New Delhi: The Ministry of Finance stated on Thursday that bank clients would be able to name up to four people in their accounts under the Banking Laws (Amendment) Act, 2025. This is a big change that will make things easier for customers and make things more clear.
Starting on November 1, 2025, the most important parts of the multiple nominations rules will go into force. This will change the way banks manage claim settlements and depositor nominations.
Important Parts of the New Rules for Nominations
The Finance Ministry says that the new rules are meant to make sure that claims are settled in the same way, with full transparency, and quickly across the financial sector.
1. Multiple Nominations: Customers can now nominate up to four people at the same time or one after the other. This makes it easier for depositors and their heirs to file claims.
2. Simultaneous Nomination: Depositors can give each nominee a certain proportion of the total, as long as the total equals 100%. This makes sure that all nominees get their fair share.
3. Successive Nomination: If you want a step-by-step nomination, the next nominee will only take effect when the person above them on the list dies. This makes it clear how the succession will work and how claims will be settled.
4. Safe Custody and Lockers: Only subsequent nominations will be allowed for items in safe custody or bank lockers. This will make sure that ownership is transferred safely and in an orderly way.
The ministry said
“These rules will allow depositors to make nominations as they see fit, while also making sure that the banking system settles claims in a consistent, open, and quick way.”
The Banking Companies (Nomination) Rules, 2025, which will explain how to make, cancel, or specify multiple nominations, will be published soon to put these rules into action.
The Banking Laws (Amendment) Act, 2025’s Scope
On April 15, 2025, the Banking Laws (Amendment) Act, 2025, was made public. It makes 19 changes to five laws, including:
The 1934 Reserve Bank of India Act
The 1949 Banking Regulation Act
The 1955 State Bank of India Act
The Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980
The federal government had put a number of parts of the Act into effect on August 1, 2025, through Gazette Notification S.O. 3494(E) on July 29, 2025.
The Act Made Big Changes
The changes made in 2025 are meant to improve audit and reporting methods, make governance standards in the banking sector stronger, and better safeguard depositors. Some of the most important modifications are:
The Investor Education and Protection Fund (IEPF) now allows public sector banks (PSBs) to send unclaimed shares, interest, and bond redemption proceeds to the IEPF. This is in line with the Companies Act.
Auditor Pay: Banks can now choose the pay for statutory auditors, which means they can hire better auditors and make sure that audits are of a higher caliber.
The new maximum for “substantial interest” is ₹2 crore, up from ₹5 lakh. This is the first change to the rule since 1968.
Cooperative Bank Governance: The maximum period that directors can serve on the board of a cooperative bank has been raised from 8 years to 10 years, in line with the 97th Constitutional Amendment. This does not apply to the chairperson or full-time directors.
The Finance Ministry said that the new law’s goal is to “bring the banking regulatory framework up to date and make it more in line with changing financial practices and customer needs.”
Banking Laws Amendment Act 2025: Customers Can Now Nominate Up To Four Persons In Bank Accounts From November 1
