Nomination Facility in Banks: 2025 Amendment, 4 Nominees & Exam Guide
Nomination Facility in Banks — Complete Guide (Banking Laws Amendment 2025)
⚡ Quick Facts — Nomination in Banks
| Legal basis | Sections 45ZA to 45ZF, Banking Regulation Act, 1949 |
| Procedural rules | Banking Companies (Nomination) Rules, 2025 (effective Nov 1, 2025) |
| Max nominees (post-2025) | Up to 4 nominees — simultaneously or successively |
| Old limit (pre-Nov 2025) | Only 1 nominee per account |
| Simultaneous nomination | Up to 4 nominees with specified percentage share (must total 100%) |
| Successive nomination | Nominees in order of priority — next nominee steps in only if prior nominee is deceased |
| Who can be a nominee | Any individual — including minor, illiterate; NOT joint names, institutions, trusts |
| Nominee’s right | Right to receive money — NOT ownership; estate of deceased governs inheritance |
| Consent of nominee | Not required |
| Applicable accounts | All deposit accounts (individual) · Safe custody articles · Safe deposit lockers |
| Nominee on passbook/TDR | Printed at depositor’s specific request |
Nomination in banks is a consistently tested topic at all promotion scales — typically 3–5 marks. The Banking Laws (Amendment) Act, 2025 brought landmark changes effective November 1, 2025: depositors can now name up to 4 nominees (simultaneous or successive), replacing the earlier single-nominee limit. Questions will test 2025 provisions at all exams from late 2025 onward.
Legal Framework
| Instrument | Coverage |
|---|---|
| Sections 45ZA–45ZF, BR Act 1949 (as amended 2025) | Deposit accounts, safe custody articles, safe deposit lockers — nomination framework |
| Banking Companies (Nomination) Rules, 2025 | Procedural rules — effective November 1, 2025; replaced 1985 Rules |
| Section 45ZG (inserted 2025) | Priority provisions for successive nominees |
Two Types of Nomination (Post-November 2025) NEW
1. Simultaneous Nomination
- Up to 4 nominees can be designated at the same time
- Depositor must specify the percentage share of each nominee
- All shares must add up to 100%
- If a nominee predeceases the depositor, that nominee’s share lapses — it is treated as if no nomination was made for that portion (it then goes to the estate of the deceased depositor)
- Priority provisions of Section 45ZG do NOT apply to simultaneous nominations
2. Successive Nomination
- Nominees are designated in an order of priority
- Only one nominee is recognised at a time — the highest-priority living nominee
- If the first nominee survives the depositor, only the first nominee receives the proceeds
- If the first nominee has predeceased the depositor, the second nominee steps in — and so on down the priority list
- Priority rules are governed by Section 45ZG
In simultaneous nomination: all living nominees at time of depositor’s death receive their designated percentage share simultaneously.
In successive nomination: only the highest-priority surviving nominee receives — the rest get nothing unless all above them have predeceased the depositor.
These are fundamentally different — confusing them is a common MCQ error.
Pre-2025 vs Post-2025: Key Differences
| Feature | Before Nov 1, 2025 | After Nov 1, 2025 |
|---|---|---|
| Max nominees | 1 (one only) | Up to 4 |
| Nomination type | Single nominee | Simultaneous (% share) OR Successive (priority order) |
| Governing rules | Banking Companies (Nomination) Rules, 1985 | Banking Companies (Nomination) Rules, 2025 |
| Locker nominees | 1 nominee for sole; multiple for joint lockers | Up to 4 (simultaneous or successive) |
| Section reference | 45ZA–45ZF | 45ZA–45ZG (45ZG added for priority rules) |
Who Can Be a Nominee?
- Any individual — Indian or foreign national, resident or non-resident
- Minors — valid nominees; a guardian must be named to receive money on the minor’s behalf
- Illiterate persons — valid nominees
- Cannot be: Joint names, institutions, companies, trusts, societies — nomination must be in favour of an individual
Accounts Where Nomination is Available
| Account / Facility | Nomination Available? | Notes |
|---|---|---|
| All deposit accounts — savings, current, FD, RD | ✅ Yes | Individual accounts only; not applicable to accounts held by institutions |
| Joint accounts (E or S, A or S) | ✅ Yes | Nominee’s right arises only after death of ALL joint holders (if not E or S) |
| Safe custody articles | ✅ Yes | Nominee can claim articles on depositor’s death |
| Safe deposit lockers | ✅ Yes | Up to 4 nominees under 2025 rules |
| Accounts in name of companies / trusts / institutions | ❌ No | Nomination only for individual account holders |
Key Rules on Nomination
- Consent of nominee is NOT required — the depositor nominates unilaterally
- Nomination on a term deposit continues in force on renewal — unless specifically cancelled or changed
- The depositor can change nomination any number of times during the life of the deposit — no limit on changes
- Nomination for illiterate depositors: bank must obtain two witnesses at the time of accepting the nomination
- Nominee’s name printed on Passbook / TDR only at the specific request of the depositor
Nominee’s Legal Position — The Critical Distinction
The Supreme Court has clarified (in Ram Chander Talwar v Devender Kumar Talwar) that:
- The nominee gets the right to receive the money from the bank — the bank is discharged from its obligation once it pays the nominee
- The nominee does NOT acquire ownership of the money — the money forms part of the estate of the deceased depositor
- The money then devolves to the legal heirs as per the applicable law of succession (Hindu Succession Act, Muslim Personal Law, Indian Succession Act, etc.)
- A nominee who is also the sole legal heir does get full ownership — but this is by virtue of inheritance law, not nomination
Settlement of Claims Under Nomination
Bank must obtain attestation from one of the following before paying the nominee:
- Magistrate / Judicial Officer, OR
- An officer of the Central or State Government, OR
- An officer of a bank, OR
- Two persons acceptable to the bank
Practice Nomination MCQs
The 2025 changes — 4 nominees, simultaneous vs successive, nominee’s legal status — are prime MCQ territory. Our course includes 10+ nomination questions with full explanation of the 2025 amendment.
View Course Details →One-Liners for Quick Revision
- Nomination governed by Sections 45ZA to 45ZG, Banking Regulation Act, 1949.
- Procedural rules: Banking Companies (Nomination) Rules, 2025 — effective November 1, 2025.
- Pre-2025: only 1 nominee. Post-2025: up to 4 nominees (simultaneous or successive).
- Simultaneous nomination: up to 4 nominees with percentage shares totalling 100%.
- Successive nomination: nominees in priority order — only one active at a time (Section 45ZG).
- Nominee can be any individual — including minor or illiterate. Not joint names, institutions, or trusts.
- Consent of nominee is NOT required.
- Nomination available for all individual deposit accounts, safe custody articles, and safe deposit lockers.
- Nomination on FD continues on renewal unless specifically cancelled or changed.
- Depositor can change nomination any number of times — no limit.
- Illiterate depositor making nomination: two witnesses required.
- Nominee’s name on passbook/TDR only at depositor’s specific request.
- Nominee gets right to receive money — does NOT get ownership. Money forms part of deceased’s estate.
- SC ruling: Ram Chander Talwar v Devender Kumar Talwar — nominee holds as trustee for legal heirs.
- Bank is discharged from liability once it pays the nominee — legal heirs must claim from nominee.
- Simultaneous: if a nominee predeceases depositor, their share lapses (no substitution).
- Successive: if a nominee predeceases depositor, next-in-priority nominee steps in.
Frequently Asked Questions
How many nominees can be added to a bank account after the 2025 Banking Laws Amendment?
Under the Banking Laws (Amendment) Act, 2025 (effective November 1, 2025), a depositor can now nominate up to 4 persons — either simultaneously or successively. Previously, only 1 nominee was allowed. In simultaneous nomination, each nominee receives a specified percentage share (totalling 100%). In successive nomination, nominees are listed in priority order and only the highest-priority surviving nominee receives the proceeds.
What is the difference between simultaneous and successive nomination in banks?
In simultaneous nomination (Section 45ZA(1B)): up to 4 nominees are designated at the same time, each with a specified percentage share of the deposit adding to 100%. All living nominees at the time of the depositor’s death receive their designated share. In successive nomination (Section 45ZA(1A) and 45ZG): nominees are ranked in order of priority. Only the highest-priority nominee who is alive at the time of the depositor’s death receives the proceeds — subsequent nominees receive nothing unless all higher-priority nominees have already died.
Does a bank nominee become the owner of the deposit after the depositor’s death?
No. The Supreme Court clarified in Ram Chander Talwar v Devender Kumar Talwar that a bank nominee gets the right to receive the money from the bank — which discharges the bank’s liability — but the nominee does not become the owner. The money forms part of the deceased depositor’s estate and devolves to the legal heirs according to the applicable succession law (Hindu Succession Act, Indian Succession Act, etc.). The nominee essentially acts as a trustee for the legal heirs.
Which accounts are eligible for nomination facility in banks?
Nomination is available for all individual deposit accounts (savings, current, fixed deposit, recurring deposit), safe custody articles, and safe deposit lockers. It is not available for accounts held in the name of companies, trusts, societies, or other institutions — only individual account holders can nominate. Joint accounts can also have a nominee, whose right arises after the death of all joint holders (or the survivor, in E or S accounts).
Can a minor be nominated as a bank nominee?
Yes, a minor can be nominated. However, since a minor cannot legally receive and manage funds, the depositor must also appoint a guardian who will receive the money on behalf of the minor nominee if the depositor dies while the nominee is still a minor. Once the nominee attains majority, they can directly receive the proceeds.
What happens to a nomination on a fixed deposit when it is renewed?
A nomination made on a term deposit (fixed deposit) continues in force automatically on renewal — there is no need to make a fresh nomination each time the FD is renewed. The nomination lapses only if the depositor specifically cancels it or changes it to a new nominee. The depositor has the right to change the nominee any number of times during the currency of the deposit.
