Finance Minister Nirmala Sitharaman has introduced the Banking Laws (Amendment) Bill, 2024, which proposes to increase the number of nominees allowed per bank account and locker from one to four. The current Banking Regulation Act permits single or joint deposit holders to appoint a nominee for their deposit, items left in the custody of a bank, or a locker hired from a bank.In the event of the nominator’s death, the nominee can access the deposit, articles, or locker.
According to an ET report, the new Bill suggests allowing up to four nominees for these purposes. For deposits, nominees can be appointed either successively or simultaneously, while for other purposes, they can only be appointed successively.
When there are multiple simultaneous nominees, the nomination will be effective in a predetermined proportion. In the case of successive nominations, priority will be given to the nominee named higher in the nomination order.
“The Banking Regulation Act allows single or joint deposit holders to appoint a nominee for their deposit. Such a nominee can also be appointed for items left in custody of a bank or for a locker hired from a bank. The nominee can access the deposit, articles, or locker in case of death of the person who nominated him. The Bill allows the appointment of up to four nominees for these purposes. For deposits, such nominees can be appointed either successively or simultaneously while for other purposes they can be appointed successively. In case of simultaneous nominees, the nomination will be effective in a declared proportion. For successive nomination, the nominee who has been named higher in the order of nomination will receive priority,” according to The Banking Laws (Amendment) Bill, 2024 quoted in the ET report.
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Nomination is a crucial aspect of opening lockers and savings accounts in India. The Indian Banks’ Association (IBA) says, “Banking Companies (Nomination) Rules 1985 permits banks to pay dues to nominees in the event of death of depositor(s) without asking for succession certificate or verifying claims of legal heirs. This simplifies settlement. Of course, as Trustee the nominee is accountable to legal heirs.
The IBA further clarifies that the nomination facility is available for bank deposits, safe deposit lockers, and safe custody articles. A single deposit account, whether held individually or jointly, can have only one nominee. However, a jointly held locker can have two nominees. In the case of a minor’s account, a person legally empowered to operate the account can file a nomination on behalf of the minor.
The State Bank of India emphasizes the importance of availing the benefits of nomination facility and survivorship clause for locker-hirers. In the unfortunate event of the death of one of the joint locker-hirers, the contents of the locker do not automatically transfer to the surviving joint locker-hirer or nominee(s) unless there is a survivorship clause or nomination in place.
When renting a locker, the bank charges a nominal annual rent based on the size of the locker and the location of the branch. The rent should be paid in advance for the financial year. The bank provides a copy of the signed Locker Agreement to the locker-hirer, outlining their rights and responsibilities.
According to an ET report, the new Bill suggests allowing up to four nominees for these purposes. For deposits, nominees can be appointed either successively or simultaneously, while for other purposes, they can only be appointed successively.
When there are multiple simultaneous nominees, the nomination will be effective in a predetermined proportion. In the case of successive nominations, priority will be given to the nominee named higher in the nomination order.
“The Banking Regulation Act allows single or joint deposit holders to appoint a nominee for their deposit. Such a nominee can also be appointed for items left in custody of a bank or for a locker hired from a bank. The nominee can access the deposit, articles, or locker in case of death of the person who nominated him. The Bill allows the appointment of up to four nominees for these purposes. For deposits, such nominees can be appointed either successively or simultaneously while for other purposes they can be appointed successively. In case of simultaneous nominees, the nomination will be effective in a declared proportion. For successive nomination, the nominee who has been named higher in the order of nomination will receive priority,” according to The Banking Laws (Amendment) Bill, 2024 quoted in the ET report.
Also Read | Latest FD rates: Which PSU banks are offering highest fixed deposit rates in August 2024? Check List
Nomination is a crucial aspect of opening lockers and savings accounts in India. The Indian Banks’ Association (IBA) says, “Banking Companies (Nomination) Rules 1985 permits banks to pay dues to nominees in the event of death of depositor(s) without asking for succession certificate or verifying claims of legal heirs. This simplifies settlement. Of course, as Trustee the nominee is accountable to legal heirs.
The IBA further clarifies that the nomination facility is available for bank deposits, safe deposit lockers, and safe custody articles. A single deposit account, whether held individually or jointly, can have only one nominee. However, a jointly held locker can have two nominees. In the case of a minor’s account, a person legally empowered to operate the account can file a nomination on behalf of the minor.
The State Bank of India emphasizes the importance of availing the benefits of nomination facility and survivorship clause for locker-hirers. In the unfortunate event of the death of one of the joint locker-hirers, the contents of the locker do not automatically transfer to the surviving joint locker-hirer or nominee(s) unless there is a survivorship clause or nomination in place.
When renting a locker, the bank charges a nominal annual rent based on the size of the locker and the location of the branch. The rent should be paid in advance for the financial year. The bank provides a copy of the signed Locker Agreement to the locker-hirer, outlining their rights and responsibilities.