RBI released Draft Circular on Settlement of Death Claims in Banks
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The Reserve Bank of India (RBI) has released Draft Circular on Settlement of Claims in respect of Deceased Customers of Banks. The RBI has framed guidelines related to settlement of death claims in accounts having nomination and without nomination. You can read new guidelines and provide feedback to RBI.
Comments/ feedback by the public may be submitted through the respective link under the ‘Connect 2 Regulate’ Section available on the Reserve Bank’s website or alternatively through e-mail by August 27, 2025.
Accounts with nominees/ survivorship clause
If the customer has provided nomination facility in his/her deposit account then bank can pay the amount to the nominee as per following conditions:
- the bank has exercised due care and caution in establishing the identity of the nominees/ survivors and the deceased status of the account holder by obtaining appropriate documentary evidence (physical or equivalent e-document);
- there is no order from the competent court, as on the date of settlement/ payment, restraining the nominees/ survivors or the bank from receiving/ making the payment from the account of the deceased depositor;
- it has been made clear in writing to the nominees/ survivors that they would be receiving the payment from the bank as a trustee of the legal heirs of the deceased depositor, i.e., such payment to her/ him shall not affect the right or claim which any person may have against the nominees/ survivors to the extent of the payment made to them; and
- there is no ‘Will’ left behind by the deceased depositor.
Bank shall not insist on production of other legal documents such as succession certificate, letter of administration, probate of Will, etc., or seek any bond of indemnity/ surety from the nominees/ survivors/ third-party. A bank shall require submission of the following documents in such cases:
- Claim form, as given in Annex I-A, duly signed by the nominees/ survivors;
- Death certificate; and
- Officially Valid Document of the nominee/ survivor towards verifying her/ his identity and address.
Accounts without nominee/ survivorship clause
Banks are required to follow a simplified process for settling claims in cases where the depositor has passed away without naming a nominee, or in joint accounts that do not have a nomination or survivorship clause. This is to ensure that claimants or legal heirs do not face unnecessary inconvenience or hardship. To facilitate such settlements, each bank should determine a threshold limit for using the simplified procedure, based on its internal risk management systems. However, this threshold must not be less than ₹15 lakh.
In case where claim amount is above the threshold limit, in addition to the documents mentioned at paragraph 10(a)(i) to (v) above, the claim shall be settled based on
- Succession certificate; or
- Legal Heir Certificate issued by a competent authority or Declaration regarding the legal heirs of the deceased depositor as given in Annex I-E, sworn as an affidavit before a Judge/ Judicial Magistrate, by an independent person who is well known to the family of the deceased but unconnected with it and acceptable to the bank. The claim may be accompanied by a Bond of Indemnity/ surety from third-party individuals, as given in Annex I-C, acceptable to the bank and good for the claim amount.
Settlement of Claims in Safe Deposit Locker with nominee
If a sole locker hirer nominates an individual(s) to receive the contents in the locker in case of her/ his death, bank shall give access of the locker to such nominees with liberty to remove the contents of the locker. In case of a minor nominee, bank shall ensure that, the contents of locker, when sought to be removed on behalf of the minor nominee, are handed over to a person who is, in law, competent to receive the contents of safe deposit locker on behalf of such minor.
In case the locker was hired jointly with the instructions to operate it under joint signatures, and the locker hirers nominates any other individual(s), in the event of death of any of the locker hirers, the bank shall give access of the locker and the liberty to remove the contents jointly to the nominees and the survivors. In case the locker was hired jointly with survivorship clause and the hirers instructed that the access of the locker should be given to “either or survivor”, “anyone or survivor” or “former or survivor” or according to any other survivorship clause permissible under the provisions of the Banking Regulation Act, 1949, the bank shall follow the mandate in the event of death of one or more of the joint locker hirers.
The following documents shall be obtained by a bank in this regard for processing the claim:
- Claim form, as given in Annex I-A, duly signed by the survivors/ nominees;
- Death certificate; and
- Officially Valid Document of the survivor/ nominee towards verifying her/ his identity and address.
Settlement of Claims in Safe Deposit Locker without nominee
In case where the deceased locker hirer had not made any nomination or where the joint hirers had not given any mandate that the access may be given to one or more of the survivors by a clear survivorship clause, a bank may obtain the following documents to settle the claims without obtaining any legal documentation such as succession certificate, letter of administration, etc. provided there is no dispute amongst the legal heirs:
- Claim form, as given in Annex I-B, duly filled and signed by the claimant legal heirs;
- Death certificate;
- Officially Valid Document of the claimants towards verifying his/ her identity and address;
- Letter of disclaimer/ no objection, as given in Annex I-D, from non-claimant legal heirs, if applicable; and
- Legal Heir Certificate issued by a competent authority or Declaration regarding the legal heirs of the deceased locker hirer as given in Annex I-E, sworn as an affidavit before a Judge/ Judicial Magistrate, by an independent person who is well known to the family of the deceased but unconnected with it and acceptable to the bank.
A major problem area is no nomination and some of the successors living abroad. Banks should be permitted to pay the successors present, their respective share of the dues, retaining the share of those who do not present themselves.
At present Bank’s are not allowing nomination facility to joint hirers of the safe deposit locker, where they have mandated that the locker will be operated upon by “any one of the hirers or the surviving hirer”. In such a case, when any untoward incident takes place and all the joint hirers remain no more, their legal heirs have to face much hardships in obtaining Succession Certificate from the competent court, as it takes lot of time and expenses.
Hence Bank’s should be instructed to allow nomination facility also to joint hirers of the locker, where the Mandate to operate upon the locker is “either or survivor” or “any one or survivor”.
What is the procedure if account holder deceased having some shares & A/c has not joint holder or no nominee. Total amount of shares is below 15 lakh rupees
The Bank is Discharged by paying the amount, standing in the account of deceased depositor, to the nominee or to the Survivor, as the case may be, So there is no need for Bank to obtain a declaration or an undertaking from them about leaving a will by the deceased depositor or not. Once the payment is made to the nominee or survivor he /she
is bound to follow the will, if at all it is there. Bank has no role after payment as per the mandate given by the deceased at the time of depositing the amount with the Bank. This is necessary to avoid involvement of paying Bank in litigation in future .
In case the depositor died intestate the amount standing in his/her name the Bank should pay the amount jointly to all the class 1 Legal heirs of the deceased depositor on proper identification and also on execution of an indemnity Bond with two sound & respectable sureties to the satisfaction of the Bank.
The move initiated by RBI is good. TAT time should also be there. A list of documents should also be provided to the claimants as soon as they approach for the claim. The list of documents should be repeatedly published/circulated on various media’s for the benefit of all. The knowledge of Bankers at Branch Level should also be enhanced. In most of the matters it is observed that due to lack of knowledge the claim is unneccessary delayed and many a times bank’s direct the claimant to go to court for obtaining succession certificate