The Reserve Bank of India has issued a notification stating that nomination is not available in a large number of deposit accounts with banks and NBFCs. To avoid undue hardship to survivors/ family members of deceased depositors, the RBI has asked banks to obtain nomination in case of all existing and new customers having fixed deposit accounts, savings accounts, and safety lockers. Having a nomination will make it easier to transfer funds from savings account, fixed deposit, or safe deposit lockers to the eligible person (nominee) without any delay or legal issues.
Also read: Bank account, bank locker rule change: Lok Sabha passes new Banking Amendment Bill, allowing up to 4 nominees in savings, locker accounts
The nomination facility is designed to lessen the hardship and speed up the resolution of family members’ claims following the death of the depositor or depositors. According to the RBI circular on January 17, 2025, “Instructions on nomination facility for Scheduled Commercial Banks (SCBs) (Excluding RRBs), Primary (Urban) Co-operative Banks (UCBs) and Deposit taking NBFCs have been incorporated in Master Circular on “Customer Service in Banks”1, Master Circular on “Customer Service – UCBs”2 and Master Direction on “Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016”3, respectively. The extant instructions also mandate banks to give wide publicity and provide guidance to deposit account holders on the benefits of the nomination facility.”
How to add a nominee to your SBI savings account, fixed deposits (FD)
Who is a nominee
A nominee in an account or investment is the person the account holder wants the funds to be transferred to, in case the account holder/investor passes away. Filling in a nominee’s name when opening an account or adding it later ensures that the account holder’s assets are transferred smoothly to the person chosen for the purpose. According to the ICICI Bank website, “A nominee is a person or entity who is designated to receive the funds in a bank account after the account holder passes away. The nominee is responsible for ensuring that the funds are used as the account holder intended.”
Importance of nomination
The family can avoid legal issues by having a nominee. According to the Bandhan Bank website, “There is a key reason behind nominations and assigning nominees. If a person dies, their investments can be transferred to their nominee. In case there is no nominee assigned, the family or legal heirs will have to go through a long and tedious process to receive the investments and assets of the demised person. There could be a long wait and delay in receiving the process in case there is no nomination. They would have to produce a will, certificate, or other documents proving their position. Such a situation can cause delays and strain situations for the unassigned nominee or next of kin. If a nominee is assigned, they would just need to provide their address proof, bank details, and ID at the time of claim to have the investments transferred to their name.”Implementation and monitoring of nomination in accounts
As per the latest RBI notification, the Customer Service Committee (CSC) or the Board of Directors will review the status of nomination coverage regularly. Progress is to be reported quarterly through the DAKSH portal starting March 31, 2025. The RBI circular said that the branch staff should be trained to handle nomination requests and claims of deceased customers efficiently. Account Opening Forms should also be updated to include options for customers to nominate a person or opt out of the nomination facility.
In addition to notifying customers directly, banks are encouraged to use various media channels to raise awareness about the nomination facility. Periodic drives should be organized to ensure full coverage of eligible accounts with nomination, the RBI said.
How to update nominee in HDFC Bank
Here’s how you can use NetBanking to instantly update nominee details, according to the HDFC Bank website.
Step 1 : Login to NetBanking using your NetBanking ID and Password
Step 2 : Go to the Request section of ‘Accounts’ tab
Step 3 : Select ‘View/Update’ Nomination Details
Step 4 : Select the Account for which you want to update the nominee. Click on ‘Modify’ to modify the nominee details – add a new nominee or replicate nominee of another account
Step 5 : Fill in the details and Confirm
Note : Applicable for Single account holders
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