RBI directs banks to offer nomination facility; customers can opt out
Mumbai, Oct 28, 2025
New rules effective November 1 require banks to offer nomination at account opening; refusal allowed only with written declaration, says RBI
Banks must offer a nomination facility to customers at the time of account opening, according to the Reserve Bank of India’s (RBI) new directions regarding deposit accounts, safe deposit lockers, and articles kept in safe custody. While customers can choose to opt out, they must provide a written declaration to that effect, or the bank must record their refusal in its records. The directions will come into effect from November 1.
According to the central bank, lenders cannot deny or delay account opening solely because a customer chooses not to nominate anyone. Banks must acknowledge all nomination-related requests—whether for registration, cancellation, or variation—within three working days. They are also required to display the nominee’s name on the customer’s passbook, statement of account, or term deposit receipt (TDR).
“Under no circumstances shall a prospective customer be denied or delayed in opening an account solely on the ground of refusal to make a nomination, provided all other requirements for account opening are satisfactorily met,” the RBI stated.
In addition, banks must educate customers on the benefits of nomination, ensuring wider awareness and smoother claim settlements.
Operational process
To implement these directions, banks must establish systems to register, cancel, or vary nominations as requested by customers, and provide an acknowledgement within three working days of receiving duly completed forms.
If a nomination request is rejected for non-compliance with relevant laws or rules, the bank must inform the customer in writing within three working days, citing the reasons for rejection.
In cases involving simultaneous nominations, if a nominee dies before receiving the deposit, the nomination for that person alone will become ineffective.
Background
Earlier, the RBI had revised norms for settlement of claims on deceased customers’ accounts and lockers, directing banks to complete settlements within 15 days and to compensate nominees for delays.
A deposit account with a valid nomination or survivorship clause allows the bank to discharge liability by paying the outstanding balance to the nominee or survivor upon the depositor’s death, as per RBI norms.
[The Business Standard]
