On December 3, 2024, the Banking Laws (Amendment) Bill was approved by the Lok Sabha, enabling bank account holders to choose up to four nominees for their locker and savings accounts. Bank customers will benefit from the new amendment by being able to designate up to four candidates for their fixed deposits, recurring deposits, and bank accounts.
The Rajya Sabha must approve the new banking law before it can take effect. The president will provide an approval stating the change’s effective date when it has been approved by both houses of Parliament.
The proposed amendment’s primary characteristic is that it permits depositors to select up to four individuals in lieu of the current single-nominee method for bank accounts or fixed deposits. Making it simpler to disburse money once a bank account holder passes away is the goal, as this was difficult during the COVID-19 pandemic.
Without the need for a will or succession certificate, nomination in bank deposits, mutual funds, and other financial assets enables the quicker and simpler release of monies from the account holder’s account or locker.
Bank savings nominees and locker account numbers increased from one to four.
Nominees may access the bank deposits, goods, or contents of the locker in the event of the accountholder’s death. Under the proposed modification, nominees for bank deposits may be appointed either concurrently or sequentially, but only in sequential order for other purposes. When multiple nominees are nominated simultaneously, the nomination will take effect in a predetermined proportion. Priority for any subsequent nominations will go to the candidate who placed higher in the nomination sequence.
The Banking Regulation Act permits single or joint deposit holders to designate a nominee for their deposit, according to the Banking Laws (Amendment) Bill, 2024. Such a nominee may also be designated for bank-owned property or for a bank-rented locker. In the event of the nominator’s death, the nominee will have access to the deposit, articles, or locker. For these purposes, the Bill permits the nomination of a maximum of four nominees. Such nominees may be appointed simultaneously or successively for deposits, and subsequently for other purposes. If two people are nominated at the same time, the nomination will take effect in the specified proportion. The nominee with the highest ranking in the nomination sequence will be given precedence for subsequent nominations.
What exactly does nomination mean in a bank account?
The Reserve Bank of India states that: “Nomination is a facility that enables a deposit account holder(s) (individual or sole proprietor) or safe deposit locker holder(s) to nominate an individual, who can claim the proceeds of the deposit account(s) or contents of the safe deposit locker(s), post the demise of the original depositor(s) or locker holder(s).
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