Nomination under Banking Laws Amendment Act 2025

• 24 Oct 2025
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From 1 November 2025 onwards, key provisions pertaining to Nomination under Banking Laws Amendment Act 2025 will come into force. The Banking Laws Amendment Act 2025, notified on 15th April 2025, contains 19 amendments across five legislation namely the following: (i) the Reserve Bank of India Act 1934, (ii) Banking Regulation Act 1949, (iii) State Bank of India Act 1955 (iv) Banking Companies Acquisition and Transfer of Undertakings Act 1970 and (v) Banking Companies Acquisition and Transfer of Undertakings Act 1980.

As per the notification, the provisions of the Banking Laws (Amendment) Act, 2025 “shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint” and different dates may be appointed for different provisions under the Act.

The Central Government has announced that the provisions outlined in Sections 10, 11, 12 and 13 of the Banking Laws Amendment Act 2025 will come into effect on 1 November 2025. These provisions effective from 1 November 2025 pertain to nomination facilities for deposit accounts, items kept in safe custody and the contents of safety lockers maintained at banks.

Below, we have mentioned the key features of these provisions:

• Several Nominations: Up to four persons may be nominated by the customers, either successively or simultaneously. This would make claim settlements simpler for depositors as well as their nominees.

• Deposit Accounts’ Nominations: Based on preference, the depositors may go for either simultaneous or successive nominations.

• Simultaneous Nomination: Depositors may nominate up to four individuals and specify the share or percentage of entitlement for each nominee. The total entitlement must equal 100 percent. This feature will ensure the distribution among all the nominees is clear and transparent.

• Successive Nomination: Individuals who hold deposits, articles in safe custody or lockers may designate up to four nominees. In this case, the next nominee becomes active only upon the death of the higher placed nominee. This method will ensure continuity in the settlement process and will also offer clarity regarding succession.

• Nomination for Articles in Safe Custody and Safety Lockers: For these facilities, only successive nominations are allowed. 

These provisions’ implementation will provide the depositors with flexibility to make nominations based on their preference. At the same time, they will ensure uniformity, transparency and efficiency when it comes to claim settlement across the banking system.

In due course, the Banking Companies Nomination Rules 2025 detailing the procedure and prescribed forms for making, cancelling or specifying multiple nominations will be published. These rules will operationalise the provisions uniformly across all banks in the country.

The Banking Laws Amendment Act 2025 aims, among other goals, to strengthen governance standards in the banking sector, ensure uniform reporting by banks to the Reserve Bank of India, enhance protection for depositors and investors, improve audit quality in public sector banks and promote customer convenience via improved nomination facilities. In addition to this, the said Act provides for the rationalization of tenure of directors in cooperative banks, with the exclusion of the Chairman and Whole Time directors.

Source: Press Information Bureau (PIB)