Nomination for Bank Accounts

Of late, there is substantial increase in number of death claim applications for Deposit Accounts held
in the name of deceased without any nomination. It shows that many of the deposit accounts in our
branches are maintained without nomination especially in case of Old Accounts. Lack of awareness
among Depositors about the benefits and availability of Nomination for Deposit Accounts/ Safe
Deposit Lockers is sole reason for existence of many deposit accounts without nomination in our
branches. Claim procedure in respect of Deposit Accounts without nomination involves a lot of paper
works, a tedious process of obtaining legal-heir certificates or succession certificate etc. Even for
Branches, the work involved in handling Death Claim without nomination is more time consuming
than Death Claim with nomination.


Nomination is a facility provided to depositors of Bank. If a depositor opts for nomination facility for
his/her deposit, it will be very easy for legal heirs to claim the deposit amount in the event of the
unfortunate death of the depositor. Wherever nomination is there, the process of settling the claim in
favor of the nominee (who was authorized by the deceased depositor to receive the deposit from the
bank) is very simple and painless.

However, if the depositor dies without any nomination for the deposit, the legal heirs will have to
either bring a succession certificate from a court or legal heir certificate issued by appropriate
authority to claim the money from the bank

In view of the above, all depositors have to be suggested on utilizing the Nomination Facility in their
own interest. To use the nomination facility, depositors have to be advised to fill in a form to be
provided by us and then submit it to the branch. The branch needs to register the name of the
nominee in our records (in Finacle System) and give an acknowledgement to the depositor for having
registered the nomination as per the depositors requirement.

All banks in India are governed by provisions of the Banking Regulation Act of 1949 and The Banking
Companies (Nomination) Rules, 1985. The Nomination Rules of 1985 were framed by the
Government of India in consultation with the Reserve Bank of India.

Reserve Bank of India has been, time and again, sensitizing banks about the importance of
Nomination Facility and has been advising banks to give wide publicity to Nomination Facility and
provide guidance to the depositors new as well as existing.

We attach FAQ on Nomination Facilities for the benefit of branches vide Annexure -!.

Direction to the Branches:

Branches should ensure that all new accounts/ deposits are opened with nomination by
explaining the benefits of nomination the Customers/Depositors. In case, the Customer
expresses his/her unwillingness to nominate any one, the branch should obtain signature of
the depositor in the column Nomination not required without fail.
FREQUENTLY ASKED QUESTIONS ON NOMINATION FACILITY
NOMINATION RULES FOR BANK DEPOSIT ACCOUNTS:

1. What is a nomination?

Nomination is a facility extended to depositors to nominate an individual who can claim the deposit
proceeds in the event of the unfortunate death of the depositor.

2. Whether nomination facility can be extended to deposits held by a bank by several types of
depositors?
No. As per the nomination rules, the nomination facility is extended only to deposits held by individual
depositors and not to deposits held by others like, companies, associations, partnerships,
government agencies, societies, HUF, etc.

However, nomination facility can be extended to all types of deposits, like, savings bank account,
current account, fixed deposit accounts, MKD deposits, recurring deposits, etc, held by individual
depositors in their individual capacity.

3. Whether nomination facility can be extended to deposits held by a bank in the name of a sole
proprietary concern?
Yes. Nomination facility can be extended to deposits held by a sole proprietary concern.
4. Who can nominate?

The nomination can be made by the depositor. In case of joint accounts, all the depositors have to
sign in the prescribed nomination form to make a nomination.

A nomination may be made only in respect of a deposit account which is held in the individual
capacity of the depositor, and not in any representative capacity such as the holder of an office like
director of a company, secretary of an association, partner of a firm, or karta of an HUF.

5. Whether a nomination can be made in respect of a deposit held by a minor?

Yes. In case of a deposit made in the name of a minor, the nomination shall be made by a person
lawfully entitled to act on behalf of the minor.

6. Who can be a nominee?

A nomination shall be made in favor of only one individual. As per nomination rules, any nomination
other than in favor of a single individual will not be valid. Nomination cannot be made in favor of an
association, trust, society or any other organization or any office bearer thereof in his/her official
capacity.


7. Whether a minor can be a nominee?

Yes. Where the nominee is a minor, the depositor or, as the case may be, all the depositors together,
may while making the nomination, appoint another individual, not being a minor, to receive the
amount of the deposit on behalf of the nominee, in the event of the death of the depositor or, as the
case may be, all the depositors, during the minority of the nominee.

8. Whether a nomination can be cancelled?

Yes. The cancellation of a nomination is to be made by the depositor or all the depositors as the case
may be, in the prescribed form.

9. Whether a variation of nomination is permitted?

Yes. A variation of the nomination (cancellation of existing nomination and making of fresh
nomination) can be made by the depositor or all the depositors as the case may be, in the prescribed
form.

10. Whether the bank has to give an acknowledgement to the depositor(s) after making a
nomination?

Yes. An acknowledgement has to be given, in writing, to the depositor(s) concerned irrespective of
whether the same is demanded by the depositor(s). Acknowledgement has to be given in case of
cancellation and variation also. This is mandatory as per RBI.

11. Is it necessary that all nominations and cancellation/variation of nominations are required to be
witnessed?

No. As per a clarification given by Reserve Bank of India, vide their notification dated 30.03.2011, the
signatures of the depositor(s) in forms DA1, DA2 and DA3 need not be attested by any witness.
However, as per the nomination rules, banks are required to take signatures of two witnesses in case
of illiterate depositor(s) who give their thumb impression(s) in the prescribed nomination forms.

12. Whether a nomination is compulsory?

Nomination should be a rule (rather than an exception) and the bank shall make necessary efforts to
cover all accounts, existing as well as new, with the facility of nomination exception being the ones
where the depositor himself/herself would prefer not to nominate, a separate letter shall invariably be
given by the depositor to the bank stating that he/she is not willing to nominate any person to the
deposit account.

As per RBI guidelines, banks have to give wide publicity to the nomination facility and persuade
depositors to avail the nomination facility. RBI has advised banks to insist that the person opening a
deposit account makes a nomination. In case the person opening an account declines to fill in
nomination, banks should explain the advantages of nomination facility. If the person opening the
account still does not want to nominate, banks should ask him/her to give a specific letter to the
effect. In case the person declines to give such a letter, banks should record the fact on the account
opening form and proceed with opening of the account if otherwise found eligible. Under no
circumstances, banks should refuse to open an account solely on the ground that the person opening
the account refused to nominate.

13. What are the procedures to be followed by the nominee while claiming the amount from the bank
after the death of the depositor?

The nominee authorized by the deceased depositor has to approach the bank where the money was
deposited.

The nominee has to make a claim to the monies and submit a claim form (which will be provided by
us) to the bank.

The nominee has to submit a death certificate issued by the competent authority to the bank.

The nominee has to identify himself/herself to the bank and may have to satisfy the bank as per the
existing Know-your-customer (KYC) guidelines and provide a proof of his/her identify to the bank.

After submitting death certificate, claim from and proof of identify as per KYC norms, the banks
usually settle the claim in favour of the nominee in a matter of as early as possible.

14. What are the benefits of Nomination facility to depositors/claimants?

The depositor will be sure that the monies/articles left by him/her will go to the person(s) as desired
by him/her provided the depositor has submitted a valid nomination to the Bank before his/her death.

In the event of unfortunate death of the depositor, the nominee can get the monies deposited with the
Bank very easily and in a quick manner where nomination is available. Settlement of claims on the
basis of Indemnity/Affidavit or Succession Certificate is very expensive, lengthy and burdensome
both to the Bank as well to the claimants.

15. What are the benefits of Nomination facility to banks?

It is easy to settle a claim in favor of nominee in the event of unfortunate death of the
depositor/locker hirer.

Bank wins the trust and confidence of the customers when customers are apprised of the benefits of
nomination. The increased confidence will bring repeat business to the Bank. Banks image also goes
up with the public as nomination facility is in public interest.

Good compliance with the RBI regulations enhances the credibility of the Bank in the eyes of the
regulators.

16. Whether banks can enter the name of the nominee in pass books/deposit receipts?

Yes. The name of the nominee may be entered by banks in Savings Bank pass books or the fixed
deposit receipts, etc, only with the specific written mandate of the depositor, that is, in case the
depositor is agreeable to the same.

Reserve Bank of India has advised banks to record on the face of the pass books or fixed deposit
receipts, the position regarding the availment of nomination facility with the legend NOMINATION
REGISTERED.

17. What are the nomination forms available in case of deposit accounts?

DA 1 appointment of nomination

DA 2 cancellation of nomination

DA 3 variation of nomination

These three are standard formats for bank deposit accounts.

18. What are the statutes that provide nomination facility to bank depositors?

The Banking Regulation Act, 1949; and

The Banking Companies (Nomination) Rules, 1985 framed by the Government of India

Commercial banks in India are guided by the above two statutes in respect of nomination facility to
bank deposits, safe deposit lockers and articles in safe custody.