New Banking Laws: A Leap Forward in Nomination Policies

The Banking Laws (Amendment) Bill, approved by the Lok Sabha on December 3, 2024, introduces a groundbreaking change by allowing account holders to designate up to four nominees for their savings accounts and lockers. This legislative shift aims to streamline the distribution of assets post the account holder's demise, addressing challenges faced during the COVID-19 pandemic.

The amendment facilitates quicker and more straightforward release of assets from accounts or lockers, eliminating the need for succession certificates or testamentary documents. Bank account nominees now have the authority to access deposits, articles, or locker contents following the accountholder's death. The new amendment permits multiple nominees for bank deposits, who can be designated either successively or simultaneously. For other banking services, nominees must be appointed in sequence.

The Bill states, "The Banking Regulation Act allows single or joint deposit holders to appoint a nominee for their deposit. Such a nominee can also be appointed for items left in custody of a bank or for a locker hired from a bank. The nominee can access the deposit, articles, or locker in case of death of the person who nominated him. The Bill allows the appointment of up to four nominees for these purposes."

The Reserve Bank of India defines nomination as, "Nomination is a facility that enables a deposit account holder(s) (individual or sole proprietor) or safe deposit locker holder(s) to nominate an individual, who can claim the proceeds of the deposit account(s) or contents of the safe deposit locker(s), post the demise of the original depositor(s) or locker holder(s)."