Starting November 1, bank customers will be able to nominate up to four individuals for their accounts, according to a new rule announced by the Ministry of Finance on Thursday.
The decision aims to make the claim settlement process smoother, more transparent, and uniform across all banks in the country.
The change will come into effect under the Banking Laws (Amendment) Act, 2025, which was notified on April 15, 2025. The Act includes 19 amendments across five key legislations — the Reserve Bank of India Act, 1934; Banking Regulation Act, 1949; State Bank of India Act, 1955; and the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980.
WHAT THE NEW RULE ALLOWS
Under the new amendments, customers can now name up to four nominees for their bank accounts, either simultaneously or successively. This provision is expected to simplify and speed up claim settlements for depositors and their families.
For deposit accounts, depositors can choose between simultaneous or successive nominations. In simultaneous nominations, a depositor can name multiple nominees and specify the percentage of the total entitlement for each. The total share must add up to 100%. In successive nominations, the next nominee’s right becomes active only after the death of the nominee placed higher.
For articles kept in safe custody or lockers, only successive nominations will be allowed. This means that in the case of the first nominee’s death, the rights will automatically pass to the next nominee in the sequence.
“The implementation of these provisions will give depositors the flexibility to make nominations as per their preference, while ensuring uniformity, transparency, and efficiency in claim settlement across the banking system,” the finance ministry said in a statement.
NEW NOMINATION RULES TO BE ISSUED
To operationalise these provisions, the government will soon issue the Banking Companies (Nomination) Rules, 2025. These rules will outline the detailed procedure and forms required to make, cancel, or modify multiple nominations.
The new system is expected to ensure that claim settlements are handled more efficiently and with fewer disputes, especially in cases involving multiple nominees.
WHY THE BANKING LAWS (AMENDMENT) ACT, 2025 WAS INTRODUCED
The government said the Banking Laws (Amendment) Act, 2025 aims to strengthen governance standards in the banking sector and improve customer convenience. It also seeks to bring uniformity in reporting by banks to the Reserve Bank of India (RBI), enhance depositor and investor protection, and improve audit quality, especially in public sector banks.
On July 29, the ministry had notified amendments under this Act, which included allowing public sector banks to transfer unclaimed shares, interest, and bond redemption amounts to the Investor Education and Protection Fund (IEPF), in line with the rules followed under the Companies Act.
The Act also empowers banks to decide on the remuneration of statutory auditors, enabling the appointment of high-quality professionals to improve audit standards.
OTHER KEY CHANGES UNDER THE ACT
The July 29 gazette notification also raised the threshold for what is considered a ‘substantial interest’ in a bank from Rs 5 lakh to Rs 2 crore — a change made for the first time since 1968.
Further, to align with the 97th Constitutional Amendment, the government increased the maximum tenure for directors in cooperative banks from 8 years to 10 years, excluding the chairperson and whole-time directors.
The move to allow multiple nominations is seen as part of the government’s wider effort to modernise the banking framework, improve customer rights, and make the financial system more accessible and efficient for all account holders..