RBI Notification: To avoid difficulties to the family members of deceased depositors, RBI has directed banks and NBFCs to get nomination from all their existing and new customers for fixed deposits, savings accounts and lockers.
RBI Notification to all Commercial Banks, Urban Co-operative Banks, Deposit Taking NBFCs: The Reserve Bank of India (RBI) has issued instructions to all banks, primary urban co-operative banks and NBFCs (non-banking financial companies) regarding nominees in fixed deposits (FDs) and savings accounts. According to the notification issued on Friday, nomination is now necessary for every FD, savings account and locker. This step of the central bank is to save the family members of the bank customer from difficulties in case of his death.
Why is nomination necessary
RBI has instructed all commercial banks and NBFCs to get nomination from all their existing and new customers for fixed deposits, savings accounts and lockers. Its purpose is to save the family members of the customers using the facility of FD, savings account or bank locker from difficulties in case of their death.
According to RBI, the nomination facility is aimed at facilitating the settlement of claims and reducing difficulties for the family members of the depositors on their death. Instructions for nomination facility for banks and NBFCs have been included in the Master Circular and Master Guidelines. Apart from this, the existing instructions also state that banks should inform their customers about the nomination facility and tell them about its benefits.
The Reserve Bank of India has found that the nomination facility is not available in many deposit accounts. This leads to the problem that when a depositor dies, his family members may have difficulty in getting the money. Therefore, RBI has directed all banks to obtain nominations from existing and new customers, whether they are owners of fixed deposit accounts, savings accounts or safety lockers.
The Customer Service Committee (CSC) or the Board of Directors will have to regularly review the status of nomination coverage. The progress report of this review will be submitted on the Reserve Bank’s DAKSH portal on a quarterly basis starting from March 31, 2025. In addition, frontline staff at branches will be trained to effectively handle nomination requests and claims of deceased customers. The account opening form will be revised in such a way that customers are given the option to choose a nominee or opt out of the nomination facility.
Apart from directly informing customers, banks have been advised to publicize the benefits of the nomination facility using various media channels. Under this, banks should run campaigns from time to time to ensure that nomination is done in all eligible accounts.
