Bank Customers Can Now Add Up to Four Nominees Starting Nov 1: What the New Rule Means?

From November 1, 2025, bank account holders in India will be able to nominate up to four individuals for their accounts. This change, introduced under the Banking Laws (Amendment) Act, 2025, aims to enhance transparency, ensure faster claim settlements, and bring uniformity across the country’s banking system.

A Step Toward Greater Flexibility

The Ministry of Finance has announced that customers can choose up to four nominees in their deposit accounts, either simultaneously or successively. This move is designed to make claim settlement smoother, especially in cases where multiple beneficiaries are involved.

Multiple Nominees for Deposits and Lockers

Under the new provisions:

• Deposit Accounts: Account holders can make simultaneous or successive nominations, specifying the share each nominee will receive, ensuring the total equals 100%.
• Safe Custody and Lockers: For safety lockers and articles in custody, only successive nominations will be permitted — meaning the next nominee’s rights become active only after the previous nominee’s death.

These changes give customers more control and clarity in managing their nominations and inheritance preferences.

Operational Details and Rules

To ensure consistent implementation, the Finance Ministry will introduce the Banking Companies (Nomination) Rules, 2025. These rules will outline the process for making, cancelling, or modifying multiple nominations using standardised forms across all banks.

Why the Amendment Matters

The Banking Laws (Amendment) Act, 2025, which includes 19 amendments across five major legislations such as the RBI Act, 1934 and the Banking Regulation Act, 1949, seeks to modernize India’s banking governance.

 The goals include:

• Enhancing depositor and investor protection
• Ensuring uniform reporting to the RBI
• Improving audit standards in public sector banks
• Promoting customer convenience and transparency

Key Governance and Structural Reforms

Besides nomination changes, the Act introduces several governance reforms:

• Aligns cooperative bank director tenures with constitutional norms, extending them from 8 to 10 years.
• Raises the “substantial interest” threshold from ₹5 lakh to ₹2 crore — the first revision since 1968.
• Empowers public sector banks to transfer unclaimed investor funds to the Investor Education and Protection Fund (IEPF).
• Allows banks to decide remuneration for statutory auditors, enhancing audit quality and accountability.

Implementation Timeline

While the Amendment Act was officially notified in April 2025, several provisions — including those related to nominations — will take effect on November 1, 2025. This gives banks time to update systems, forms, and processes for smooth execution.

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Conclusion

The introduction of multiple nominations marks a significant step in making India’s banking system more customer centric and transparent.

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