit lockers includes a nominee. The objective is to reduce the procedural burden on families or legal heirs after the account holder’s passing, allowing for a faster and smoother transfer of assets.

As per the circular issued by the RBI on January 17, 2025 stated, “Instructions on the nomination facility for Scheduled Commercial Banks (SCBs) (excluding RRBs), Primary (Urban) Co-operative Banks (UCBs), and Deposit-taking NBFCs have been incorporated in the Master Circular on ‘Customer Service in Banks,’ the Master Circular on ‘Customer Service – UCBs,’ and the Master Direction on ‘Non-Banking Financial Companies – Acceptance of Public Deposits (Reserve Bank) Directions, 2016,’ respectively. The extant instructions also mandate banks to give wide publicity and provide guidance to deposit account holders on the benefits of the nomination facility.”

Under this new regulation, having a nominee on record will facilitate a quicker transfer of funds from savings accounts, fixed deposits, or safe deposit lockers without unnecessary delays, all while ensuring that the legal process is smoother for those inheriting the account holder’s assets. This will safeguard families from facing legal or bureaucratic obstacles in the wake of a tragedy.

Importance of Adding a Nominee to Your Accounts

A nominee is a person who the account holder has chosen to inherit their assets if they pass away. Adding a nominee to a savings account or fixed deposit at the time of account opening or updating it at any point afterwards ensures a straightforward transfer of assets to the nominated individual. Without a clear nominee in place, surviving relatives can experience lengthy delays and complications when trying to access the account holder’s funds.

Nomination Requirements for Banks and NBFCs

The RBI recently mandated that banks and other financial institutions ensure the nomination procedure is widely implemented. Starting on March 31, 2025, they will provide progress reports on the DAKSH portal every three months about the status of nominations. Also, the Customer Service Committee (CSC) or the Board of Directors will regularly review the progress of nomination coverage to ensure comprehensive adoption. The RBI’s directive also stresses the importance of training bank staff to properly handle requests for nominations and claims following the account holder’s death.

Additionally, banks will be required to revise their Account Opening Forms to include an option for customers to designate a nominee or to voluntarily choose to waive this option.

In addition to directly informing account holders about this feature, the RBI advises banks to instruct clients about the value of adding nominees to their accounts through media campaigns and recurring initiatives.