New banking laws for nomination facilities for deposit accounts, lockers to kick in from Nov 1

New Delhi: The key provisions relating to nomination under the Banking Laws (Amendment) Act, 2025 will come into effect from November 1 this year, the Finance Ministry announced on Thursday.

The provisions that will kick in from next month relate to nomination facilities in respect of deposit accounts, articles kept in safe custody, and the contents of safety lockers maintained with banks.

The Act, which was notified on 15th April 2025, contains a total of 19 amendments across five legislations — the Reserve Bank of India Act, 1934, Banking Regulation Act, 1949, State Bank of India Act, 1955 and Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and 1980.

The notification said that the provisions of the Banking Laws (Amendment) Act, 2025 “shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint” and different dates may be appointed for different provisions of the Act.

Accordingly, the Central Government has notified that the provisions contained in Sections 10, 11, 12 and 13 of the Banking Laws (Amendment) Act, 2025 shall come into force with effect from 1st November 2025, the statement said.

Among the key features of these provisions, customers may nominate up to four persons, either simultaneously or successively, thereby simplifying claim settlement for depositors and their nominees; depositors may opt for either simultaneous or successive nominations, as per their preference and for nomination for Articles in Safe Custody and Safety Lockers, only successive nominations are permitted.

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 among all nominees.

Individuals maintaining deposits, articles in safe custody, or lockers may specify up to four nominees, where the next nominee becomes operative only upon the death of the nominee placed higher, ensuring continuity in settlement and clarity of succession.

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 Banking Companies (Nomination) Rules, 2025, detailing the procedure and prescribed forms for making, cancelling, or specifying multiple nominations, will be published in due course to operationalise these provisions uniformly across all banks, according to the official statement.

The Banking Laws (Amendment) Act, 2025 aims to strengthen governance standards in the banking sector, ensure uniformity in reporting by banks to the Reserve Bank of India, enhance depositor and investor protection, improve audit quality in public sector banks, and promote customer convenience through improved nomination facilities. The Act also provides for rationalisation of the tenure of directors, other than the Chairman and whole-time directors, in co-operative banks.

IANS