The RBI has now put in place a uniform, time‑bound framework for settlement of claims in respect of deceased customers’ deposits, replacing the earlier patchwork of circulars and ensuring standard procedures across banks. The new Directions mandate simplified documentation, defined thresholds for small-value claims, a strict 15‑day turnaround time (TAT), and compensation for delay, thereby reducing hardship to nominees, survivors and legal heirs.
Regulatory background
RBI has, over the years, issued instructions on nomination, survivorship clauses and simplified settlement of deceased depositors’ claims, including the earlier guidance to settle such claims within 15 days where basic documents are produced. Persistent divergence in banks’ practices and frequent insistence on court orders even in clear nomination/survivorship cases prompted RBI to issue a comprehensive, uniform framework in 2025.
The Reserve Bank of India (Settlement of Claims in respect of Deceased Customers of Banks) Directions, 2025 were notified vide Notification No. RBI/2025‑26/82 dated 26 September 2025 and is to be implemented by all commercial and co‑operative banks by 31 March 2026. These Directions consolidate and supersede earlier circulars on settlement of deceased depositors’ accounts, lockers and safe‑custody articles, except where specific government schemes (e.g. PPF, SCSS) have their own rules.
Scope and coverage
The Directions apply to settlement of claims in respect of deceased customers of banks, and not merely “depositors”. In particular, they cover:
- Deposit accounts: savings, current, term deposits and similar liability products.
- Safe deposit lockers: access, inventory and release of contents standing in the name of deceased locker‑holders.
- Articles in safe custody: packets and valuables kept in safe custody with banks.
The framework is applicable to:
- All scheduled commercial banks, including small finance banks and payment banks where relevant to permitted products.
- Co‑operative banks within RBI’s regulatory remit.
However, government‑administered small savings schemes like PPF and SCSS remain governed by their respective scheme rules and are outside the scope of these Directions.
Core principles of the uniform framework
RBI’s uniform framework rests on a few foundational principles designed to improve customer service and reduce litigation.
Key principles include:
- Time‑bound settlement: Banks must settle claims in deposit accounts within 15 calendar days of receipt of all required documents and identification, subject to verification.
- Standardisation: Adoption of common claim forms (Annex I‑A to I‑H), uniform document lists and harmonised procedures across banks.
- Proportionality and simplification: Relaxed documentary requirements for small‑value claims up to specified thresholds, especially where there is no nomination/survivorship clause.
- Transparency: Mandatory display on the bank’s website and at branches of procedures, documents required, thresholds and timelines for settlement.
- Accountability and compensation: Clear responsibility for delay beyond the prescribed TAT and payment of interest/compensation to claimants in such cases.
Treatment of different account situations
The Directions distinguish between various legal and operational configurations of deposit accounts and prescribe tailored procedures.
Accounts with nomination / survivorship clause
Where a valid nomination exists, or the account carries a clear survivorship mandate (e.g. “Either or Survivor”, “Former or Survivor”), the intention is to ensure expeditious settlement without insisting on succession certificates in normal, undisputed cases.
Key points:
- The nominee or surviving account‑holder(s) may lodge the claim using the prescribed claim form (Annex I‑A) along with the death certificate and officially valid identity documents.
- Banks must verify identity and ensure absence of any court order or restraint, and then release the balance within 15 calendar days of receiving the complete claim.
- For joint deposits with survivorship clause, surviving depositor(s) can withdraw or close the account as per mandate, without requiring concurrence of legal heirs, unless there is a dispute or contrary court order.
Accounts without nomination / survivorship clause
Historically, this category caused maximum delay and hardship, as banks often insisted on court orders even for modest balances. The Directions now prescribe a simplified process for small‑value claims, backed by indemnities and declarations, without insisting on succession certificates in all cases.
Important elements:
- Threshold for simplified procedure: Banks are required to adopt a board‑approved threshold (e.g. up to ₹15 lakh) for which claims can be settled on the basis of specified documents, without mandatory court orders, subject to safeguards.
- Documents for small claims typically include:
- Claim form (Annex I‑B) signed by claimant(s) other than those giving letters of disclaimer/no‑objection.
- Death certificate of the deceased depositor.
- Officially valid document (OVD) of claimant(s) for identity and address.
- Indemnity bond (Annex I‑C) and no‑objection / disclaimer letters (Annex I‑D) from other legal heirs where applicable.
- For claims above the threshold, banks may require additional documentation such as succession certificate, legal heirship certificate, probated will, or court order, in line with their board‑approved policy.
Accounts where a Will exists
The Directions recognise that testamentary succession via a Will may be present and prescribe differentiated treatment depending on whether the Will is disputed. In cases involving an unchallenged Will, banks may settle claims in favour of beneficiaries named in the Will, based on:
- Copy of the Will, proof of death and identity of beneficiaries.
- Additional documentation like legal heir certificate or indemnities, as per bank policy and legal advice.
- Where the Will is contested or there are competing claims, banks are expected to exercise caution and may insist on probate or court orders before releasing funds.
Premature withdrawal of term deposits on death
A significant aspect of uniformity is the common rule on premature termination of term deposits on the death of the depositor.
- Banks must allow premature termination of term deposits standing in the name of deceased depositors without levying any penal charge, even if premature withdrawal is otherwise subject to penalty.
- In joint term deposits:
- Where a clear survivorship clause exists, surviving depositor(s) may request premature closure or continuation as per the original mandate, without the need for legal heirs’ concurrence in normal cases.
- Where there is no survivorship clause, banks may require consent of surviving depositor(s) and legal heirs, in line with their policy and the Directions.
Documentation, standard forms and process
To ensure uniform practice across banks and branches, the Directions mandate use of standardised forms and clear, published document lists.
Standardised forms (Annexes)
Banks must adopt and make available the RBI‑prescribed forms, including at least the following.
- Annex I‑A: Claim form for accounts with nomination/survivorship clause.
- Annex I‑B: Claim form for accounts without nomination/survivorship clause (legal heirs).
- Annex I‑C: Indemnity bond form where simplified settlement is used without court order.
- Annex I‑D: Letter of disclaimer/no‑objection from other legal heirs.
- Additional annexes for locker claims, safe custody articles, missing persons and special situations.
These forms must be:
- Available at all branches and downloadable from banks’ websites, free of charge.
- Explained in simple language so that claimants understand their rights and obligations.
End‑to‑end process flow
While the detailed internal process may vary, RBI expects banks to adhere to a uniform, customer‑friendly process.
Broad steps:
- Claim lodgment at any branch, irrespective of the home branch of the account.
- Immediate written acknowledgment of the claim, indicating date of receipt and expected TAT.
- Scrutiny of documents, verification of claimant’s identity and checks for any court orders, liens or regulatory restraints.
- Communication of deficiencies, if any, within a short period so that claimants can rectify them without losing time.
- Final settlement by crediting claimant’s account, issuing pay order or otherwise releasing proceeds within 15 calendar days from the date of receipt of complete, compliant documents.
Timelines, compensation and customer protection
The hallmark of the uniform framework is the explicit, enforceable timeline for settlement combined with disincentives for delay.
Fifteen‑day settlement requirement
RBI directs that:
- Banks settle claims in respect of deposit accounts of deceased customers within 15 calendar days from the date of receipt of the claim together with all required documents.
- For lockers and safe‑custody articles, banks must process claims and fix a date for inventory and release within a similar 15‑day window.
This is consistent with earlier RBI guidance, which also required settlement of deceased depositors’ claims within 15 days subject to receipt of proof of death and proper identification of claimants.
Compensation for delay
To discourage procedural delays, the Directions introduce explicit compensation norms.
- If a bank fails to settle a claim within the stipulated 15‑day period without valid, documented reasons, it must compensate the claimant, typically by paying interest at a specified rate for the period of delay.
- The exact methodology and rate of such compensation must be part of the bank’s board‑approved policy and disclosed to customers.
Board oversight and disclosure
RBI emphasises governance and oversight over claim settlement processes.
- Banks must place periodic statements before their Boards or designated committees on:
- Volume and value of claims received and settled.
- Average time taken and instances of delay beyond 15 days.
- Complaints and litigations arising from deceased customers’ claims.
- Banks must disclose, on their websites:
- Step‑by‑step procedures for various claim scenarios.
- Document checklists and thresholds for simplified procedures.
- Contact points for grievance redressal and escalation to Banking Ombudsman, where applicable.
Practical implications for banks and customers
The uniform framework has significant operational and customer‑service implications that banks must address through policy, process and system changes.
Implications for banks
Banks need to:
- Update internal policies, SOPs and manuals to align with the 2025 Directions and withdraw conflicting internal instructions
- Configure systems to:
- Track TAT for each claim and flag imminent breaches of the 15‑day deadline.
- Automate interest/compensation calculation where delays occur.
- Train branch and call‑centre staff on:
- Differentiating scenarios (with nominee, without nominee, Will, missing person, lockers, safe custody).
- Using standard forms and communicating document requirements clearly to customers.
- Strengthen record‑keeping for nominations and survivorship mandates to minimise disputes and speed up settlement.
Implications for customers and legal heirs
For customers’ families and legal heirs, the new Directions aim to drastically reduce uncertainty and delays.
- Nominees and survivors can expect settlement of deposit claims within 15 days once basic documents are submitted, without routine insistence on succession certificates in straightforward cases.
- Legal heirs of depositors without nomination/survivorship clause benefit from a simplified, threshold‑based process that avoids the cost and time of court proceedings for small‑value claims.
- Public disclosure of procedures and documents reduces information asymmetry and helps families prepare and file complete claims at the first instance.
Overall, the RBI circular and the 2025 Directions move the system from discretionary, bank‑specific practices to a uniform, rights‑based framework for settlement of deceased customers’ deposits and related claims.
