New banking law to let depositors name up to four nominees from November 1

The government has announced that the key provisions related to nomination under the Banking Laws (Amendment) Act, 2025, will come into effect from November 1, 2025, the Press Information Bureau (PIB) said in a statement issued on Thursday.

According to PIB, the amendment aims to provide depositors with greater flexibility in making nominations, introduce multiple nominations (up to four), and ensure uniformity, transparency, and efficiency in claim settlement across the banking sector.

The PIB stated that the Banking Laws (Amendment) Act, 2025, was notified on April 15, 2025, and includes 19 amendments across five legislations—the Reserve Bank of India Act, 1934; Banking Regulation Act, 1949; State Bank of India Act, 1955; and Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980. The provisions, according to PIB, will be implemented in phases as notified by the Central Government.

According to the latest PIB notification, the Central Government has announced certain sections that specifically cover nomination facilities for deposit accounts, articles kept in safe custody, and the contents of safety lockers maintained with banks. PIB confirmed that the relevant Gazette Notification on this matter has been made publicly available.

Explaining the details, PIB said that the new provisions will allow depositors to nominate up to four persons, either simultaneously or successively. For deposit accounts, customers can choose either simultaneous or successive nominations, whereas for articles in safe custody and safety lockers, only successive nominations are permitted. PIB added that this flexibility will streamline claim settlement and improve clarity for depositors and their families.

According to PIB, under the simultaneous nomination facility, depositors can specify the share or percentage of entitlement for each nominee, ensuring that the total equals 100%. This makes the distribution of funds transparent and fair. On the other hand, under the successive nomination system, the next nominee becomes effective only upon the death of the previous nominee, ensuring continuity in claim settlement and preventing disputes, PIB explained.

PIB further noted that the Banking Companies (Nomination) Rules, 2025—which will outline the procedures and prescribe forms for making, cancelling, or modifying multiple nominations—are being finalised and will be published soon. These rules will implement the nomination provisions consistently across all banks, ensuring uniformity and ease of application.

Earlier, some sections mainly focused on governance, reporting, and audit reforms in the banking sector.

PIB highlighted that the Banking Laws (Amendment) Act, 2025, aims to strengthen governance standards, improve depositor and investor protection, and enhance audit quality in public sector banks. It also seeks to promote customer convenience through better nomination facilities and ensure consistency in banks’ reporting to the Reserve Bank of India.