New bank account nomination rules 2025: Has RBI made it mandatory? Check what the latest rule says
In a move aimed at improving transparency and ease of fund transfers after a depositor’s death, the Reserve Bank of India (RBI) has notified the Banking Companies (Nomination) Rules, 2025 and Banking Laws (Amendment) Act, 2025. The new rules, effective November 1, 2025, make it mandatory for banks to clearly inform customers about the nomination facility while opening accounts, lockers, or safe custody services.
Banks to inform customers upfront on nomination
Under the new norms, all banks are now required to explicitly inform customers about the nomination facility while opening any deposit account, according to an ET report. They must clearly explain the purpose and advantages of making a nomination — including how it simplifies the claim process in the event of the depositor’s death and ensures smooth transfer of funds to the nominee without legal delays.
Nomination optional, but declaration must be recorded
According to the RBI’s directions issued under the Banking Laws (Amendment) Act, 2025, banks must provide customers with the option to nominate or opt out, without affecting their eligibility to open an account.If a customer chooses not to nominate anyone, banks are required to obtain a written declaration confirming this decision. In cases where the customer refuses to sign the declaration, banks must record the refusal in their internal account-opening documents.The RBI’s October 28 notification said “If the prospective customer chooses not to avail the nomination facility despite being fully informed, the bank shall proceed to open the deposit account without imposing any restrictions, if otherwise found eligible, after obtaining a written declaration from the individual confirming that he/ she does not require the nomination facility at the time of account opening. If he/she refuses to provide the written declaration, the bank shall record the fact of refusal to submit written confirmation in the account opening records.”However, the regulator made it clear that no customer can be denied or delayed in opening an account solely because they declined to make a nomination, provided all other requirements are met.
Provisions for multiple nominees and claim settlement
The updated rules also clarify how claims will be handled when multiple nominees are involved. If one of the nominees dies before receiving the deposit, that nomination becomes invalid. In such cases, banks must follow the RBI’s Settlement of Claims Directions, 2025, which govern situations where no valid nomination exists.Banks cannot claim a valid discharge under the law if they make payments to individuals based on nominations made under any other law for specific purposes.
Nominee details to appear on account documents
To enhance transparency, banks are instructed to record the nomination status directly on passbooks, account statements, and term deposit receipts. The legend “Nomination Registered” must appear clearly, along with the name of the nominee(s).
Banks to set up systems for nomination management
The RBI has also directed banks to establish proper systems to record, register, cancel, or modify nominations. Acknowledgements for all nomination-related requests — including registration, cancellation, or variation — must be issued within three working days of receipt.If a nomination request fails to meet prescribed legal standards, banks must notify the customer in writing within the same three-day period, clearly stating the reasons for rejection.
