Summary of this article
Updated provisions under the Banking Laws Act, 2025, are soon coming into effect.
Aim is to simplify and streamline the transfer process.
For customers, changes bring an opportunity to review and update the nominations.
New provisions under the Banking Laws Act, 2025, are soon coming into effect, making a major change in how customers can create and manage nominations. This will take effect from November 01, 2025. The centre has announced that Sections 10,11, 12, and 13 of the Act will be enforced from the date. These provisions apply to deposit accounts, locker provisions and even custody items. The sole aim is to simplify and streamline the transfer process after the original customer's demise.
These new rules have been implemented to give depositors flexibility and clarity in choosing nominees. From the revised framework, customers can now nominate up to four individuals, whether at the moment or later. For deposit accounts, there are two sorts of nominations available, simultaneous and successive. In the simultaneous nomination, your nominations can get equal or designated shares of your total assets at the same time. As for succession, if the primary nominee is deceased, the second nominee will get the assets entirely, not just a share.
Only successive nominations will be allowed for the items held in lockers. This ensures a clear chain of succession and reduces disputes and the arising of claims against the items among the heirs or claimants. The move aims to bring uniformity, transparency, and efficiency to the settlement process. This matter has always brought up tussles among the family of the deceased bank customers, and this is just a simple solution to it. This also avoids the legal challenges they might create in order to possess the said items.
The government has clarified that the Banking Companies Rules 2025 are expected to be released soon, which hold all the detailed procedures and forms required for making or updating nominations. For customers, these changes bring an opportunity to review and update the nominations, based on their family situations, financial situations, etc. The ability to assign multiple nominees ensures that savings and the person's assets are distributed evenly, fairly and according to their wishes, also minimising future legal or administrative complications.
It is to be noted that the Banking Laws Act, 2025, includes 19 amendments across main financial legislations such as the RBI Act, Banking Regulation Act, and the State Bank of India Act. The earlier provisions took effect in August, and it is expected that this November rollout represents a customer-centric approach to making banking more transparent, equitable, and responsive to customers' needs and wants.
