The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Nomination Facility in Deposit Accounts, Safe Deposit Lockers and Articles kept in Safe Custody with the Banks) Directions, 2025, marking a significant step toward improving ease of banking and simplifying claim settlement processes for depositors and their families.
These new Directions, which will come into effect from November 1, 2025, have been framed under the powers conferred by Section 35A of the Banking Regulation Act, 1949, aligning with the recently notified Banking Laws (Amendment) Act, 2025 and the Banking Companies (Nomination) Rules, 2025.
The overarching aim of the new framework is to streamline the nomination process, reduce hardship for families of deceased customers, and provide regulatory uniformity across all categories of banks — including commercial banks, regional rural banks, and cooperative banks.
Objective of the Nomination Facility
The nomination facility plays a vital role in ensuring the expeditious settlement of claims after the death of a depositor or locker holder. By nominating a beneficiary, customers authorize banks to release funds or contents smoothly to the nominee, thus avoiding lengthy legal formalities.
The revised Directions make it mandatory for banks to offer and explain the benefits of the nomination facility to all customers at the time of opening deposit accounts or availing locker and safe custody services. This ensures that customers make an informed choice, fully understanding that nomination simplifies the claim process and provides quick access to funds for family members.
Importantly, customers retain the right to decline nomination. If they choose not to make a nomination, banks must still open their accounts, provided all other formalities are completed. However, such refusal must be supported by a written declaration or a recorded statement from the customer.
Improving Transparency and Customer Service
Under the new Directions, banks are required to:
- Acknowledge receipt of all nomination, cancellation, or variation forms within three working days.
- Verify and record nominations as per the provisions of the Act and Rules.
- Communicate any rejection of nomination requests with clear reasons in writing within three working days.
- Display “Nomination Registered” status prominently on passbooks, account statements, and term deposit receipts (TDRs).
- Include the name of the nominee(s) in account records, further enhancing transparency and customer confidence.
Additionally, banks must implement systems for maintaining updated records of nominations and ensure that acknowledgments are provided promptly — even when not explicitly requested by the customer.
Customer Awareness and Publicity
Recognizing that many customers are unaware of the benefits of nomination, the RBI has directed banks to undertake public awareness initiatives. These may include:
- Printing informative messages about nomination on chequebooks, passbooks, and brochures;
- Conducting periodic campaigns to educate customers; and
- Incorporating nomination sections directly into account opening and locker rental forms.
This proactive approach aligns with the RBI’s broader commitment to customer empowerment and financial inclusion.
Repeal and Consolidation of Earlier Circulars
With the issuance of these Directions, the RBI has repealed 31 earlier circulars dating back to 1986, ensuring that all instructions related to nomination facilities are consolidated under one comprehensive regulatory document. This repeal simplifies the compliance landscape and promotes regulatory consistency across the banking system.
Conclusion
The RBI’s 2025 Nomination Directions underscore its ongoing efforts to modernize India’s banking framework while safeguarding consumer interests. By simplifying the nomination process, enhancing transparency, and mandating clear communication, the central bank ensures that every depositor’s family can access their rightful dues swiftly and with dignity.
Customers are encouraged to contact their respective banks or visit the RBI’s official website for detailed guidance on availing and updating nomination facilities.