Govt Introduces Banking Law (Amendment) Bill To Allow 4 Nominees In Savings Bank Accounts, Lockers

The government proposes to allow up to four nominees in savings bank accounts and lockers, the minister of state for finance, Pankaj Chaudhary, said in the Lok Sabha on Friday while presenting the Banking Law (Amendment) Bill 2024. The amendment aims to provide accountholders with the “simultaneous and successive” nomination facility for convenience. Simultaneous nomination allows the nominees to be eligible for receiving a specified percentage of funds or contents in a savings bank account or locker, as designated by the account holder. On the other hand, successive nomination allows more than one nominee, but they can access the funds in a specific order one at a time. For instance, upon an accountholder's death, the first nominee will be eligible, and if the first nominee also dies, the second one will be eligible. Nomination eases the settlement process upon the accountholder’s death. Until now, account holders can nominate only one person for their savings accounts and fixed deposits. The amendment will allow to appoint more than one person. Also Read: Why Is Nominee Important In Any Investment? Know the number of nominations allowed in different financial assets:

Savings Bank Account:

An account holder can nominate only one person for a savings account, whether a single or joint account. Non-resident Indians (NRI) can also become nominees.

Fixed Deposits Account:

Only one nominee is allowed in fixed deposit accounts. If the nominee is a minor, the guardian will receive the amount on behalf of the minor until the minor attains majority.

Bank Locker:

For bank locker or safe custody, the nomination is allowed in favour of more than one person but is limited to up to two persons. It is permitted only for jointly held lockers.

Mutual Fund:

Mutual funds offer the nomination facility under regulation 29A of the Securities and Exchange Board of India (Sebi) Mutual Fund Regulation, 1996. Investors can nominate up to three persons in the mutual funds and indicate the allocation percentage for each nominee.

Demat Account:

A maximum of three nominees can be in a Demat account. One can delete, update, or change the nominee whenever required by submitting the prescribed form to the depository participants.

Public Provident Fund (PPF):

A PPF account also allows multiple nominees but does not explicitly mention the maximum number.

Employees Provident Fund (EPF):

The Employees’ Provident Fund Organisation (EPFO) allows EPF members to nominate one or more family members in the scheme. Those without family can appoint any other person. Also Read: What Is Capital Gain Account Scheme And When Will You Need It? All You Need To Know

Capital Gain Savings Account (CGAS):

One can nominate up to three nominees in a capital gains savings account. The account is used to park the unutilised long-term capital gain until the funds are reinvested as specified under Sections 54 and 54F of the Income-tax Act, 1961.

Post Office Schemes:

Post office deposits permit more than one nominee. However, the maximum number of nominees is not defined. Note that nomination is not permanent. It can be changed multiple times without restrictions.