Account Nomination Rules Change from November 1, 2025: What It Means for Account Holders and Families

From November 1, 2025, new nomination rules under India’s banking law will come into effect. Other governance and audit-related provisions of the Banking Laws (Amendment) Act, 2025, have already been in force since August 1, 2025. These amendments were introduced to modernize banks' management of deposits and governance, and to enhance depositor and investor protection.

One of the most visible changes for customers is the nomination reform. To understand why this change was overdue, let’s look at how the old structure often left families tangled in paperwork when clarity was needed most.

Why the Nomination Rules Change Was Needed

For decades, the single-nominee rule worked until real-life situations exposed its cracks. If the sole nominee predeceased the account holder or failed to claim, banks faced long settlement delays. Families had to produce succession certificates, and disputes over ownership often dragged on for months or years.

As family structures diversified and financial awareness increased, the one-nominee system became outdated. People wanted to distribute their savings between children, parents, or spouses with clear proportions, just as they do in wills. However, the old law didn’t allow such flexibility.

The government and the Reserve Bank of India realized that what began as a procedural issue had become a real-world problem affecting millions. The 2025 amendment is therefore a course correction designed to reflect how India’s banking customers actually live, earn, and save today.

What is Covered Under the New Rules?

What is Covered Under the New Rules?Among its many updates, the most visible and people-facing reform is the overhaul of nomination rules for depositors and locker holders. Earlier, each account allowed only one nominee, which often led to confusion or conflict if that person passed away or if several family members were rightful beneficiaries.

From November 1, 2025, the law introduces a dual-nomination framework. These amendments bring legal clarity to how banks record and honour multiple nominees. 

What are the Two Types of Nominations: Banking Laws (Amendment) Act, 2025?

Before looking at where these apply, it helps to understand what each term means:

1. Simultaneous Nomination

This is when an account holder names more than one nominee at the same time and assigns each a specific percentage of the account balance. All nominees stand on equal footing. Their rights exist concurrently, and the bank distributes the funds according to the declared proportions.

2. Successive Nomination

Here, the account holder lists nominees in order of priority. If the first nominee is unable to claim (for example, has passed away or declines to take the proceeds), the right automatically passes to the next nominee on record, and so on. This ensures that there is always a valid successor without the need for legal intervention.

How These Will Apply from November 1, 2025

1. Simultaneous Nominations (Up to Four Nominees)

Where applicable: Savings accounts, Fixed Deposits, and Recurring Deposits

• Account holders can nominate up to four individuals for each deposit account
• Each nominee’s share must be clearly specified (for example: Spouse 50%, Son 30%, Daughter 20%)
• All nominees are considered together at the time of settlement; the bank disburses amounts directly in the declared ratios
• This system is designed for families or dependents who should benefit together rather than sequentially

2. Successive Nominations (Priority-Based Order)

Where applicable: All deposit accounts, plus lockers and safe-custody articles

• The account holder can list one or more nominees in a ranked order
• If the first nominee is unavailable or deceased, the next in line automatically becomes eligible
• Unlike simultaneous nominations, successive nominations avoid overlap; only the next surviving nominee receives the entitlement
• For lockers and safe-custody items, only successive nominations are permitted to prevent multiple claimants for the same contents

While these are sweeping reforms, the nomination update is the one most customers will encounter directly. Let’s see how this simple change ends years of confusion and delays around accessing a loved one’s savings.

How the Nomination Reform Strengthens Depositor Protection

Allowing multiple or successive nominees might sound like a small administrative tweak, but its implications are far-reaching.

• Simplifies Wealth Transfer: Banks can now release funds to nominees directly in declared proportions, which reduces delays and the burden of succession documentation, especially for smaller deposits. However, legal heirs' rights remain protected under inheritance laws.
• Reduces Legal Confusion: Multiple nominees or clear succession order minimizes family disputes after a depositor’s death.
• Empowers Account Holders: People can now decide how and to whom their savings should be distributed, either by percentage share or order of priority.
• Brings Uniformity Across Banks: The reform standardizes nomination rules for all deposit types and institutions, eliminating grey areas.

In essence, this reform gives clarity to one of the most emotional moments in personal finance, i.e. when someone’s savings are passed on. Moreover, it does so by ensuring that the process is guided by choice, not chance.

What Customers Should Do Before November 1, 2025

Now that the law is in place, the next question is simple: what does this mean for you right now? Banks will begin rolling out revised forms and digital options for updating nominations over the next few months. But customers don’t have to wait.

Here’s how to prepare:

A. Review all your bank accounts. Check if your current nominations reflect your real wishes.

B. Decide on share allocation. You can assign percentage splits among up to four nominees or choose a successive order.

C.  Visit your branch or log in online (when enabled) to update your details.

D. Verify identification. Make sure every nominee’s name, relation, and ID details match across records.

E. Keep copies of acknowledgement receipts. They act as official proof of your new nominations.

Think of this as housekeeping for your finances. The smoother your records are before November 1, the easier the transition will be for both you and your bank.

What Doesn’t Change Under the New Law?

Even as the nomination system becomes more flexible, some fundamentals remain untouched. A nomination is not ownership, it’s a facilitation. The legal heirs’ rights under succession laws stay intact.

In simpler terms, a nominee is a trustee, not an inheritor. The money is handed over to them first, but if there’s a will or court order, the ultimate ownership still follows that direction.

Also unchanged:

• The reform applies only to bank deposits and lockers. Mutual funds, insurance, or demat accounts are not covered.
• Banks will still require standard documentation like death certificates and identity proofs during claims.
• The ₹5 lakh DICGC insurance cover on deposits remains as is, this law doesn’t alter deposit protection limits.

By keeping these boundaries intact, the amendment improves transparency without rewriting inheritance law. It  ensures both legal clarity and depositor convenience can coexist.