RBI’s New 4-Nominee Rule: What It Means for Your Bank Accounts and Your Will
The Reserve Bank of India recently updated its nomination guidelines, allowing bank customers to nominate up to four individuals for their deposit accounts and lockers, effective November 1, 2025. This significant change offers more flexibility in estate planning, but it also raises important questions about how these nominations interact with your will.
Understanding the New RBI Nomination Rules
Under the Banking Laws (Amendment) Act, 2025, banks now offer three distinct nomination options for deposit accounts, lockers, and safe custody items.
Single Nomination
Designate one person as the nominee for savings accounts, current accounts, fixed deposits, recurring deposits, and lockers. This traditional approach remains available for those who prefer simplicity.
Simultaneous Nomination
Nominate up to four individuals and specify each person's percentage share, with the total equalling 100%. Available for all deposit accounts (savings, current, FD, and RD), this option allows you to split your assets among multiple beneficiaries immediately upon your passing. For example, if an account has ₹10 lakh and three nominees are assigned with a 40:30:30 split, the funds will be distributed accordingly—₹4 lakh to the first nominee and ₹3 lakh each to the others.cnbctv18
Successive Nomination
Nominate up to four individuals in priority order, where the next nominee becomes operative only after the previous nominee's demise. This cascading approach is available for deposit accounts and lockers, ensuring your assets pass through a predetermined line of succession. For lockers specifically, only successive nomination is permitted.
The Critical Limitation of Bank Nominations
While these nomination options provide convenience for asset transfer, they have a fundamental limitation: nominations are not legally binding distributions of your estate. Under Indian law, nominees act as trustees who receive your assets and must distribute them according to inheritance laws or your will.
Key points to remember:
Nominees receive your bank assets quickly after your death, bypassing probate delays.
However, nominees act only as trustees, not rightful owners of the funds.
If your will differs from your nomination, the will supersedes—nominees must distribute assets according to your will.
Without a will, assets will be distributed according to Indian Succession Acts, regardless of nomination.
How This Affects iWills India Platform Users
The new RBI guidelines actually strengthen the case for creating a comprehensive will through platforms like iWills India:
Clarity Beyond Banking
While you can now nominate four people for your bank accounts, your will covers all assets—property, investments, jewelry, vehicles, digital assets, and more. A will provides holistic estate planning that bank nominations cannot match.
Legal Authority
Your will legally directs how nominees should distribute inherited assets. Without a will, nominees might face conflicting claims from legal heirs, leading to the very disputes you wanted to avoid.
Avoiding Family Conflicts
The ₹78,213 crore in unclaimed deposits as of March 2024 (up 26% from the previous year) demonstrates what happens when estate planning is incomplete. Multiple nominations without clear testamentary instructions can create confusion among surviving family members.
Comprehensive Coverage
Bank nominations don't address guardianship of minor children, specific bequests of sentimental items, charitable donations, or funeral wishes—all of which can be included in your will.
Best Practice: Nominations Plus a Will
The optimal approach combines both tools for smooth transfer of assets:
Step 1: Update your bank nominations using the new RBI guidelines to ensure smooth, immediate access to funds for your nominees.
Step 2: Create or update your will through iWills India to provide legally binding instructions on asset distribution.
Step 3: Ensure consistency between your nominees and your will's beneficiaries to minimize potential disputes.
Step 4: Review regularly as your family situation, assets, and wishes evolve
Taking Action
Don't let the convenience of bank nominations lull you into thinking your estate planning is complete. While the new four-nominee rule offers helpful flexibility, only a properly drafted, registered will provides comprehensive legal protection for your assets and peace of mind for your family. Banks now must complete all nomination-related requests within three working days, making it easier than ever to update your nominations. Combine this with a will from iWills India for complete estate planning protection.
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