The Reserve Bank of India (RBI) has issued a draft circular proposing faster claim settlements for deceased account holders’ bank deposits, lockers, and safe custody items. The guidelines mandate banks to release funds to nominees without lengthy legal procedures and introduce penalties for delays, aiming to protect customer rights and reduce procedural hardships.
The Reserve Bank of India (RBI), headquartered in Mumbai, is the country’s central banking authority overseeing monetary policy, financial regulation, and banking supervision. It plays a pivotal role in safeguarding depositor interests, ensuring liquidity, and maintaining the stability of the Indian banking system.
In its latest regulatory move, the RBI has released a draft circular designed to streamline claim settlements after the death of a bank account holder. The proposals apply to all commercial banks and co-operative banks across India and cover deposit accounts, safe deposit lockers, and articles held in safe custody.
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Simplified Claim Process for Nominees
Under the proposed framework, banks must release funds to nominees or surviving account holders without insisting on legal documents such as succession certificates or probate orders—provided there is no will, court order, or dispute.
To initiate the claim, nominees will need to submit:
- A claim form
- The account holder’s death certificate
- A valid identification document
This measure aims to remove bureaucratic hurdles and ensure families can access funds promptly in times of need.
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Mandatory Compensation for Delays
The draft guidelines also impose strict penalties on banks for delays attributable to them:
- For deposit claims: Banks must pay interest at Bank Rate + 4% per annum on the claim amount for the period of delay.
- For lockers or safe custody articles: A ₹5,000 per day penalty applies for delays in processing claims after all documents have been submitted.
If a claim is delayed, banks will be required to communicate the reason in writing to the claimant.
Special Provisions for Non-Nominee and Joint Accounts
For cases where no nomination exists or in joint accounts without a survivor clause, banks must adopt a simplified claim settlement process to avoid unnecessary hardship to legal heirs.
Key points include:
- Banks must set a threshold limit of ₹15 lakh for claims under simplified processing.
- Claims must be settled within 15 days of receiving complete documentation.
- For lockers or articles in safe custody, banks must fix a date for inventory within 15 days of receiving documents and inform the claimant accordingly.
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Consultation Period and Next Steps
The RBI has invited public and stakeholder feedback on the draft circular until August 27, 2025. Once finalised, these rules are expected to standardise claim settlement timelines, enhance transparency, and ensure better customer service across India’s banking sector.
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