Banking Laws (Amendment) Act 2025: Banks Allow Up to Four Nominees From Nov 1; Check Details
Starting November 1, bank account holders will be able to nominate up to four individuals for their accounts, a move aimed at promoting transparency and simplifying claim settlements across the banking system.
The key provisions regarding nomination under the Banking Laws (Amendment) Act, 2025 will become operational from next month, the Finance Ministry announced on Thursday.
The amendment, notified on April 15, 2025, introduced 19 changes across five legislations, including 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.
Under the new rules, customers can nominate up to four individuals either simultaneously or successively, making claim settlement smoother for depositors and their nominees. For items kept in safe custody and safety lockers, only successive nominations are allowed.
"Depositors may nominate up to four persons and specify the share or percentage of entitlement for each nominee, ensuring that the total equals 100 per cent and enabling transparent distribution amongst all nominees," the statement said.
This provision allows individuals maintaining deposits, articles in safe custody, or lockers to specify up to four nominees. The next nominee becomes operative only upon the death of the nominee placed higher, ensuring clarity of succession and continuity in settlement.
"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," it added.
The government will soon release the Banking Companies (Nomination) Rules, 2025, which will provide detailed procedures and prescribed forms for making, cancelling, or specifying multiple nominations. This will ensure uniform implementation across all banks.
Earlier, the central government had set August 1, 2025, as the effective date for certain sections of the amendment, including Sections 3, 4, 5, 15, 16, 17, 18, 19, and 20, as per Gazette Notification S.O. 3494(E) dated 29th July 2025.
The amendment aims to strengthen governance in the banking sector, improve audit quality in public sector banks, standardise reporting to the Reserve Bank of India , enhance depositor and investor protection, and offer customers more convenience through flexible nomination facilities.
In addition, the July 29 notification allowed public sector banks (PSBs) to transfer unclaimed shares, interest, and bond redemption amounts to the Investor Education and Protection Fund (IEPF), aligning their practices with the Companies Act. PSBs are also now empowered to remunerate statutory auditors, improving the quality of audits.
The same notification increased the threshold for 'substantial interest' from Rs 5 lakh to Rs 2 crore, marking a significant shift in regulatory norms for investors and banking institutions.
With these changes, the banking system is set to become more transparent, depositor-friendly, and aligned with modern governance standards, ensuring smoother claim settlements and enhanced customer confidence.
The key provisions regarding nomination under the Banking Laws (Amendment) Act, 2025 will become operational from next month, the Finance Ministry announced on Thursday.
The amendment, notified on April 15, 2025, introduced 19 changes across five legislations, including 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.
Under the new rules, customers can nominate up to four individuals either simultaneously or successively, making claim settlement smoother for depositors and their nominees. For items kept in safe custody and safety lockers, only successive nominations are allowed.
"Depositors may nominate up to four persons and specify the share or percentage of entitlement for each nominee, ensuring that the total equals 100 per cent and enabling transparent distribution amongst all nominees," the statement said.
This provision allows individuals maintaining deposits, articles in safe custody, or lockers to specify up to four nominees. The next nominee becomes operative only upon the death of the nominee placed higher, ensuring clarity of succession and continuity in settlement.
"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," it added.
The government will soon release the Banking Companies (Nomination) Rules, 2025, which will provide detailed procedures and prescribed forms for making, cancelling, or specifying multiple nominations. This will ensure uniform implementation across all banks.
Earlier, the central government had set August 1, 2025, as the effective date for certain sections of the amendment, including Sections 3, 4, 5, 15, 16, 17, 18, 19, and 20, as per Gazette Notification S.O. 3494(E) dated 29th July 2025.
The amendment aims to strengthen governance in the banking sector, improve audit quality in public sector banks, standardise reporting to the Reserve Bank of India , enhance depositor and investor protection, and offer customers more convenience through flexible nomination facilities.
In addition, the July 29 notification allowed public sector banks (PSBs) to transfer unclaimed shares, interest, and bond redemption amounts to the Investor Education and Protection Fund (IEPF), aligning their practices with the Companies Act. PSBs are also now empowered to remunerate statutory auditors, improving the quality of audits.
The same notification increased the threshold for 'substantial interest' from Rs 5 lakh to Rs 2 crore, marking a significant shift in regulatory norms for investors and banking institutions.
With these changes, the banking system is set to become more transparent, depositor-friendly, and aligned with modern governance standards, ensuring smoother claim settlements and enhanced customer confidence.
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