Nomination in Bank Accounts

What Is Nomination in a Bank Account?

Nomination allows you to name one or more persons who can receive the money in your bank deposit after your death.

It helps the bank identify the person to whom payment can be made after completing the required formalities. When the bank makes payment to the nominee in accordance with the applicable nomination provisions, the bank is discharged from its liability for the amount so paid.

Nomination does not give the nominee control over your account while you are alive. You continue to operate and control your account and can change or cancel the nomination as permitted.

Important — Nominee and Legal Heir Are Not the Same

Payment to the nominee settles the bank’s liability, but it does not necessarily make the nominee the ultimate beneficial owner of the money. The rights of legal heirs or successors are not extinguished merely because the bank has paid the nominee.

In this sense, the nominee is commonly described as holding the money as a trustee for the legal heirs.

We explain Nominee vs Legal Heir in more detail below.

Why Should I Add a Nominee?

The main practical benefit is a simpler claim process after the depositor’s death, where a valid nomination is registered with the bank.

In a typical nominee claim, the nominee approaches the bank and submits the required documents. These commonly include:

Death Certificate Death certificate of the deceased depositor.

Nominee’s KYC KYC or identity documents of the nominee as required by the bank.

Claim Form The bank’s prescribed deceased-depositor / nominee claim form, duly completed.

Depending on the circumstances, the bank may also ask for other information or documents reasonably required for processing the claim.

After completing the required verification and claim formalities, the bank processes payment of the eligible deposit to the nominee.

Why nomination matters: Where a valid nomination is registered, the bank already has an identified person to whom the deposit can be paid after the depositor’s death, subject to the required verification and claim formalities.

How Many Nominees Can I Have?

For a bank deposit, you can now nominate up to four persons. The nomination may be made either simultaneously or successively.

Simultaneous Nomination

You can nominate more than one person to receive specified percentage shares of the deposit.

Example

Nominee A — 50%

Nominee B — 30%

Nominee C — 20%

The percentages specified for the nominees must together cover the entire deposit.

Successive Nomination

You can instead nominate persons in an order of priority.

Example

First nominee — A

If A does not survive — B

If B also does not survive — C

The nomination operates according to the specified order of priority.

What about lockers? The rule is different. A locker can also have up to four nominees, but locker nominations are successive, not simultaneous. See the dedicated Locker Nomination section later in this guide.

How Do I Add a Nominee?

At the Time of Opening the Account

You can provide nomination details while opening the account through the bank’s prescribed nomination process.

For an Existing Account

If the account is already open, you can still register a nomination. Approach your bank and use its prescribed process for adding the nomination.

Check That It Has Been Registered

After submitting the nomination, keep the acknowledgement and check that the nomination has actually been recorded in the bank’s records.

Already have an old account? Do not assume that a nomination was registered when the account was opened. Check your account records or ask your bank whether a nomination is currently registered.

Can I Change or Cancel My Nomination?

Yes. A nomination is not permanent.

You can cancel or vary a nomination during the period for which the deposit is held with the bank, using the prescribed process.

You may want to review your nomination after a change in family circumstances, death of an existing nominee, or simply because you want to nominate someone else.

BankBodh Tip: After adding, changing or cancelling a nomination, keep the bank’s acknowledgement and check that the change has actually been recorded.

What Happens to Nomination in a Joint Account?

A joint deposit account — such as Either or Survivor, Former or Survivor, or Anyone or Survivor — can have a nomination, but there is one very important rule to remember.

The nominee’s right arises only after the death of all the joint depositors.

If one joint account holder dies while another account holder survives, the nominee does not step in merely because one depositor has died.

The rights of the surviving account holder and operation of the account will depend on the account mandate and the applicable banking rules.

Simple Example

Account holders: A + B
Operating instruction: Either or Survivor
Nominee: C

A dies

↓

B survives
C does not yet claim merely as nominee.

↓

Later, B also dies

↓

The nomination becomes relevant and C can claim as nominee.

Survivor and Nominee Are Different

Survivor An existing joint account holder whose position is governed by the joint account arrangement and the applicable operating or survivorship mandate.

Nominee A person nominated in relation to the deposit. In a joint deposit, the nominee’s right arises after all the depositors have died.

What about joint lockers? The position can be different for jointly hired lockers. Depending on the locker arrangement and nomination, a nominee may have a role even when another joint hirer survives. See the Locker Nomination section below for the detailed rules.

Can a Minor Be a Nominee?

Yes. You can nominate a minor, such as your child, as a nominee.

If You Choose a Minor as Nominee

A minor cannot normally receive and deal with the deposit independently. Therefore, when making the nomination, you should also provide the details of an adult person who can receive the money on behalf of the minor nominee if you die while the nominee is still a minor.

This adult is appointed for the purpose of receiving the deposit on behalf of the minor nominee. The adult does not become the nominee merely because of this appointment.

Name the Minor as Your Nominee

Provide the minor’s required details in the bank’s prescribed nomination process.

Appoint an Adult to Receive the Money on the Minor’s Behalf

Provide the details of the adult who can receive the deposit on behalf of the minor if you die while the nominee is still a minor.

Keep the Nomination Updated

Review the nomination if your circumstances change and check that the nomination and related details are correctly recorded by the bank.

Simple example: You nominate your 10-year-old daughter as your nominee and appoint another adult to receive the deposit on her behalf if you die while she is still a minor. The daughter remains the nominee; the appointed adult is there to receive the money on behalf of the minor in the circumstances provided under the nomination rules.

Nominee vs Legal Heir — Who Actually Owns the Money?

This is one of the most commonly misunderstood aspects of bank nomination.

Nominee ≠ Necessarily the Ultimate Owner

The bank can settle the eligible claim with the nominee in accordance with the nomination provisions. Payment to the nominee can discharge the bank’s liability in respect of the deposit.

However, payment by the bank does not by itself extinguish any right or claim that another person may have against the person who receives the money.

This is why a nominee is commonly described as receiving or holding the money as a trustee for the legal heirs, subject to the applicable succession law and circumstances.

From the Bank’s Perspective

Nomination identifies the person to whom the bank can make payment after the death of the depositor(s), subject to the applicable requirements.

From the Succession Perspective

The ultimate rights in the deceased person’s estate are a separate matter and may depend on the applicable succession law, testamentary documents and the circumstances of the case.

In simple terms: Nomination helps the bank decide whom it can pay. It does not necessarily decide who ultimately inherits the money.

Nomination in Bank Lockers

Nomination is important not only for bank deposits but also for safe deposit lockers. It helps the bank determine who can be given access to the locker after the death of a locker hirer, subject to the applicable rules and verification.

Sole Locker

If you are the sole hirer of a locker, you can register a nominee. After your death, the bank can give the nominee access to the locker and permit removal of its contents after completing the required verification and inventory formalities.

Joint Locker

Joint lockers need special attention because the result depends on the operating instructions given to the bank.

If a jointly hired locker is to be operated under joint signatures and a locker hirer dies, access may be given jointly to the surviving hirer(s) and the nominee(s), after completing the prescribed formalities.

Where the locker has a survivorship instruction such as Either or Survivor, Anyone or Survivor or Former or Survivor, the bank follows the applicable survivorship mandate after the death of a locker hirer.

Joint Deposit and Joint Locker — Don’t Apply the Same Rule

In a joint deposit account, the nominee’s right generally arises after the death of all the depositors.

A joint locker works differently. Depending on the locker mandate, the surviving hirer(s) and nominee(s) may have a role after the death of one of the locker hirers.

Inventory of Locker Contents

Before the contents of a deceased customer’s locker are removed, the bank prepares an inventory of the locker contents in the prescribed manner.

This is an important difference between receiving money from a deposit account and obtaining access to the contents of a locker.

Can a Minor Be a Locker Nominee?

Yes. A minor can be a nominee for a locker.

If the locker contents have to be released while the nominee is still a minor, the bank must ensure that the articles are handed over to a person who is legally competent to receive them on behalf of the minor.

Nominee Does Not Automatically Become Owner of the Locker Contents

Giving access to the nominee or survivor does not by itself decide the ultimate ownership of jewellery, documents or other articles kept in the locker.

The nominee or survivor receives access as a trustee for the legal heirs, and the rights or claims that another person may have over the contents are not extinguished.

Practical tip: If you have a bank locker, check not only whether a nominee has been registered but also the operating / survivorship instructions recorded for a joint locker. These can affect how access is given after the death of a locker hirer.

After the death of a locker hirer: The actual procedure for obtaining access, documents required, preparation of inventory and claims where there is no nomination are covered separately in our Deceased Customer Claim guide.

Official RBI reference: RBI — Safe Deposit Locker / Safe Custody Article Directions

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