Bank Nomination Rules: Now bank account holders will be able to add four nominees instead of one. This can help in reducing disputes regarding inheritance of money. This change has come after the Banking Laws Amendment Bill was passed in the Rajya Sabha.
The aim of this step is to provide more flexibility in the distribution of financial assets. Also, to reduce the number of unclaimed deposits in the banking system.
What changes were made in the nomination rules?
Earlier, account holders could add only one nominee, who was entitled to receive money from their bank account after their death. Now under the new rule, up to four nominees can be nominated. This will make it easier for the account holder to divide the money as per his wish.
For example, apart from his wife, an account holder can also make his parents and children as nominees. And he can decide how much money they will get.
Two types of nomination methods have been added in this amendment – Simultaneous and Successive. This will enable better distribution of money after the death of the account holder.
Details of both nomination processes
The first nomination process is Simultaneous Nomination. In this, the account holder can tell how his deposit amount will be divided among the nominees. For example, if someone has ₹ 10 lakh in his account and there are three nominees, then he can divide it in the ratio of 40:30:30.
This means that the first nominee will get ₹4 lakh. Whereas, the second and third nominees will get ₹3 lakh each.
The second is Successive Nomination. In this, there is a provision to give the account holder’s money according to the priority order. This means that if the first nominee is not available, the money will be given to the second nominee.
For example, if ‘Meena’ is the primary nominee but she is not available, the money will go to the second nominee ‘Suresh’. If ‘Suresh’ is also not available, the amount will be transferred to the third nominee ‘Mahesh’. The purpose of this process is to ensure that if something unfortunate happens to a nominee before receiving the money, the money automatically goes to the next nominee.
New rules for bank locker
In this amendment, nomination rules for bank lockers have also been updated. Both nomination methods (simultaneous and successful) are applicable in bank accounts. But only successful nomination will be allowed for bank lockers. This means that in the absence of the first nominee in a sequential manner, the next one will become eligible.
What impact will this change have on customers?
This change is expected to reduce unclaimed deposits. According to RBI data, it had increased from ₹62,225 crore in March 2023 to ₹78,213 crore in March 2024.
This will make it easier for families to access money deposited in bank accounts and avoid legal complications. Litigation is also expected to reduce as it will make the administrative process easier for banks by clarifying nominee rights and reducing disputes.
Related Articles:-
Delhi govt directs private schools to provide free uniforms, books to EWS and special students
IMD Rain Alert: There will be hailstorm along with heavy rain for the next 5 days
