RBI makes standard guidelines to settle the claims of the deceased account holders

1. Overview and Applicability:

• RBI standardizes ways in which banks should pay claims on dead customers.
• Intends to remove the divergent practices between banks.
• Only available to: Any commercial and co-operative bank.
• Inapplicable to: Government savings schemes (SCSS, PPF etc.)
• Deadline of implementation: 31 st March 2026.

2. Major Nomination stipulations:

• Deposit accounts, lockers and safe custody articles are under nomination facility.
• Laws: Banking Regulation Act, 1949.
• Nominee/survivor may get the money and hold it as a trustee on behalf of the legal heirs.
• Under joint accounts As long as all holders survive, no one can claim funds.

3. Streamlined Settlement Policy:

• Unlimited claims with no legal documentation:
• Cooperative banks: Rs5 lakh
• Commercial banks: Rs15 lakh
• Documents needed: Death certificate, evidence of identity of claimant, indemnity bond, NOC of other heirs.
• Where the claim is above the limit: certificate of succession is necessary.

4. Timelines and Penalties:

• 15 days after submission of the document to settle.
• Penalties for delays:
• Deposits: Interest at bank rate + 4 percent per annum.
• Lockers/safe custody: Rs5,000 per day fine.
• Locker inventory under 15 days of claim notification.

5. Significance:

• Offers standard, time-limited plan of claim payment.
• Lessens the stress on legal heirs.
• Provides accountability and transparency in banking.
• Guarantees the interests of ordinary depositors and their families.