SUCCESSION & FAMILY / FOR INDIVIDUALS

Up to four nominees on a bank account: what the 2025 amendment changes, and why a nominee is not always the heir

Since 1 November 2025 you can name up to four nominees on a bank deposit, but the nominee's right to receive the money is not the same as a right to keep it.

By Adv. Gurleen KaurPublished 29 October 2026Law stated as at 29 October 2026

Many account holders named a single nominee years ago and never looked again. The law changed on 1 November 2025. This note explains what changed, and why naming a nominee is not the same as deciding who inherits.

What changed, and from when

The Banking Laws (Amendment) Act, 2025 (Act No. 16 of 2025) received assent and was published in the Gazette of India on 15 April 2025. It came into force in parts. By notification S.O. 4789(E) dated 22 October 2025, the Central Government brought sections 10, 11, 12 and 13 of the Act, which deal with nomination, into force from 1 November 2025 (Ministry of Finance, PIB release dated 23 October 2025).

These four sections amend the Banking Regulation Act, 1949:

Section 10 amends section 45ZA (deposits). Where the law earlier allowed a depositor to nominate "one person", it now allows "one or more persons not exceeding four, either successively or simultaneously". It also inserts new sub-sections (1A) and (1B).
Section 11 amends section 45ZC(1) (articles kept in safe custody), allowing up to four nominees, successively only.
Section 12 substitutes section 45ZE(1) (safety lockers), allowing one or more hirers to nominate up to four persons, successively only, to access the locker and remove its contents.
Section 13 inserts a new section 45ZG, which sets the order of priority for successive nominees.

The procedure and forms are in the Banking Companies (Nomination) Rules, 2025 (G.S.R. 790(E), 27 October 2025, in force from 1 November 2025), which replace the 1985 Rules for banking companies and co-operative banks. The Reserve Bank of India has also issued the Reserve Bank of India (Nomination Facility in Deposit Accounts, Safe Deposit Lockers and Articles kept in Safe Custody with the Banks) Directions, 2025 (RBI/2025-26/95, dated 28 October 2025), effective from the same date.

Simultaneous and successive nomination

Feature	Simultaneous	Successive
Available for	Deposit accounts only	Deposits, lockers and safe custody articles
How it works	All nominees share the deposit in the percentages you state	Only one nominee at a time; the next in line steps in only if those above have died
Key condition	Each nominee's percentage must be stated and the shares must cover the whole deposit	If no order is stated, the order in which the names appear is the priority

Simultaneous (deposits only)

Under new section 45ZA(1B), a simultaneous nomination must state explicitly the percentage of the deposit in favour of each nominee, must cover the whole deposit, and cannot name more than four persons. A nomination that does not meet these conditions is invalid. The prescribed form requires that the percentages across all nominees total 100 per cent (Nomination Rules, 2025, Form). If a simultaneous nominee dies before receiving the money, the nomination lapses for that nominee's share alone, which is then settled as if there were no nomination for that portion (section 45ZA(1B)(d); RBI Nomination Directions, 2025).

Successive (deposits, lockers and safe custody)

Under new section 45ZA(1A) and section 45ZG(1), a successive nomination is effective only in favour of one person at a time, in order of priority. A lower-ranked nominee becomes entitled only after those ranked above have died. If you do not state the order, the names are treated as ranked in the order in which they appear (section 45ZG(2)). For lockers and safe custody articles, only successive nomination is permitted (sections 45ZC(1) and 45ZE(1), as amended; Rules 3 and 4).

Under Rule 2, nomination is available only for deposits held in an individual capacity; a later nomination replaces an earlier one; for a joint account, all depositors must join in any change; and renewing a deposit does not end the nomination. Banks must acknowledge a nomination or change within three working days (RBI Nomination Directions, 2025).

The nominee receives the money, but may not own it

Section 45ZA(2) says that on the death of the depositor, the nominee becomes entitled to all the rights of the depositor in relation to the deposit, to the exclusion of others. Section 45ZA(4) says that payment to the nominee is a full discharge of the bank's liability, while preserving the rights of others against the person who receives the payment. The 2025 Act did not alter sub-sections (2) or (4).

The Supreme Court has read this provision narrowly. In Ram Chander Talwar v. Devender Kumar Talwar, (2010) 10 SCC 671 (decided 6 October 2010), it held that section 45ZA(2) "by no stretch of imagination makes the nominee the owner of the money lying in the account". The money forms part of the estate of the deceased depositor and passes under the law of succession that governs the depositor.

This follows a consistent line. In Sarbati Devi v. Usha Devi, (1984) 1 SCC 424, the Court held that a nomination under section 39 of the Insurance Act, 1938 "does not have the effect of conferring on the nominee any beneficial interest"; the heirs may claim the amount under their law of succession. In Shakti Yezdani v. Jayanand Jayant Salgaonkar, 2023 INSC 1076 (decided 14 December 2023), the Court held that a nominee of shares under the Companies Act, 1956 and the depository bye-laws "would not get an absolute title", and that there is "no third mode of succession". The Court relied on both earlier decisions.

Two cautions. First, these judgments were delivered before the 2025 amendment. Because the amendment leaves section 45ZA(2) and (4) unchanged, the reasoning in Ram Chander Talwar appears to continue to apply, but the amended provisions should be read with these decisions until the Supreme Court considers them directly. Second, life insurance follows its own statute. Section 39(7) of the Insurance Act, 1938, as substituted in 2015, provides that where the holder of a policy on his own life nominates a parent, spouse or child, the nominee is "beneficially entitled" to the amount payable, unless it is proved that the policyholder could not have conferred that title. Whether this displaces the heirs' rights under succession law is unsettled. In Smt. Kusum v. Anand Kumar, 2025:AHC-LKO:24631 (decided 30 April 2025), the Allahabad High Court (Lucknow Bench) held that it does not: even a beneficial nominee is not the owner of the policy money. The Court granted a certificate for appeal to the Supreme Court. Until the Supreme Court decides the question, neither nominees nor heirs should treat the insurance position as settled.

Why a will still matters

A nomination tells the bank whom to pay. A will tells everyone who is to own. Under section 59 of the Indian Succession Act, 1925, "every person of sound mind not being a minor may dispose of his property by will". A will may be revoked or altered at any time while the maker is competent (section 62), and a will, or any part of a will, caused by fraud or coercion, or by such importunity as takes away the testator's free agency, is void (section 61). An unprivileged will must be signed (or marked) by the testator and attested by two or more witnesses (section 63). These provisions do not apply to wills made by Muslims (section 58(1)); a Muslim's will is governed by Muslim personal law, which limits how much property may be left by will.

Registration of a will is optional, not compulsory (Registration Act, 1908, section 18(e)). A testator may also deposit a will in a sealed cover with a Registrar (section 42). A registered or deposited will is, however, easier to locate.

Where a nominee exists, the bank pays on a claim form, a death certificate and identity documents, without a succession certificate (RBI Settlement of Claims in respect of Deceased Customers Directions, 2025). That speed is the purpose of nomination. Who ultimately keeps the money is decided by the will or, without one, the succession law that applies to you.

A short checklist for reviewing your accounts

List every deposit, locker and safe custody arrangement, and check that passbooks and deposit receipts show "Nomination Registered".
For deposits, decide between simultaneous (shares adding up to 100 per cent) and successive (an order of priority).
For lockers and safe custody, remember that only successive nomination is available.
For joint accounts, note that all holders must sign any change.
If a nominee is a minor, name an adult to receive the money on the minor's behalf.
Make sure your will and your nominations point the same way, so that the nominee is not left holding money for someone else.
Keep each bank acknowledgement with your papers.

Author’s view

In my experience, most families do not realise that a nominee on a bank account in effect holds the money for those entitled to it under the Will or, if there is no Will, the legal heirs. The confusion usually arises because the nominee is also one of the heirs, and assumes that everything in the account now belongs to him or her. That assumption is often where a family dispute begins.

For deposits, I would advise simultaneous nomination. Stating each person's share in writing gives every nominee clarity from the start. The Will should then say the same thing, so that the nomination and the inheritance point the same way.

Registration of a Will is optional, but I would advise it. Where an estate is large, disputes within Indian families have become common, whatever the reasons behind them. A registered Will, made known to the family in good time, protects what a person has built and the future of those who come after.

Adv. Gurleen Kaur

Primary sources

Succession & family ↗

Up to four nominees on a bank account: what the 2025 amendment changes, and why a nominee is not always the heir

What changed, and from when

Simultaneous and successive nomination

Simultaneous (deposits only)

Successive (deposits, lockers and safe custody)

The nominee receives the money, but may not own it

Why a will still matters

A short checklist for reviewing your accounts

Author’s view

Primary sources

A note about
this website.

You have chosen
not to enter.

Up to four nominees on a bank account: what the 2025 amendment changes, and why a nominee is not always the heir

What changed, and from when

Simultaneous and successive nomination

Simultaneous (deposits only)

Successive (deposits, lockers and safe custody)

The nominee receives the money, but may not own it

Why a will still matters

A short checklist for reviewing your accounts

Author’s view

Primary sources

You have chosennot to enter.

You have chosen
not to enter.