RBI mandates full nomination coverage for deposit accounts

RBI/2024-25/104 Ref.No.DoS.CO.PPG/SEC.13/11.01.005/2024-25 January 17, 2025 The Chairman / Managing Director / Chief Executive Officer All Scheduled Commercial Banks (Excluding RRBs) All Primary (Urban) Co-operative Banks All Deposit Taking NBFCs (Excluding HFCs) [Supervised Entities (SEs)] Madam / Dear Sir Coverage of customers under the nomination facility As you are aware, the nomination facility is intended to minimise the hardship and facilitate expeditious settlement of claims of the family members on the death of depositor/s. 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. 2. However, on the basis of Reserve Bank’s supervisory assessment, it is observed that in a large number of deposit accounts, nomination is not available. To avoid inconvenience and undue hardship to survivors/ family members of deceased depositors, we reiterate the need to obtain nomination in case of all existing and new customers having deposit accounts, safe custody articles and safety lockers, as the case may be. 3. The Customer Service Committee (CSC) of the Board/ Board of Directors shall review, on a periodic basis, the achievement of nomination coverage. Progress in this regard shall be reported by the SEs in Reserve Bank’s DAKSH portal on a quarterly basis starting from March 31, 2025. Further, the frontline staff in the branches may be suitably sensitised for obtaining nomination as well as appropriate handling of claims of deceased constituents and dealing with nominees/ legal heirs. The Account Opening Forms may be modified suitably (if not already done) with provision for the customers to avail or opt out of nomination facility. 4. Apart from directly notifying the customers, SEs are advised to publicise the benefits of using the nomination facility through various media, including launching of periodical drives towards achieving a full coverage of all eligible customer accounts. Yours faithfully (Tarun Singh) Chief General Manager 1 DBR.No.Leg.BC.21/09.07.006/2015-16 dated July 1, 2015 2 DCBR.CO.BPD.(PCB).MC.No.15/12.05.001/2015-16 dated July 1, 2015 3 DNBR.PD.002/03.10.119/2016-17 dated August 25, 2016 (updated as on October 10, 2023)

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2024-25/104 · issued 17 Jan 2025. The plain-English explanation above is BankPulse’s own independent summary.

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