The Reserve Bank of India (RBI) has announced new rules that will make it easier and faster for families of deceased bank customers to settle claims.
According to the revised guidelines, banks must now settle claims related to deceased customers' accounts and lockers within 15 days. The RBI has also directed banks to compensate nominees if there is a delay in settlement.
Key Highlights
- RBI mandates banks settle deceased account claims within 15 days; delays incur compensation.
- Nominees no longer need legal documents like succession certificates for claims under ₹15 lakh.
The new framework was introduced to eliminate the confusion caused by different practices used by banks previously. The RBI stated that banks must not require legal documents such as succession certificates, letters of administration, or probate of will when making payments to nominees or survivors.
Similarly, banks cannot seek indemnity or surety bonds from nominees or survivors, regardless of the amount in the deceased customer's account.
Settlement In Cases Without A Nominee Or Will
Banks will be allowed to settle claims of up to Rs 5 lakh for co-operative banks and Rs 15 lakh for other banks in cases where the account does not have a nominee, will, or contesting claims.
Claimants will need to submit a simple RBI-specified form, the deceased's death certificate, and verified identification documents.
Banks will also require an indemnity bond from the claimant and, if necessary, a no objection letter from other legal heirs. A legal heir certificate issued by a competent authority, or a declaration signed in the RBI's specified format by an independent person well known to the deceased's family, can also be accepted.
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Claims above RBI limits
If the claim amount exceeds the specified limits, additional documentation will be required. These include the succession and death certificates, the claimant's verified identity, an indemnity bond, and a letter of no objection from non-claiming heirs.
If no succession certificate is available, claimants may submit an affidavit in the RBI's format, sworn before a notary or judge by an independent person familiar with the family.
Cases involving a will or beneficiaries
When there is a will but no surviving nominee, or when a person other than a legal heir is named as the beneficiary, banks must obtain all relevant documents from the beneficiary. If there are disagreements among legal heirs or beneficiaries, claims will only be settled through a court order such as a probate of will, letter of administration, succession certificate, or decree.
If a court has issued an order preventing the bank from making payments, the claims will not be processed until the order is lifted. The RBI clarified that settlements can only be made after receiving a subsequent court directive.
The RBI has also permitted banks to allow the premature closure of deceased customers' term deposits without incurring any penalties, even if the deposits are still within the locked-in period.
The central bank has asked all banks to implement these new procedures by March 31, 2026. These measures are intended to reduce the stress experienced by the families of deceased account holders while also bringing more consistency to how banks handle similar claims.
