In a recent notification, the Reserve Bank of India (RBI) has issued new guidelines to all banks and Non-Banking Financial Companies (NBFCs) regarding the nomination process for Fixed Deposits (FDs), savings accounts, and safety lockers. This measure aims to protect the family members of depositors in case of the depositor's death.
Why is Nomination Necessary?
The RBI has directed that all deposit accounts and lockers must have a nominee, whether they are new or existing accounts. The purpose of this directive is to make the settlement of claims easier and reduce the challenges faced by the families of deceased customers.
Previously, many deposit accounts did not have a nomination, causing complications for the family members when the account holder passed away. With this new guideline, banks and NBFCs will be required to collect nominations from all their customers for the following:
- Fixed Deposit Accounts (FDs)
- Savings Accounts
- Safety Lockers
Key Points of the RBI Notification:
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Nomination Requirement: The new directive mandates that all new and existing depositors provide nominations for their FD accounts, savings accounts, and safety lockers.
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Customer Awareness: Banks and NBFCs are instructed to inform their customers about the benefits of nomination facilities, ensuring they understand the importance of having a nominee to avoid any complications after their death.
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Review Process: The status of nominations will be reviewed by the Customer Service Committee (CSC) or Board of Directors of banks and NBFCs. The progress reports will be submitted to RBI’s DAKSH portal on a quarterly basis, starting from March 31, 2025.
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Frontline Staff Training: Bank staff will be trained to handle nomination requests effectively and assist the families of deceased customers with the claims process.
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Customer Option: During account opening, customers will be given the option to either choose a nominee or opt out of the facility. This will be reflected in the revised account opening forms.
Public Awareness Campaigns:
In addition to direct communication with customers, banks are encouraged to run public awareness campaigns across various media channels to ensure that nominations are completed for all eligible accounts.
Impact on Customers:
This step by the RBI is expected to streamline the process for beneficiaries to claim the funds or access the assets of deceased account holders. By implementing these guidelines, the RBI hopes to reduce the difficulties faced by families, making the financial settlement process smoother and quicker.
The new directive will significantly benefit both individual customers and their families by ensuring that the nominee’s details are readily available, thereby avoiding delays in accessing the funds posthumously.
