RBI’s New Rules Make It Simpler For Legal Heirs To Access Funds
The Reserve Bank of India (RBI) has recently issued new directives aimed at streamlining the nomination process for savings accounts, fixed deposits, and safe deposit lockers.
To minimise hardship and facilitate the quick settlement of claims for family members upon a depositor’s demise, the Reserve Bank of India (RBI) has recently issued new directives aimed at streamlining the nomination process for savings accounts, fixed deposits, and safe deposit lockers. These measures aim to ensure the smooth transfer of assets to nominees, thereby reducing legal complications for the families of account holders.
With this new directive, RBI seeks to address the issue of unclaimed deposits, which has seen a significant increase. As of March 2024, unclaimed deposits in banks surged by 26%, reaching Rs 78,213 crore, up from Rs 62,225 crore in March 2023. These unclaimed funds, from accounts inactive for over 10 years, are transferred to the RBI's Depositor Education and Awareness (DEA) Fund. These staggering numbers reveal why it is important to have properly nominated records to avoid funds being left unclaimed.
Key Highlights Of The RBI’s Directive:
Mandatory Nomination Facility: Banks and Non-Banking Financial Companies (NBFCs) are now required to offer a nomination facility to all account holders. This applies to savings accounts, fixed deposits, and safe deposit lockers. The nomination process should be straightforward and accessible to customers.
Account Opening Form: This needs to be modified suitably with provision for the customers to avail or opt out of nomination facility.
Handling Nominations and Claims: The staff at branches should be trained to collect nominations and handle claims from deceased account holders, ensuring they deal with nominees and legal heirs appropriately.
Publicise Benefits: Customers must be informed about the nomination facility and all its benefits.
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Implications For Account Holders
Having a nominee on record simplifies the process of transferring funds from savings accounts, fixed deposits, or safe deposit lockers to the designated individual(s) without unnecessary delays or legal hurdles. This proactive measure safeguards families from challenges during challenging times. Additionally, account holders are encouraged to ensure their accounts are properly nominated, reducing the risk of unclaimed deposits.
Steps To Nominate An Individual:
Obtain the Nomination Form: Visit your bank or NBFC to request the appropriate nomination form.
Complete the Form: Provide the required details, including the nominee’s full name, address, and relationship to you.
Submit the Form: Return the completed form to the bank or NBFC. Ensure you receive an acknowledgment confirming the registration of your nomination.
When an account holder uses the nomination facility, it gets noted in the passbook. This way, if the account holder passes away, their relatives can easily see that a nomination has been made and take the necessary steps.
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The RBI’s recent directives remind us of the importance of having a nomination in place for all bank accounts and deposits. These measures aim to provide peace of mind to account holders and their families. Account holders are encouraged to review and update their nominations regularly to reflect any changes in personal circumstances. This ensures that their financial assets are transferred according to their wishes. Proper nomination records can also prevent funds from going unclaimed.
It is essential to get your nominee’s detail registered to avoid legal hurdles or other related issues after the demise of the account holder. These initiatives empower citizens and create consumer safeguard awareness.
(The author is the DGM-Communication of BankBazaar.com. This article has been published as part of a special arrangement with BankBazaar)
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