The Ministry of Finance has confirmed that the key nomination-related provisions under the Banking Laws (Amendment) Act, 2025, will officially come into
force on November 1, 2025. These provisions apply to nomination facilities for deposit accounts, articles held in safe custody, and safety lockers maintained with banks. The Banking Laws (Amendment) Act, 2025, notified on April 15, 2025, introduces 19 amendments across five major legislations: the Reserve Bank of India Act, 1934, Banking Regulation Act, 1949, State Bank of India Act, 1955, and both Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980. According to the Finance Ministry’s statement, the Act stipulates that its provisions “shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint,” allowing flexibility for phased implementation. Consequently, Sections 10, 11, 12, and 13 of the Act will become effective from November 1, 2025, as per the latest government notification. Depositors Can Now Nominate Up to Four Individuals One of the most notable updates in the new provisions is the expansion of nomination options for customers. Depositors will now be able to nominate up to four individuals, either simultaneously or successively. This move aims to simplify claim settlements for nominees and enhance flexibility for depositors. Depositors can also specify the percentage of entitlement for each nominee, ensuring that the total adds up to 100%. For articles in safe custody and safety lockers, only successive nominations will be allowed. This ensures a clear and continuous process for claims in the event of a depositor’s demise. Enhancing Transparency and Customer Convenience These upcoming rules are designed to offer greater transparency, uniformity, and efficiency in handling nomination-related matters across all banks. The new system will also prevent disputes by ensuring clarity of succession and distribution. To operationalise these changes, the government will soon issue the Banking Companies (Nomination) Rules, 2025, which will define the procedures and prescribed forms 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. It also rationalises the tenure of directors—other than the Chairman and whole-time directors—in cooperative banks.
