BTL 762 - Nomination Rules - Revised – 2024

 

The Banking Tutor’s Lessons

BTL 762                                                                          12-03-2025

Nomination Rules - Revised – 2024

 

The Banking Regulation Act allows single or joint deposit holders to appoint a nominee for their deposit.  Such a nominee can also be appointed for items left in custody of a bank or for a locker hired from a bank.  The nominee can access the deposit, articles, or locker in case of death of the person who nominated him.

 

Vide The Banking Laws (Amendment) Act, 2024, Nomination rules related to Bank Deposits, Lockers etc. are revised.

 

Prior to the above Amendment Act, in case of Deposits, only one Nomination is allowed. The above referred Amendment allows the following :

 

a) The Amendment Act allows the appointment of up to four nominees.  The nomination shall not be made in favour of more than four persons;

 

b) For deposits, such nominees can be appointed either successively or simultaneously while for other purposes they can be appointed successively.

 

Simultaneous Nomination

 

In case of simultaneous nominees, the nomination will be effective in a declared proportion.

 

The nomination shall be made in respect of the whole amount of deposit.

If any nominee dies before receiving deposit from the banking company, the nomination in respect of such nominee alone shall become ineffective and the amount of deposit purported to be nominated in favour of deceased nominee shall be treated as if nomination had not been made in respect of that portion of deposit.

 

Successive Nomination

 

For successive nomination, the nominee who has been named higher in the order of nomination will receive priority.

 

Nomination of the first nominee shall be effective if that nominee survives the person or persons who made the nomination;

 

Nomination of the second nominee shall become effective only after the death of the first nominee;

 

Nomination of any nominee lower in the order of nomination shall become effective only after the death of all the nominees whose names are higher in the order of nomination.

 

Where the order of nomination is not mentioned, persons shall be deemed to have been nominated in the order in which their names appear in the nomination.

 

Sekhar Pariti

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