Bank Nominee Rules 2025: Under the Kingfisher Law (Amendment) Act, 2025, the term of directors has been increased to 10 years. Customers will now be able to add up to four nominees to their accounts. This will increase transparency and efficiency in claims settlement…
Bank Nominee Rules 2025: Bank customers will now be able to nominate up to four individuals in their accounts. The aim is to make the claims settlement process in the banking system more transparent, equitable, and effective. The Finance Ministry said in a statement on Thursday that the new system will come into effect from November 1, 2025.
The ministry said that key provisions related to nomination of individuals in accounts under the Banking Laws (Amendment) Act, 2025, will come into effect from next month. This Act was notified on April 15, 2025. Under this, a total of 19 amendments have been made in five laws, including the Reserve Bank of India Act, 1934; the Banking Regulation Act, 1949; the State Bank of India Act, 1955; and the Banking Companies (Acquisition and Transfer of Undertakings) Acts, 1970 and 1980.
Four individuals can become nominees
According to the Finance Ministry, these amendments allow bank customers to nominate up to four individuals simultaneously or sequentially for their accounts. This will facilitate claim settlement for account holders or their legal heirs. The Ministry stated that to bring transparency to the account nomination process, customers will also be able to specify the share or percentage of each nominee, ensuring a 100% share and eliminating any potential disputes.
Option to Set Share
Only sequential nomination is permitted for bank safes and lockers. This means that upon the demise of one nominee, the next nominee will inherit the rights. The Ministry stated that these provisions will provide bank depositors with the flexibility to choose the nominee of their choice.
Nomination Rules Soon
This will also ensure equality, transparency, and efficiency in claims settlement across the banking system. The Banking Companies (Nomination) Rules, 2025, will also be notified in the near future. These will detail the process for nomination, cancellation, or multiple nominations, and the documents required for the same. The government had earlier stated in a notification dated July 29, 2025, that certain sections of the Act (Sections 3, 4, 5, 15, 16, 17, 18, 19, and 20) have come into effect from August 1.
The Banking Laws (Amendment) Act, 2025 aims to strengthen operational standards in the banking sector, unify bank reporting systems, enhance depositor and investor protection, improve audit quality in public sector banks, and enhance customer convenience.
The Act also rationalized the tenure of directors of cooperative banks. The maximum tenure for directors, except for the chairman and whole-time directors, has now been increased to 10 years, up from eight years previously.
Furthermore, under recent amendments, public sector banks will now be able to transfer undisclosed or unrealized share, interest, and bond payments to the Investor Education and Protection Fund (IEPF), bringing them in line with the provisions of the Companies Act. The government has also revised the threshold for a “significant stake” for the first time since 1968, raising it from ₹5 lakh to ₹2 crore.
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