The central government has made several significant changes to banking laws. One key change is the approval to increase the number of nominees in deposit accounts.
Now, account holders can add up to four nominees.
Additionally, the government has approved both sequential and simultaneous nominations.
However, no official information about this proposal has been released yet.
Purpose of the Changes
According to the Times of India, these changes aim to address the growing problem of unclaimed deposits.
The central government wants to make things easier for customers.
Currently, only one nominee is allowed in savings accounts and fixed deposits.
With the new proposal, multiple nominees can receive the deposit amount after the account holder’s death.
Impact on Public Provident Fund (PPF)
The report also mentions that the number of nominees in the government-run Public Provident Fund (PPF) might increase.
The details will become clear once Finance Minister Nirmala Sitharaman introduces the bill in Parliament.
Concerns About Unclaimed Deposits
Finance Minister Nirmala Sitharaman has expressed concern about unclaimed deposits several months ago. Banks, mutual funds, and other financial services companies were urged to transfer money to rightful claimants.
Despite banks’ efforts to settle claims, unclaimed deposits exceeded Rs 78,000 crore by the end of March 2024.
Proposal to Amend the Law
There is also a proposal to amend the law so that unclaimed dividends and bonds can be transferred to the Investor Education Protection Fund (IEPF).
Currently, only shares of banks are transferred to the IEPF.
