Outlook Money
Bank account holders are now permitted to designate up to four nominees for their accounts. On December 3, 2024, the Lok Sabha approved the Banking Laws (Amendment) Bill, which facilitates this new provision.
Allowing four nominees for bank accounts provides customers with greater flexibility to select multiple individuals as their nominees and distribute account holdings among them.
This implies that all nominees are equally entitled to receive the account funds upon the account holder's death. The nominees will receive the amount based on the percentage allocated by the deceased account holder.
It means that even if there is more than one nominee, all are not eligible to receive the proceeds from the account at the same time. The nomination in this case will become effective for one nominee at a time in the order specified by the account holder. So, upon the death of the account holder, the first nomination will become effective and so on.
One significant advantage and aim of having multiple nominees is to decrease the unclaimed deposits in the Depositor Education and Awareness (DEA) Fund, which continues to increase annually.
Bank account holders can now nominate up to four individuals for their fixed deposits as well.