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CHAPTER XI
NOMINATION

All individuals opening accounts with banks are extended the facility of opening joint
accounts on either or survivor basis and/or the facility of nomination. It is essential to ensure
that individuals open accounts with such facilities as otherwise the survivor/heirs would face
the problem of having to produce valid legal representation to claim the amounts on the death
of the account holder. In order to avoid such difficulties the availability of the above facilities
shall invariably be brought to the notice of the depositor at the time of opening the account
viz incorporating nomination in the account opening application form itself.
Provisions in the Banking Regulation Act, 1949
The Banking Regulation Act, 1949 was amended by Banking Laws (Amendment) Act, 1983
by introducing new Sections 45ZA to 45ZF, which provide, inter alia, for the following
matters:
a) To enable a banking company to make payment to the nominee of a deceased depositor,
the amount standing to the credit of the depositor.
b) To enable a banking company to return the articles left by a deceased person in its safe
custody to his nominee, after making an inventory of the articles in the manner directed by
the Reserve Bank.
c) To enable a banking company to release the contents of a safety locker to the nominee of
the hirer of such locker, in the event of the death of the hirer, after making an inventory of
the contents of the safety locker .
The Banking Companies (Nomination) Rules, 1985
Since such nomination has to be made in the prescribed manner, the Central Government
framed, in consultation with the Reserve Bank of India, the Banking Companies
(Nomination) Rules, 1985. These Rules, together with the provision of new Sections 45ZA to
45ZF of the Banking Regulation Act, 1949 regarding nomination facilities were brought into
force with effect from 1985.
The Banking Companies (Nomination) Rules, 1985 which are self-explanatory, provide for:(a) Nomination Forms for deposit accounts, articles kept in safe custody and contents of
safety lockers.
(b)Forms for cancellation and variation of the nominations.
(c) Registration of Nominations and cancellation and variation of nominations, and
(d)Matters related to the above.
Acknowledgement of Nomination
In terms of Rules 2 (9), 3 (8) and 4 (9) of the Banking Companies Nomination (Rules), 1985,
Banks are required to acknowledge in writing to the depositor(s) / locker hirers (s) the filing

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of the relevant duly completed Form of nomination, cancellation and / or variation of the
nomination.
Such acknowledgement should be given to all the customers irrespective of whether the same
is demanded by the customers.
Registering the nomination
In terms of Rules 2 (10), 3 (9) and 4 (10) of the Banking Companies (Nomination) Rules,
1985 banks are required to register in its books the nomination, cancellation and/ or variation
of the nomination. The banks should accordingly take action to register nominations or
changes therein, if any, made by their depositor(s) / hirers.
Incorporation of the legend Nomination Registered in pass book, deposit receipt etc.
and indicating the Name of the Nominee in Pass Books / Fixed Deposit Receipts
When a bank account holder has availed himself of nomination facility, the same may be
indicated on the passbook so that, in case of death of the account holder, his relatives can
know from the pass book that the nomination facility has been availed of by the deceased
depositor and take suitable action.
Banks may record on the face of the passbook the position regarding availment of nomination
facility with the legend "Nomination Registered". This may be done in the case of term
deposit receipts also.
Further, banks shall in addition to the legend Nomination Registered, should also indicate
the name of the Nominee in the Pass Books / Statement of Accounts / FDRs, in case the
customer is agreeable to the same.
45 - ZA NOMINATION FOR PAYMENT OF DEPOSITORS MONEY
Where a deposit is held by a banking company to the credit of one or more persons, the
depositor, or, as the case may be, all the depositors together, may nominate, in the prescribed
manner, one person to whom in the event of the death of the sole depositor or the death of all
the depositors, the amount of deposit may be returned by the banking company.
The nomination may be made only in respect of a deposit which is held in the individual
capacity of the depositor and not in any representative capacity as the holder of an office or
otherwise.
The said nomination shall be made in favour of only one individual.
In the case of deposit held to the credit of more than one depositor, the cancellation or
variation of a nomination shall not be valid unless it is made by all the depositors surviving at
the time of the cancellation or variation of the nomination.
A nomination or cancellation of nomination or variation of nomination shall not cease to be
in force merely by reason of the renewal of the deposit.

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Where the nominee is a minor, the depositor or, as the case may be, all the depositors
together, may, while making the nomination, appoint another individual not being a minor, to
receive the amount of the deposit on behalf of the nominee in the event of the death of the
depositor or, as the case may be, all the depositors during the minority of the nominee.
In the case of a deposit made in the name of minor, the nomination shall be made by a person
lawfully entitled to act on behalf of the minor.
Payment by a banking company in accordance with the provisions of this Section shall
constitute a full discharge to the banking company of its liability, in respect of the deposit.
Provided that nothing contained in this sub-section shall affect the right or claim, which any
person may have against the person to whom any payment is made under this Section.
Notwithstanding anything contained in any other law for the time being in force or in any
disposition, whether testamentary or otherwise, in respect of such deposit , where a
nomination made in the prescribed manner purports to confer on any person the right to
receive the amount of deposit from the banking company, the nominee shall, on the death of
the sole depositor, or, as the case may be, on the death of all the depositors, become entitled
to all the rights of the sole depositor, or, as the case may be, of the depositors, in relation to
such deposit to the exclusion of all other persons, unless the nomination is varied or cancelled
in the prescribed manner.
Nomination Facility in Single Deposit Accounts (RBI guidelines)
Banks should generally insist that the person opening a deposit account makes a nomination.
In case the person opening an account declines to fill in nomination, the bank should explain
the advantages of nomination facility. If the person opening the account still does not want to
nominate, the bank should ask him to give a specific letter to the effect that he does not want
to make a nomination. In case the person opening the account declines to give such a letter,
the bank should record the fact on the account opening form and proceed with opening of the
account if otherwise found eligible. Under no circumstances, a bank should refuse to open an
account solely on the ground that the person opening the account refused to nominate.
Nomination facilities in respect of safe deposit locker / safe custody articles
Sections 45ZC to 45ZF of the Banking Regulation Act, 1949 provide for nomination and
release of contents of safety lockers / safe custody article to the nominee and protection
against notice of claims of other persons.
In the matter of returning articles left in safe custody by the deceased depositor to the
nominee or allowing the nominee/s to have access to the locker and permitting him/them to
remove the contents of the locker, the Reserve Bank of India, in pursuance of Sections
45ZC(3) and 45ZE(4) of the Banking Regulation Act, 1949 has specified the formats for the
purpose.
In order to ensure that the amount of deposits, articles left in safe custody and contents of
lockers are returned to the genuine nominee, as also to verify the proof of death, banks may

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devise their own claim formats or follow the procedure, if any, suggested by the Indian
Banks' Association for the purpose.
45-ZC, Nomination for return of articles kept in safe custody with banking company
Where any person leaves any article in safe custody with a banking company such person
may nominate, in the prescribed manner one person to whom, in the event of the death of the
person leaving the article in safe custody, such article may be returned by the banking
company.
Where the nominee is a minor, it shall be lawful for the person making the nomination to
appoint in the prescribed manner any person to receive the article deposited in the event of
his death during the minority of the nominee.
The banking company shall before returning any articles under this section to the nominee or
the person appointed under subsection (2), prepare in such manner as may be directed by the
Reserve Bank from time to time, inventory of the said articles which shall be signed by such
nominee or person and shall deliver a copy of the inventory so prepared to such nominee or
person.
Similarly in respect of safe custody article, where a nomination made in the prescribed
manner purports to confer on any person the right to receive the article from the banking
company, the nominee shall, on the death of the person leaving the article in safe custody,
become entitled to the return of the article to the exclusion of all other persons, unless the
nomination is varied or cancelled in the prescribed manner. Provided that nothing contained
in this section shall affect the right or claim which any person may have against the person to
whom the articles returned in pursuance of this sub-section.
NOTICE OF CLAIMS OF OTHER PERSONS REGARDING DEPOSITS/ARTICLES
IN SAFE CUSTODY
No notice of the claim of any person, other than the person or persons in whose name a
deposit is held by a banking company shall be receivable by the banking company nor shall
the banking company be bound by any such notice even though expressly given to it.
Provided that nothing contained in this sub-section shall affect, authority from a court of
competent jurisdiction relating to such deposit is produced before a banking company, the
banking company shall take due note of such decree, order, certificate
Same is the case of safe custody articles.
45 - ZE. RELEASE OF CONTENTS OF SAFETY LOCKERS
Where an individual is the sole hirer of a locker from a banking company, whether such
locker is located in the safe deposit vault of such banking company or elsewhere, such
individual may nominate one person to whom, in the event of the death of such individual,
the banking company may give access to the locker and liberty to remove the contents of the
locker.
Where any such locker is hired from a banking company by two or more individuals jointly
and under the contract of hire the locker is to be operated under the joint signatures of two or

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more of such hirers, such hirers may nominate one or more persons to whom, in the event of
the death of such joint hirer or hirers the banking company may give, jointly with the
surviving joint hirer or joint hirers, as the case may be, access to the locker and liberty to
remove the contents of such locker.
The banking company shall, before permitting the removal of the contents of any locker by
any nominee or jointly by any nominee and survivors as aforesaid, prepare, in such manner as
may be directed by the Reserve Bank from time to time, an inventory of the contents of the
locker which shall be signed by such nominee or jointly by such nominee and survivors and
shall deliver a copy of the inventory so prepared to such nominee or nominees and survivors.
On the removal of the contents of any locker by any nominee or jointly by any nominee and
survivors as aforesaid, liability of the banking company in relation to the contents of the
locker shall stand discharged.
No suit for prosecution or other legal proceeding shall lie against a banking company for any
damage caused or likely to be caused, for allowing access to any locker, and liberty to
remove the contents of such locker.
45 - ZF. NOTICE OF CLAIMS OF OTHER PERSONS REGARDING SAFETY
LOCKERS
No notice of the claim of any person, other than hirer of locker, shall be receivable by a
banking company nor shall the banking company be bound by any such notice even though
expressly given to it.
Provided that where any decree, order, certificate or other authority from a court of
competent jurisdiction relating to the locker or its contents is produced before the banking
company, the banking company shall take due note of such decree, order, certificate or other
authority.
(Nomination Facilities) Explanatory Note to Sections 45 - ZA to 45ZF of the Banking
Regulation Act, 1949 and the Banking Companies (Nomination) Rules, 1985
The Banking Regulation Act, 1949 was amended by Section 37 of the Banking Laws
(Amendment) Act, 1983 by introducing new Sections 45ZA to 45ZF, which provide,
interalia, for the following matters.
Since such nomination has to be made in the prescribed manner, the Central Government has
framed, in consultation with the Reserve Bank of India, the Banking Companies
(Nomination) Rules, 1985. These Rules, together with the provisions of new Sections 45ZA
to 45ZF of the Banking Regulation Act, 1949 regarding nomination facilities came into force
with effect from 29.03.1985.
As can be seen from the text of the Banking Companies (Nomination) Rules 1985 which are
self-explanatory, they provide for:a) Nomination Forms for deposit accounts; articles kept in safe custody and contents of
safety lockers.
b) Forms for cancellation and variation of the nominations.

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c) Registration of Nominations and cancellation and variation of nominations and
d) Matters related to the above.
IMPORTANT POINTS TO BE NOTED
Any cancellation of nomination or subsequent amendments should be clearly noted under
authentication of the authorised official.
In the case of nomination already filed no correction should be made. If the depositor wants
to change the nominee, Form DA 3 should be taken and it should be attached to the original
nomination filed. This clause should be recorded in the deposit ledger as well as the Account
Opening Form.
Only one nomination can be filed in respect of a particular deposit at a time. This is
applicable in the case of joint accounts also.
Nomination facility is applicable to all types of deposits, Safe Deposit Locker and Safe
Custody articles.
Nomination facility is applicable to deposits held in the name of individuals and sole
proprietary concerns.
Nominations once filed can be varied/cancelled by all the surviving depositors together in the
case of joint accounts. In the case of a joint account, nominees right arises only upon the
death of all account holders.
On the death of a depositor, the nominee cannot avail a loan against the deposit as it would
not amount to payment of the deposit to the nominee.
Nomination facility is available only in the case of individual depositor of articles for safe
custody and not in respect of persons jointly depositing articles of safe custody.
Banks are not required to open sealed/closed packets left with them for safe custody, found in
locker, while releasing to nominee.
In the case of lockers hired jointly on the death of any one of the joint hirers, the contents of
the locker are allowed to be removed jointly by the nominee and the survivor(s) after an
inventory is taken in the prescribed manner. In such a case after such removal preceded by an
inventory, the nominee and surviving hirer(s) may still keep the entire contents with the bank,
if they desire so, by entering into a fresh contract of hiring a locker.
A minor can be appointed as a nominee for receiving contents of a hired locker. However in
such cases, the bank has a responsibility to ensure that when the contents of a locker are
sought to be removed on behalf of the minor nominee, the articles are handed over to a
person who in law is competent to receive the articles on behalf of the minor.
Nomination facility is available in Savings Bank accounts opened for crediting pensions. But
the nomination exercised by the pensioner under pension rules for receipt of arrears of
pension will not be valid for the purpose of deposit accounts held by the pensioner with banks

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for which a separate nomination is necessary in terms of the Banking Companies
(Nomination) Rules 1985 in case a pensioner desires to avail of nomination facility.
Branches should obtain separate nomination form for each Term Deposit Receipt (TDR).
Branches shall not add the details of the TDR issued to the depositor subsequently, in the
nomination form obtained at the time of the first TDR. The nomination forms is a statutorily
prescribed document bearing a specific date and thus valid for the transaction/s covered on
that specific date as executed by the depositor.
However, if the narration in the nomination form is in general terms as to the nature of
deposit account, e.g. Fixed Deposit, Savings Bank etc. and not mentioning specific accounts
like FD Account No., SB Account No., etc., separate nomination form need not be obtained
at the time of opening of new deposit account.
The branch may inform the nominee of the receipt of information of the death of the
depositor and also of the nomination filed in his favour, if after a reasonable time; it is found
that the nominee has not claimed the deposit.
If, on the death of the depositor, both the nominee and the legal heir made their claims
simultaneously (though it would be a rare case) in respect of the deposit, the branch should
take note of the legal heir holding succession certificate. However, branch should advise such
legal heir that in the absence of a court injunction restraining the Bank from effecting
payment to the nominee the Bank cannot accede to his request. The Bank will get valid
discharge by paying the nominee, so far as any legal heir has not produced, in the meanwhile,
any decree, order, certificate or other authority from a Court of competent jurisdiction.
In case of minors account, whether self-operated or otherwise, nomination should be made
by a person lawfully entitled to act on behalf of the minor.
Branches can record on the face of the pass book and also on the term deposit receipts
regarding availing of nomination facility with the legend nomination registered. The name
of the nominee shall not be entered in the pass book or term deposit receipt, unless the
customer requests in writing.