Mumbai (ABC Live): India’s banking system is set to witness a significant procedural reform from 1 November 2025, when the key nomination provisions of the Banking Laws (Amendment) Act, 2025, will officially come into force.
These provisions, notified through Gazette Notification S.O. 4789(E) dated 22 October 2025, are designed to give depositors greater flexibility, transparency, and control over how their deposits, lockers, and valuables are claimed after their lifetime.

The Banking Laws (Amendment) Act, 2025, which was originally notified on 15 April 2025, marks one of the most comprehensive updates to India’s core banking legislation in recent years. The Act introduces 19 amendments across five key laws:

• 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) Acts, 1970 and 1980

Through these changes, the Central Government and the Reserve Bank of India (RBI) aim to strengthen governance, enhance depositor protection, and simplify banking procedures for millions of customers.

Why Nomination Reforms Matter

Until now, depositors could nominate only a single person to claim the deposit or contents of a locker in the event of their demise. This often led to delays and disputes in claim settlements, especially in families with multiple legal heirs.
The new provisions under Sections 10, 11, 12, and 13 of the Amendment Act modernise this outdated framework, offering depositors multiple nomination options while ensuring legal clarity and operational uniformity.

In a country where nearly 80% of adults have bank accounts but awareness of nomination procedures remains limited, this reform has both practical and emotional significance. It ensures that a depositor’s wishes are respected without burdening their family with complex procedural hurdles.

Key Highlights of the New Nomination Framework

1. Flexibility through Multiple Nominations

For the first time, depositors will be allowed to nominate up to four individuals, either simultaneously or successively, as per their preference.
This change brings Indian banking practice in line with international standards, particularly in economies where family and succession structures are complex.

2. Simultaneous Nominations for Deposit Accounts

Depositors can choose simultaneous nomination, specifying the percentage share each nominee will receive from the deposit.
For instance, if a depositor nominates four individuals, they can divide the entitlement — 40%, 30%, 20%, and 10% — ensuring that the total equals 100%. This method provides transparency, fairness, and legal certainty for all claimants.

3. Successive Nominations for Continuity

In the successive nomination model, the depositor can list up to four nominees in a particular order of priority. If the first nominee passes away before making a claim, the next nominee in sequence becomes eligible.
This ensures continuity in settlement and avoids legal ambiguity, a long-standing concern in banking operations.

4. Nomination for Lockers and Safe Custody Articles

For lockers and articles kept in safe custody, only successive nominations are permitted.
This ensures that access to sensitive or valuable assets remains orderly, secure, and legally consistent. It also provides clarity to banks and heirs in dealing with stored jewellery, documents, or other valuables.

The Broader Impact: A Uniform and Transparent Banking Ecosystem

The implementation of these provisions marks a decisive move toward creating a uniform, transparent, and customer-friendly nomination regime across India’s banking sector.
Previously, different banks followed varied internal practices for handling nomination claims, often causing delays and confusion. The new law eliminates this inconsistency by establishing a single national standard.

Additionally, the upcoming Banking Companies (Nomination) Rules, 2025 — expected to be notified shortly — will prescribe the formats, procedures, and processes for making, cancelling, or modifying nominations.
This will operationalise the provisions and ensure that banks integrate these options seamlessly into both physical and digital banking systems.

Previous Amendments Already in Force

Before this phase, the Central Government had already brought several governance and regulatory provisions of the same Act into effect from 1 August 2025, via Gazette Notification S.O. 3494(E) dated 29 July 2025.
Those earlier amendments (Sections 3, 4, 5, and 15–20) aimed to:

• Improve corporate governance in banks.

• Ensure uniform regulatory reporting to the RBI;

• Strengthen audit oversight in public sector banks.

• Enhance investor and depositor protection; and

• Rationalise the tenure of non-executive directors in co-operative banks.

Together, these amendments represent a comprehensive reform package for India’s banking governance architecture — balancing depositor convenience with institutional accountability.

Policy Intent and Forward Path

By enabling multiple and successive nominations, the government has recognised a long-standing public demand for flexibility in succession management.
This initiative is expected to reduce disputes, speed up claim settlements, and bring empathy and efficiency into post-demise banking processes.

The reform also aligns with the Digital Banking Mission and the broader goal of customer-centric financial inclusion under the government’s Amrit Kaal Vision 2047.
Once the Banking Companies (Nomination) Rules, 2025 are notified, customers will likely be able to update or modify their nominations online through net-banking and mobile applications, further simplifying the process.

Conclusion

In essence, the nomination provisions of the Banking Laws (Amendment) Act, 2025, combine legal innovation with administrative clarity. They empower customers, protect families, and reduce friction between legal heirs and banks.
From 1 November 2025, every depositor will enjoy choice, transparency, and security — key pillars of modern banking governance.

Official References

1. Gazette Notification S.O. 4789(E) (22 Oct 2025) – View Here

2. Gazette Notification (Principal Act) (15 Apr 2025) – View PDF

3. Gazette Notification S.O. 3494(E) (29 Jul 2025) – View PDF

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