The purpose of including nominees in bank accounts and lockers is to reduce the hardship of the family members on the death of the account holder. By having a nominee, banks are facilitated in reducing unnecessary amounts. In view of this, the Reserve Bank of India (RBI) has issued a notice stating that banks and NBFCs do not have the option of involving nominees for existing savings accounts.
RBI Issued Notice on Nominee of a Bank Account
According to the RBI notice, a large number of savings accounts have not been named in nominees. Thousands of crores of rupees are lying in the country’s banks and NBFCs, which have no nominees. Some of these accounts don’t even have nominee details.
- The RBI has directed banks to keep nominee names in the savings accounts and safety lockers of all new and existing customers.
- The notice also said that the frontline staff of the branch may be trained to receive nominees as well as properly settle the claims of the deceased’s family and deal with nominees/legal heirs.
Nominee’s Name is not Available in a Large Number of Savings Accounts
RBI said that no one has been nominated in a large number of accounts. The purpose of naming a nominee is to reduce the hardship of the family members on the death of the depositor and to ensure speedy settlement of claims. Based on the Reserve Bank’s assessment, as per the Central Bank’s notice, a large number of savings accounts are found to have no nominations.
“To avoid problems and inconvenience to family members of deceased depositors, we have asked nominees for all existing and new customers who have savings accounts, safe custody articles and security lockers,” the central bank said. RBI said that the Customer Service Committee (CSC) of the Board of Directors should obtain enrollment coverage on a regular basis as the portal has to be updated every quarter. In this context, the progress report should be given on the Reserve Bank’s Dak portal on a quarterly basis from 31 March 2025 onwards.
Account Opening Form to Have Option to Avail or Opt Out for Nominee Facility
RBI said that the account opening form may be suitably modified (if not already done) to enable the customer to avail or opt out of the prescribed facilities. Apart from informing the customers directly, the concerned banks and NBFCs have also been asked to convey the benefits of using the nomination facility through various media to achieve full coverage of various eligible customer accounts.
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