In a major step towards improving customer service and easing the process for families of deceased customers, the Reserve Bank of India (RBI) has released its draft directions titled “Settlement of Claims in respect of Deceased Customers of Banks, 2025.” This draft circular aims to standardize procedures, reduce documentation burden, and ensure timely settlement of claims related to deposit accounts, lockers, and items in safe custody.
Why the New Directions Matter
The death of a loved one is already a difficult time for families, and dealing with complex bank procedures can make it worse. Until now, different banks followed different rules for processing claims, often leading to confusion and unnecessary delays. The new directions seek to eliminate this inconsistency and ensure that families get timely access to the funds and assets of the deceased.
Key Highlights of the Draft Circular
Faster Settlement for Accounts with Nominee or Survivorship Clause
- If a nominee is registered or the account has a survivorship clause (like “either or survivor”), the bank can release the funds without needing legal documents like a succession certificate or probate of Will.
- Nominees must submit a claim form, death certificate, and identity/address proof.
- Importantly, banks will treat nominees as trustees for legal heirs, not as sole beneficiaries.
Simplified Process for Accounts Without Nomination
For claims up to ₹15 lakh, banks can process them with minimal documentation such as a claim form, death certificate, legal heir declaration, and indemnity bond—no third-party surety needed. For higher amounts, additional legal documentation like a succession certificate or affidavit may be required, but no third-party indemnity bond will be insisted upon.
Locker and Safe Custody Claim Settlements
- Similar procedures apply to lockers and items in safe custody.
- Banks must conduct an inventory of locker contents in the presence of legal heirs, nominees, two independent witnesses, and bank officials.
- Nominees or legal heirs receive the contents without needing court orders, unless there’s a dispute.
Timelines and Accountability
- Banks must settle deposit-related claims within 15 days of receiving all required documents.
- For lockers or articles in custody, the inventory must be scheduled within 15 days.
- Delay in settlement attracts compensation—interest at Bank Rate + 4% per annum for deposits, and ₹5,000 per day for lockers and articles.
Provisions for Missing Persons
- If a customer is missing, claims can be settled based on court orders under the Bharatiya Sakshya Adhiniyam, 2023.
- For lower amounts, FIR, police non-traceable report, and indemnity may suffice.
Digital Accessibility and Transparency
- Claim forms and required document lists will be available on bank websites.
- Banks may also allow online claim submission and tracking for added convenience.