New Nominee Rules for Bank Accounts - A Clearer and Fairer Approach for Depositors

The goal: simplify claim settlements, bring transparency to what often has been a complex or contested process, and standardise nomination formalities across banks.

What Exactly Is Changing?
Here are the key features of the new rules:

*1. Up to four nominees allowed

* Faster settlement of claims: When the account holder dies, banks will have clearer guidance as to who is nominated and what share each is to receive, reducing the need for legal wrangles or delays.

* Reduced disputes: With the option to specify shares and order of succession, the potential for disagreements among family members may reduce.

* More flexibility for depositors: The account holder can plan more thoughtfully e.g., splitting the amount between spouse, children, siblings; or naming a backup nominee if the primary passes away.

* Clarity in asset distribution: Especially for lockers and safe custody items, the rules bring more clarity around succession (which has often been messy).

Things to Keep in Mind

* Even though the nominee is authorised to receive the assets from the bank, they may not necessarily be the final beneficiary in terms of inheritance law. Nomination simplifies receipt of funds, but succession law still applies.

* You must update your nomination form or ask your bank about how to assign multiple nominees once the rules come into effect from 1 November 2025.

* Ensure you specify clear percentage shares if opting for simultaneous nomination; vague or missing instructions may lead to confusion.

* For successive nomination: ensure that the sequence reflects your wishes, and that nominated persons are aware of their status.

* For lockers or safe custody assets: remember only successive nomination is allowed under these changes.

* Keep in mind this is for future nominations and nominations may need to be updated; existing nomination arrangements may continue but you should review them in light of new flexibility.

* Check with your bank about when and how they will implement the changes (e.g., new forms, online nomination facilities).

What This Doesn’t Do

* These rules do not change how the bank deals with Indian succession or inheritance laws; nomination eases receipt of funds/assets but does not override legal heirs’ rights.

* They don’t automatically apply to all value types or every kind of bank product at once (banks will publish the detailed forms and rules via the Banking Companies (Nomination) Rules, 2025).

* The changes apply only from the notified date 1 November 2025 so prior nomination rules still apply for older accounts unless changed.

A small change with a big impact
This is a welcome reform: seemingly small in description, but potentially significant in outcome. Being able to nominate up to four persons and define clearly how your assets should be shared (and in what order) means fewer headaches for families and fewer delays in banks settling claims.

If you hold a bank account, fixed deposit, or locker, mark your calendar for 1 November 2025 and check with your bank about revising your nomination details so they align with what you truly intend.