Nomination Provisions Of Banking Laws (Amendment) Act, 2025 Effective From Nov 1

New Delhi, Oct 23 (KNN) The Central Government has notified that the provisions relating to nomination under the Banking Laws (Amendment) Act, 2025 will come into effect from 1st November 2025. 

The Amendment Act, initially notified on 15th April 2025, introduces 19 amendments across five legislations: the Reserve Bank of India Act, 1934, Banking Regulation Act, 1949, State Bank of India Act, 1955, and the Banking Companies (Acquisition and Transfer of Undertakings) Acts, 1970 and 1980.

The sections coming into force from 1st November — Sections 10, 11, 12, and 13 — pertain to nomination facilities for deposit accounts, articles kept in safe custody, and safety locker contents maintained with banks. 

Different provisions of the Act are being operationalised on different dates, as notified in the Official Gazette.

The nomination provisions now allow customers to designate up to four nominees, either simultaneously or successively, simplifying claim settlement for depositors and their beneficiaries. 

For deposit accounts, customers may choose between simultaneous or successive nominations according to their preference. 

In the case of safe custody items or safety lockers, only successive nominations are permitted. Under simultaneous nomination, depositors can specify up to four nominees and allocate the share or percentage of entitlement for each, ensuring transparent distribution that totals 100 percent. 

Successive nomination allows up to four nominees for deposits, articles, or lockers, with each nominee becoming effective only upon the death of the higher-ranked nominee, providing continuity and clarity in succession.

These provisions are expected to enhance flexibility, transparency, and efficiency in claim settlements across the banking system. 

The Banking Companies (Nomination) Rules, 2025, detailing procedures and prescribed forms for making, cancelling, or specifying multiple nominations, will be issued in due course to operationalise these rules uniformly across all banks.

The Banking Laws (Amendment) Act, 2025 is designed to strengthen governance standards across the banking sector, ensure uniform reporting by banks to the Reserve Bank of India, and enhance protection for depositors and investors. 

It also aims to improve audit quality in public sector banks, promote customer convenience through enhanced nomination facilities, and rationalise the tenure of directors—excluding the Chairman and whole-time directors—in co-operative banks.

(KNN Bureau)