Starting November 1, all banks will be required to offer a nomination facility to customers when they open a new account.
This rule comes under the Reserve Bank of India’s (RBI) latest directions on deposit accounts, safe deposit lockers, and articles kept in safe custody.
Customers can still choose not to add a nominee, but in that case, they must submit a written declaration or have their refusal recorded by the bank.
No Delay or Denial in Account Opening
The RBI has made it clear that banks cannot deny or delay opening an account just because the customer decides not to nominate anyone.
Banks must also acknowledge all nomination-related requests—whether it’s a registration, cancellation, or change—within three working days.
Additionally, the nominee’s name should appear on the passbook, account statement, or term deposit receipt (TDR).
The RBI stated:
“Under no circumstances shall a prospective customer be denied or delayed in opening an account solely on the ground of refusal to make a nomination.”
To increase awareness, banks must also educate customers about the benefits of having a nominee, especially for easier and faster claim settlements.
How Banks Will Implement the New Rules
Banks are required to set up systems that make it easy for customers to register, cancel, or change nominations.
Once a customer submits a completed form, the bank must provide an acknowledgment within three working days.
If a nomination request doesn’t meet legal requirements, the bank must inform the customer in writing within three working days, explaining why it was rejected.
In cases where multiple nominees are listed, and one of them passes away before the deposit is claimed, the nomination for that person becomes invalid, while the others remain effective.
Background: Faster Claim Settlements for Nominees
Earlier, the RBI had updated its rules on how banks should settle claims for deceased customers’ accounts and lockers.
Banks must now complete settlements within 15 days and even compensate nominees if there are delays.
Having a valid nominee or a survivorship clause helps the bank quickly release the deposit amount to the rightful person, avoiding long legal or procedural delays.
