Ministry of Finance Unveils New Nomination Provisions under Banking Laws (Amendment) Act, Effective from November 1

New Delhi: The Ministry of Finance has announced key provisions relating to nomination under the Banking Laws (Amendment) Act, 2025, that will come into force from November 1, 2025.

The move is aimed at strengthening customer convenience, transparency, and efficiency in the settlement of claims across India’s banking system.

Provisions Coming into Effect

The provisions that will be implemented next month are related to nomination facilities for deposit accounts, articles kept in safe custody, and the contents of safety lockers maintained with banks.

The Central Government has notified that the provisions contained in Sections 10, 11, 12, and 13 of the Act will come into effect from November 1, 2025.

These provisions are part of the Banking Laws (Amendment) Act, 2025, which was notified on April 15, 2025. The Act includes 19 amendments spanning five major legislations:

The Reserve Bank of India Act, 1934
The Banking Regulation Act, 1949
The State Bank of India Act, 1955
The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970
The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980

Simplified Nomination Process

Under the new provisions, depositors will be able to nominate up to four persons, either simultaneously or successively. This will simplify claim settlements for both depositors and nominees.

For deposit accounts, customers can choose between simultaneous or successive nominations as per their preference. However, for articles kept in safe custody and safety lockers, only successive nominations are allowed. This ensures continuity and clarity in succession, as the next nominee becomes operative only upon the death of the nominee placed higher in order.

Depositors can also specify the share or percentage of entitlement for each nominee, ensuring that the total adds up to 100 per cent. This will promote transparent and equitable distribution among all nominees.

Enhancing Governance and Customer Protection

The implementation of these provisions is expected to provide depositors greater flexibility while ensuring uniformity and transparency in the claim settlement process.

The government will soon publish the Banking Companies (Nomination) Rules, 2025, which will outline the procedure and prescribed forms for making, canceling, or modifying multiple nominations. These rules will help operationalize the provisions uniformly across all banks.

The Banking Laws (Amendment) Act, 2025, aims to strengthen governance standards in the banking sector, enhance depositor and investor protection, improve audit quality in public sector banks, and promote customer convenience through improved nomination facilities.