New Banking Law Allows Up To 4 Nominees In Bank Accounts Starting November 1, 2025: Complete Guide

Provisions relating to Nomination under Banking Laws (Amendment) Act will become effective starting next month

From November 1, 2025, bank customers will have the option to designate up to four nominees for their accounts, a measure designed to enhance uniformity and efficiency in claim settlements across the banking system.

According to a Thursday statement from the finance ministry, the essential nomination provisions outlined in the Banking Laws (Amendment) Act, 2025 will come into force on November 1, 2025.

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

These amendments allow customers to nominate up to four individuals, either simultaneously or successively, thereby simplifying the claim settlement process for both depositors and their nominees.

Depositors now have the flexibility to choose between simultaneous or successive nominations based on their personal preferences.

For nominations related to articles in safe custody and safety lockers, only successive nominations will be permitted.

The statement explained that "Depositors may nominate up to four persons and specify the share or percentage of entitlement for each nominee, ensuring that the total equals 100 percent and enabling transparent distribution amongst all nominees."

Individuals who maintain deposits, articles in safe custody, or lockers can specify up to four nominees, with the arrangement that the next nominee becomes operative only upon the death of the nominee placed higher in succession, ensuring continuity and clarity in the settlement process.

"The implementation of these provisions will give depositors the flexibility to make nominations as per their preference, while ensuring uniformity, transparency, and efficiency in claim settlement across the banking system," the ministry statement noted.

The Banking Companies (Nomination) Rules, 2025, which will detail the procedures and prescribed forms for making, cancelling, or specifying multiple nominations, will be published soon to ensure uniform implementation across all banks.

"The central government had earlier appointed August 1, 2025 as the date on which certain provisions of the said Amendment Act, namely Sections 3, 4, 5, 15, 16, 17, 18, 19 and 20, came into force vide Gazette Notification S.O. 3494(E) dated 29th July 2025," the statement added.

The Banking Laws (Amendment) Act, 2025 aims to strengthen governance standards in the banking sector, ensure uniformity in reporting by banks to the Reserve Bank of India, enhance depositor and investor protection, improve audit quality in public sector banks, and promote customer convenience through improved nomination facilities.

Additionally, the Act provides for rationalizing the tenure of directors, other than the Chairman and whole-time directors, in co-operative banks.

Previously, on July 29, the government had notified amendments to the Banking Laws (Amendment) Act, 2025 allowing public sector banks (PSBs) to transfer unclaimed shares, interest, and bond redemption amounts to the Investor Education and Protection Fund (IEPF), aligning them with practices followed by companies under the Companies Act.

These amendments also empower PSBs to offer remuneration to statutory auditors, facilitating the engagement of high-quality audit professionals and enhancing audit standards, as stated by the Finance Ministry.

Furthermore, the gazette notification dated July 29, 2025, has increased the threshold of 'substantial interest' from Rs 5 lakh to Rs 2 crore, marking the first such amendment since 1968.

Additionally, the notification aligns director tenures in cooperative banks with the 97th Constitutional Amendment by increasing the maximum tenure from 8 years to 10 years, excluding the chairperson and whole-time director.