Key nomination provisions under Banking Laws (Amendment) Act, 2025 to take effect from November 1
The key provisions relating to nomination under the Banking Laws (Amendment) Act, 2025 will come into effect from November 1, 2025, according to a notification issued by the Central Government.
The Banking Laws (Amendment) Act, 2025, notified on April 15, 2025, introduced a total of 19 amendments across five major legislations – the Reserve Bank of India Act, 1934, Banking Regulation Act, 1949, State Bank of India Act, 1955, and the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980.
As per the latest notification, the provisions contained in Sections 10, 11, 12 and 13 of the Amendment Act – which deal with nomination facilities for deposit accounts, articles kept in safe custody, and safety lockers – will come into force on November 1, 2025.
Key Features of the Nomination Provisions
The new provisions are designed to give depositors greater flexibility and transparency in managing their nominations:
* Multiple Nominations: Customers can nominate up to four persons, either simultaneously or successively, to simplify claim settlements.
* Deposit Accounts: Depositors can choose between simultaneous or successive nominations.
* Safe Custody and Lockers: For these facilities, only successive nominations are allowed.
* Simultaneous Nomination: Depositors may assign up to four nominees and specify the percentage share of entitlement for each, ensuring the total equals 100 per cent.
* Successive Nomination: Up to four nominees can be listed in order of priority; the next nominee becomes operative only upon the death of the previous one, ensuring clarity in succession.
The implementation of these provisions is expected to enhance flexibility, uniformity, transparency, and efficiency in claim settlement across the banking system.
The government also announced that the Banking Companies (Nomination) Rules, 2025, outlining procedures and prescribed forms for making, cancelling, or updating multiple nominations, will be published shortly to operationalise the new framework across all banks.
Earlier, the government had brought into force certain other provisions of the Amendment Act – including Sections 3, 4, 5, 15, 16, 17, 18, 19, and 20 – effective August 1, 2025, via Gazette Notification S.O. 3494(E) dated July 29, 2025.
The Banking Laws (Amendment) Act, 2025 seeks to strengthen governance standards in the banking sector, enhance depositor and investor protection, improve audit quality in public sector banks, and promote customer convenience through updated nomination facilities. It also rationalises the tenure of directors, excluding the Chairman and whole-time directors, in co-operative banks.
