Daijiworld Media Network – New Delhi
New Delhi, Oct 24: Beginning November 1, 2025, bank customers across India will be able to nominate up to four individuals for their deposits, lockers, and articles kept in safe custody, as part of new rules aimed at ensuring uniformity, transparency, and efficiency in claim settlements across the banking system.
According to a Finance Ministry statement issued on Thursday, the key provisions under the Banking Laws (Amendment) Act, 2025 — notified on April 15, 2025 — will come into effect next month. The Act introduces 19 amendments across five major 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 revised framework, depositors may nominate up to four persons, either simultaneously or successively, and may assign specific shares or percentages of entitlement to each nominee, ensuring the total adds up to 100 per cent. This allows for clear, equitable distribution among nominees and minimizes disputes during claim settlements.
For safe custody articles and safety lockers, only successive nominations will be permitted — meaning the next nominee becomes operative only upon the death of the preceding one, ensuring continuity and clarity in succession.
The Finance Ministry said the move 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.”
To facilitate implementation, the Banking Companies (Nomination) Rules, 2025 — outlining procedures and prescribed forms for making, cancelling, or specifying multiple nominations — will be issued shortly to operationalise these provisions uniformly across all banks.
Earlier, the central government had notified August 1, 2025 as the commencement date for certain provisions of the same Amendment Act, including those related to governance, audit standards, and investor protection.
The Banking Laws (Amendment) Act, 2025 also seeks to:
• Strengthen governance standards and reporting uniformity among banks.
• Enhance depositor and investor protection.
• Improve audit quality in public sector banks.
• Rationalize the tenure of directors (excluding chairpersons and whole-time directors) in cooperative banks — increasing the maximum tenure from 8 to 10 years in line with the 97th Constitutional Amendment.
• Empower PSBs to transfer unclaimed shares, interest, and redemption amounts to the Investor Education and Protection Fund (IEPF), aligning with corporate sector norms.
Additionally, the Act has revised the definition of ‘substantial interest’, increasing the threshold from Rs 5 lakh to Rs 2 crore, marking the first such change since 1968.
With these reforms, the government aims to modernize banking laws, simplify customer procedures, and strengthen regulatory oversight while enhancing convenience and protection for depositors across India.