RBI Rule:- In today’s world, it is impossible to predict when or to whom a mishap might occur; anything can happen at any time. People often save money in bank accounts for their families because life is unpredictable. In such a scenario, it is crucial for account holders to register a nominee’s name on their account. This ensures that if an unfortunate event leads to the account holder’s death, the Nominee can withdraw the funds.
However, a question arises: what happens if the registered nominee passes away before the account holder? Who would then receive the money? Also, how soon can the nominee withdraw the funds? Let us find the answers to these questions.
How soon can the money be withdrawn?
According to Reserve Bank of India (RBI) regulations, there is no fixed time limit for a nominee to withdraw funds following the account holder’s death. This means the nominee can file a claim immediately after the death, or even months or years later. A bank cannot reject a claim simply because the nominee has delayed making it. However, it is advisable to complete the claim process as soon as possible after the death.
What happens if the nominee does not withdraw the money?
If the money remains unwithdrawn for more than five years, the account is classified as ‘inoperative’ or ‘unclaimed.’ Banks transfer the funds from such accounts to the Reserve Bank’s ‘Depositor Education and Awareness’ fund. However, this does not mean the money is lost forever; the nominee can claim the funds from the bank at any time by presenting the necessary documents.
What is the RBI rule?
According to the rules, once the nominee submits all required documents, the bank is obligated to transfer the funds to them within 15 days. For this process, the nominee must visit the bank branch where the account was opened. There, they will need to fill out a claim form and submit certain necessary documents to the bank, such as the account holder’s original death certificate, the nominee’s identity proof (Aadhaar card, PAN card, etc.), and the account passbook or chequebook.
