The Ministry of Finance has confirmed that the key provisions related to nominations under the Banking Laws (Amendment) Act, 2025, will officially come into force on November 1, 2025. These provisions pertain to nomination facilities for deposit accounts, articles held in safe custody, and safety lockers maintained with banks.
The Banking Laws (Amendment) Act, 2025, which was notified on April 15, 2025, introduces 19 amendments across five major legislations, including the Reserve Bank of India Act, 1934, the Banking Regulation Act, 1949, the State Bank of India Act, 1955, and both Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980.
According to a statement from the Ministry of Finance, the Act specifies that its provisions will come into force on November 1, 2025, as notified by the Central Government in the Official Gazette. This phased implementation will ensure smooth integration of the new provisions into the banking system.
One of the key updates in these provisions is the expansion of nomination options. Under the new rules, depositors can now nominate up to four individuals for their accounts, either simultaneously or successively. This change aims to simplify the claim settlement process for nominees and provide more flexibility for depositors. Furthermore, depositors can specify the percentage of entitlement for each nominee, ensuring that the total percentage adds up to 100%.
For articles in safe custody and safety lockers, the rules will only allow successive nominations, ensuring a clear process for succession in the event of a depositor’s death.
These new provisions are designed to bring greater transparency, uniformity, and efficiency in handling nomination-related matters across all banks. By ensuring clarity in succession and distribution, the updated system seeks to reduce disputes among nominees. The government also plans to issue the Banking Companies (Nomination) Rules, 2025, which will outline the procedures, prescribed forms, and guidelines for making, cancelling, or modifying nominations.
The broader Banking Laws (Amendment) Act, 2025 aims to strengthen governance within the banking sector, improve audit quality, ensure uniform reporting to the Reserve Bank of India, and enhance depositor and investor protection. The Act also rationalises the tenure of directors (other than the Chairman and whole-time directors) in cooperative banks.
