In India, nomination laws play a vital role in ensuring the smooth transfer of assets—such as bank accounts, insurance policies, mutual funds, and other holdings—after the death of the owner. While the nominee receives the asset, it’s important to understand that they are not always the ultimate legal owner. Instead, they often act as a trustee for the legal heirs, who inherit assets as per succession laws.
A recent amendment has brought an important change:
Under the Banking Laws (Amendment) Act, 2024, account holders can now appoint up to four nominees for their deposit accounts. They may choose between:
* Simultaneous nomination: Multiple nominees receive a share of funds in a specified ratio.
* Successive nomination: If the primary nominee is deceased, the next nominee in line receives the funds.
This progressive step, passed by Parliament in March 2025, is designed to give depositors more flexibility, reduce disputes, and minimize the problem of unclaimed deposits. Notably, safe deposit lockers continue to allow only a single, successive nominee.
Following the amendment to the Banking Laws (Amendment) Act, 2025, which takes effect on November 1, 2025, bank account holders may nominate up to four individuals for their deposit accounts, articles held in safe custody, and bank lockers. Nominations can be made either simultaneously, by specifying each nominee’s percentage share for deposit accounts, or successively, by indicating nominees in order of priority. To know more read: NEW RBI GUIDELINES EFFECTIVE NOVEMBER 1, 2025
Understanding Nomination in India
1. What is Nomination?
Nomination is the process by which an individual (the nominator) designates a person (the nominee) to receive assets upon their death. This applies to bank accounts, insurance policies, shares, mutual funds, provident fund, and other investments.
The nominee’s role is that of a custodian, receiving assets on behalf of the rightful heirs.
2. Legal Position of a Nominee
A nominee is not automatically the legal heir. Their role is limited to receiving the asset and handing it over to the heirs as per succession laws.
* In some cases, like EPF and LIC policies, the nominee may directly benefit.
* However, even here, legal heirs can challenge the nominee’s claim in court.
Read: BEYOND NOMINATION: THE LEGAL IMPERATIVE OF EXECUTING A WILL
3. Nomination vs. Succession
*Nomination: Simplifies the claim settlement process after death.
* Succession: The legal process of determining ownership and distribution under personal or succession laws.
If no nominee is appointed, assets are distributed as per applicable succession laws, such as the **Indian Succession Act**.
4. Key Points About Nomination
* Nomination is not a substitute for a will.
* Nominees can be family, friends, or any chosen person.
* Minors can be nominated, but a guardian must be appointed to manage the asset until they turn 18.
* Legal heirs can dispute nominations if they have valid claims under succession laws.
Read: Nomination in India: What You Need to Know About Asset Transfers After Death
In India, nomination laws play a vital role in ensuring the smooth transfer of assets—such as bank accounts, insurance policies, mutual funds, and other holdings—after the death of the owner. While the nominee receives the asset, it’s important to understand that they are not always the ultimate legal owner. Instead, they often act as a trustee for the legal heirs, who inherit assets as per succession laws.
A recent amendment has brought an important change:
Under the Banking Laws (Amendment) Act, 2024, account holders can now appoint up to four nominees for their deposit accounts. They may choose between:
* Simultaneous nomination: Multiple nominees receive a share of funds in a specified ratio.
* Successive nomination: If the primary nominee is deceased, the next nominee in line receives the funds.
This progressive step, passed by Parliament in March 2025, is designed to give depositors more flexibility, reduce disputes, and minimize the problem of unclaimed deposits. Notably, safe deposit lockers continue to allow only a single, successive nominee.
Forms used in Banks for nomination
In India, banks use forms like Form DA1 for nominating a person for bank deposits, Form DA2 for cancellation, and Form DA3 for varying a nomination. For safe deposit lockers, banks use forms like Form SL1 for individual nomination, Form SL1A for joint nomination, and Form SL2 for cancellation. These forms are available on the bank’s website or at the branch.
Forms for Deposit Accounts
Form DA1: Used for creating a fresh nomination for a bank deposit account.
Form DA2: Used for cancelling an existing nomination.
Form DA3: Used for making variations or changes to an existing nomination.
Forms for Safe Deposit Lockers
Form SL1: For nomination by a single (sole) locker hirer.
Form SL1A: For making a nomination by joint locker holders.
Form SL2: For cancelling an existing nomination for a locker.
Form SL3: For varying an existing nomination made by a sole locker hirer.
Nominator shall accurately provide your account details and the nominee’s name, address, and date of birth (if a minor)
5. Practical Examples
* Bank Accounts: A nominee can claim funds from the account, but heirs can demand their rightful share later.
* Insurance Policies: The nominee receives the payout, but heirs may contest ownership unless the nominee is also a beneficiary.
* Other Assets: Nominations also apply to demat accounts, NSCs, post office deposits, mutual funds, PPF, gratuity, and more.
✅ Key Takeaways
* Nomination is a simplification tool, not an alternative to succession or a will.
* The Banking Laws (Amendment) Act, 2024 allows up to four nominees for bank deposits, with simultaneous or successive options.
* Nominees are custodians, not ultimate owners—legal heirs still hold rights under succession laws.
* Always complement a nomination with a valid will to avoid disputes.
Read: BEYOND NOMINATION: THE LEGAL IMPERATIVE OF EXECUTING A WILL
✅ Key Takeaways
* Nomination is a simplification tool, not an alternative to succession or a will.
* The Banking Laws (Amendment) Act, 2024 allows up to four nominees for bank deposits, with simultaneous or successive options.
* Nominees are custodians, not ultimate owners—legal heirs still hold rights under succession laws.
* Always complement a nomination with a valid will to avoid disputes.
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