RBI Pushes for Mandatory Nomination to Ease Claim Settlement in Banks and NBFCs

Vide a Press Release No: RBI/2024-25/104; Ref. No. DoS. CO. PPG / SEC. 13/11.01.005 / 2024-25 Mr. Tarun Singh, Chief General Manager of the Reserve Bank of India has issued governance pertinent to the Coverage of Customers under the nomination facility.

Nomination facility is intended to minimise the hardship and facilitate expeditious settlement of claims of the family members on the death of depositor/s. Instructions pertinent to nomination facility for Scheduled Commercial Banks (SCBs) (Excluding RRBs), Primary (Urban) Co-operative Banks (UCBs) and Deposit taking NBFCs have been incorporated in the following respectively:

• Master Circular on “Customer Service in Banks”,
• Master Circular on “Customer Service – UCBs”,
• Master Direction on “Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016.

The extant instructions also mandate the banks to extend wide publicity along with providing guidance to the depositing account holders on the benefits of the nomination facility.

However, as per the Reserve Bank’s supervisory assessment, it is observed that in a large number of deposit accounts, nomination is not available. To avoid inconvenience and undue hardship to survivors / family members of deceased depositors, the need to obtain nomination in case of all existing and new customers having deposit accounts, safe custody articles and safety lockers, as the case may be is reiterated.

The Customer Service Committee (CSC) of the Board / Board of Directors shall review, on a periodic basis, the achievement of nomination coverage. Progress in this regard shall be reported by the Supervised Entities (SE’s) in Reserve Bank’s DAKSH portal on a quarterly basis starting from March 31, 2025.  

Further, the frontline staff in the branches may be suitably sensitised for obtaining nomination as well as appropriate handling of claims of deceased constituents and dealing with nominees/ legal heirs. The Account Opening Forms may be modified suitably (if not already done) with provision for the customers to avail or opt out of nomination facility.

Apart from directly notifying the customers, the Supervised Entities (SE’s) are advised to publicise the benefits of using the nomination facility through various media, including launching of periodical drives towards achieving a full coverage of all eligible customer accounts.

Courtesy: Reserve Bank of India

Team Maverick