What the Change Means

Reference to Business Standard. Indians to whom bank accounts may be opened will be allowed to choose up to four nominees to their deposit accounts beginning November 1, 2025. This is updated in line with the Banking Laws (Amendment) Act, 2025 and is applicable across the banks.

This is compared to the past where many customers were only able to name a single nominee (or the rule was inconsistently applied), the new rule permits multiple nominees either at once or in succession.

The Reason This is Important to Depositors.

This modification has a number of advantages to the customers of banks:

• Flexible: You have the option of names of up to four persons to whom you can bequeath your bank-account funds in case of your death, instead of a single person as it is usually the case.
• Better asset allocation: You can specify the amount that each nominee receives (such as dividing the shares between two or more individuals) to make up 100 percent to avoid confusion.
• Less legal or administrative latitude: By having clearly defined nominees, banks can have the ability to settle claims faster and more definitively.
• Unified approach: When one rule applies to all the deposit accounts, safe-custody articles and locker holdings, the banking system will be more uniform and easier to the customers.

Key Details to Note

The following are the details which you should remember:

• In the case of regular deposit accounts you can make the nomination either simultaneous (nominating all four nominees at the same time and splitting the shares up) or successive (the nomination becoming active at the time of the next nominee).
• In the case of the items of safe custody or bank lockers, the rule permits only the successive but not simultaneous nomination.
• The procedure will also be established with the help of the next rules: the Banking Companies (Nomination) Rules, 2025 that will specify how the nominations will be made, canceled or revised in different banks.
• The Amendment Act was even notified on April 15, 2025, and it contains a total of 19 amendments to various laws governing banking. Part of the provisions became effective earlier on August 1 with the nomination-related provisions (Sections 10-13) becoming effective on November 1.

The Customer Guide to What to Do.

• Check now your bank accounts and make your choices on whether to add or change or remove nominees. Because the new rule presents you with more choices, it is a good time to revise your choices.
• In case you already have a record of nominees with a bank, inquire of the bank whether it would accommodate up to four nominees on their form and whether you will be required to provide new documentation after November 1.
• By holding safe-custody items or having locker accounts, make sure that you know about the so-called successive nomination option and can determine whether it can serve your family or estate-planning requirements.
• Select the amount (percentage) of nomination you wish each nominee to have, this assists in eliminating confusion in future, especially in cases where you wish to have simultaneous nomination.
• Make a copy of your nomination form and ensure that the bank has changed the records in accordance with the new rules.

Context and Broader Impact

The government will facilitate transparency and efficiency in the settlement of claims by ensuring that up to four nominees are allowed and that the rules of nomination among banks have been standardised. It is aimed at cutting down on the delays, legal struggles and misunderstandings in the event of the depositors death.

These changes in a broader context are an indication of a shift to greater depositor protection, improved governance within banking institutions and the streamlining of customer rights. Other banking-governance reforms associated with nomination are also contained in the Amendment Act.

Final Thoughts

The new nomination rules which will take effect in November 1 are a significant move towards the proper management of bank accounts and deposits assets in case of a deposit holder demise. Act now, in case you are an Indian banker. Check your accounts, determine the number of nominees you desire (no more than four), share out the shares effectively and change the records of your bank. This way, you will guarantee that your money flows in the direction that you want it to move in, without any disturbances and wastage of time.

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