FDs, savings account: RBI has issued a directive to banks. The central bank has said that banks should ensure nominees in deposit accounts and safety lockers of new and all existing customers. The nomination facility is aimed at reducing the hardships of family members on the death of depositors and speedy settlement of claims.
FDs, savings account: The Reserve Bank of India (RBI) has issued instructions to banks and NBFCs (non-banking financial companies) regarding nominee (legal heir). According to this, nomination is now necessary for every Fixed Deposit (FD), savings account and locker. RBI has ordered all banks to get nomination from every old and new customer. The purpose of the nomination facility is to reduce the difficulties of family members on the death of the depositor / depositors and to settle claims quickly. The central bank circular states that nominees are not available in a large number of deposit accounts. Know why nomination is necessary…
What is the reason?
According to the Economic Times report, RBI has found that many accounts do not have nomination. In such a situation, if the account holder dies, his family members have to face a lot of difficulties. With nomination, if any family member dies, the nominee will easily get the money from his savings account, FD or locker without any delay or legal hassle.
What are the instructions?
According to RBI’s circular on Friday, instructions for nomination for Scheduled Commercial Banks (except SCBs – RRBs), Primary (Urban) Co-operative Banks (UCBs) and deposit taking NBFCs have been included in the master circular. In these rules, banks have also been told to explain the benefits of nomination to the people properly and give information about it everywhere.
How will monitoring be done?
According to the new RBI directive, the Customer Service Committee (CSC) or the Board of Directors will regularly review the nomination status. From March 31, the progress report will be given through the DAKSH portal every quarter. Changes will also be made in the account opening form so that customers can choose a nominee or refuse nomination. RBI has said that campaigns should be run from time to time.
Who is a nominee?
In an account or investment, the nominee is the person whom the account holder wants to get his money after his death. When you open an account or add the name of the nominee later, it ensures that the account holder’s property is easily transferred to that person. This person can be a family member or friend or acquaintance. The account holder can change the name of the nominee from his account whenever he wants.
Why is it important?
By having a nomination, the family can avoid legal hassles. If there is no nominee, then the family members or legal heirs have to go through a long and tiring process to get the property. If there is a nominee, he just has to show his address, bank details and identity card and the money will be transferred in his name.
Important to avoid hassles
Due to the absence of a nominee, the family of the deceased person may face legal hurdles in getting money from the bank/insurance company. Sometimes a distant relative or an unknown person also declares himself as the heir. In such a situation, the matter gets more complicated. If there is a dispute among the family members, then the matter goes to the court. It may take 6 months or several years to be decided. To avoid this hassle, get the name of the nominee registered in your account today itself.
