4 Nominees Per Bank Account: India's New Rule Explained

If you have ever heard of a family fighting a bank for years to claim a dead relative's savings, you know why the nominee column on your account matters far more than it looks. From 1 November 2025, India quietly rewired this corner of banking: under the Banking Laws (Amendment) Act, 2025, you can now name up to four nominees on a single deposit account, locker or safe-custody item — instead of just one. It is a small administrative change with outsized consequences for how money moves to the next generation.

For decades, the one-nominee limit created a brittle single point of failure. If that lone nominee died before you, or simply could not be traced, the money often slid into limbo. The new rule is built to fix exactly that — and most account holders should act on it rather than ignore it.

Why the four-nominee rule was needed

The trigger is a number that has long embarrassed the banking system: the mountain of unclaimed deposits sitting idle because no one stepped forward to claim them. A large share of these are accounts where the depositor died and the nomination chain broke down.

A single nominee is fragile by design. Name your spouse alone, and if you both pass in the same accident, the account has no valid nominee at all. The heirs are then thrown into a slow paper-chase of succession certificates and legal heir affidavits. Allowing four nominees builds in redundancy and lets you split assets the way a real family is structured — across a spouse and children, for instance.

Simultaneous vs successive: the two modes that matter

The heart of the new system is that nomination now comes in two flavours, and choosing the right one is the single most important decision you will make on the form.

• Simultaneous nomination: All your nominees are active at the same time, and you assign each a percentage share that must add up to 100%. For example, 50% to your spouse and 25% each to two children. On your death, the bank releases each person's slice directly. This option is available for deposit accounts only.
• Successive nomination: You rank nominees in order — first, second, third, fourth. The next person in line becomes relevant only after the one above them has died. There are no percentages here; the senior surviving nominee steps in.

The distinction is not cosmetic. Simultaneous nomination is ideal for splitting savings cleanly among several people. Successive nomination is about continuity — ensuring the account always has somebody who can claim it, no matter who outlives whom.

Lockers and safe custody work differently

Here is a catch many people will miss. For a bank locker or a safe-custody article, you can still name up to four people, but only successive nomination is allowed — you cannot assign percentage shares to locker contents.

The logic is practical. Physical items in a locker — jewellery, property papers, bonds — cannot be neatly carved into "25% of a necklace." So the law keeps lockers on a strict rank order: the highest-ranked surviving nominee gets access, and it is then up to the heirs and the will to divide the contents.

A nominee is still NOT the owner

This is the most misunderstood part of nomination in India, and it does not change under the new Act. A nominee is a trustee, not an heir. When the bank hands over the money, the nominee is legally obliged to pass it on to the rightful legal heirs as determined by your will or by succession law.

In other words, naming your eldest child as the sole 100% nominee does not disinherit your other children. The nominee simply becomes the authorised receiver who simplifies the bank's job; the question of who keeps the money is settled separately. The cleanest setup is to align your nominations with a properly drafted will so the two never contradict each other.

The other big change: a ₹2 crore threshold

Nomination grabbed the headlines, but the same Act tucked in a second reform worth knowing. The definition of "substantial interest" — used to govern directorships and certain conflict-of-interest rules in banking — was raised from a figure of ₹5 lakh, fixed generations ago, to ₹2 crore.

That old ₹5 lakh ceiling was set in an era when it actually meant something; inflation had long made it almost meaningless. The revision modernises corporate-governance triggers inside banks and gives boards room to adjust the figure further over time. It does not affect ordinary depositors directly, but it signals that the broader law was overdue for a cleanup.

What you should actually do now

The rule is live, but your bank will not silently add three extra nominees to your decades-old savings account. The onus is on you. A quick, practical checklist:

1. Audit every account. List your savings accounts, fixed deposits, recurring deposits and lockers, and check which ones have any nominee at all. Surprisingly many older accounts have none.
2. Decide the mode. Use simultaneous nomination with clear percentages where you want to split money; use successive for a backup chain and for all lockers.
3. Submit fresh forms. Banks are rolling out updated nomination forms; you can usually do this in-branch and, increasingly, through net banking. Keep the acknowledgement.
4. Match it to your will. Ensure your nominee shares and your will tell the same story. Mismatches are what trigger family disputes later.
5. Review after life events. Marriage, a birth, a death or a divorce should each prompt a nomination update — it takes minutes and saves years.

Why this is a bigger deal than it looks

Most reforms that make news involve interest rates or big-ticket policy. This one is about friction — the quiet, painful kind that families hit at the worst possible moment. By letting you spread risk across four nominees and choose between sharing and succession, the law turns a single fragile link into a resilient chain.

It will not, on its own, replace a will or end inheritance disputes. But it dramatically lowers the odds that your savings end up frozen in a vault of unclaimed deposits while your family fills out forms. Spend ten minutes updating your nominations — it is one of the highest-return paperwork tasks you will do all year.