If you haven’t yet designated a nominee for your bank account, this news is extremely important for you. The Reserve Bank of India (RBI) has now strictly instructed banks to explain in detail the benefits and conveniences of adding a nominee to every customer when opening an account. This step by the RBI is crucial for securing your financial future and protecting your family from legal hassles in an emergency. Learn about RBI’s new and revolutionary rules regarding nominees.
RBI’s New Directive
According to the new RBI rule, banks must now ensure that they explain the importance of adding a nominee to every customer. Banks will now explain to customers that, in the event of an account holder’s untimely death, having a nominee allows for the easy transfer of the money deposited in the bank without any legal hassles. This process protects the family from financial hardship.
Nomination is not mandatory, but a written refusal is required
The RBI’s new directive clarifies that banks will now provide customers with the option to add or not add a nominee. If a customer does not wish to nominate a nominee, they must provide this in writing. The bank must record this information in its records. However, if the customer meets all other requirements, the bank cannot refuse to open an account simply because they do not provide a nominee.
Claim Settlement Rules Upon Death of a Nominee
The new rules also state that if there is more than one nominee in an account and one of them dies, that person’s nomination will automatically be considered cancelled. In such cases, banks will settle the claim under the RBI’s ‘Settlement of Claims Directions, 2025’. This means that if no valid nomination remains, the bank will proceed as per those guidelines.
The nominee’s name will appear on passbooks and statements
The RBI has also directed banks to clearly display the “Nomination Registered” status on customers’ passbooks, account statements, and fixed deposit receipts. Furthermore, to avoid any confusion, the nominee’s name will also be clearly mentioned on these documents.
Every application must be processed within three working days
To ensure fast and efficient service, the RBI has directed banks to process every nomination request—whether it’s for registration, cancellation, or update—within three working days. If the bank rejects a nomination request for any reason, it must provide the customer with a written explanation within the same period.
Why is adding a nominee so important
Often, after a person’s death, the family has to go through a lengthy legal process to withdraw money from the bank, which wastes both time and energy. However, if a nominee is added to the account, the bank transfers the money directly to that person. This ensures immediate financial assistance to the family and eliminates delays. This is why the RBI consistently advises customers to add a nominee.