By C. K. Subramaniam
Ex-Banker | Over 30 Years of Experience in Claim Settlement
Crux of Claim Settlement
Claim settlement of bank deposits is one of the most important services provided by banks. However, many families are not aware of the procedure to be followed when they have to claim the money lying in the bank accounts or deposits of a departed family member. This often results in unnecessary delays, repeated bank visits, and avoidable confusion.
At this stage, many people are unsure about the procedure. Some believe that the bank will automatically release the money to the spouse or children. Others think that if there is a nominee, the matter ends there. In reality, the process is a little different.
Why Claim Settlement Awareness Is Important
According to the Ministry of Finance, Government of India, Public Sector Banks had transferred ₹60,518 crore of unclaimed deposits to the Reserve Bank of India’s Depositor Education and Awareness (DEA) Fund as on 31 January 2026. To help citizens recover such financial assets, the Department of Financial Services, in collaboration with the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), and Insurance Regulatory and Development Authority of India (IRDAI), launched the nationwide “Your Money, Your Right” campaign. As on 28 February 2026, the campaign had facilitated the settlement of 22.95 lakh claims, resulting in the return of ₹5,777 crore to rightful claimants. These figures highlight the importance of maintaining updated nominations, informing family members about bank accounts, and understanding the claim settlement process.
References
Ministry of Finance, Government of India. “Your Money, Your Right” Nationwide Awareness Campaign (Press Information Bureau, October–December 2025).
Ministry of Finance, Government of India. RBI, IRDAI and SEBI Intensify Measures to Help Citizens Reclaim Unclaimed Deposits (Press Information Bureau, 24 March 2026).
Banks must follow the provisions of the Banking Regulation Act, 1949, the Banking Companies (Nomination) Rules, 1985, the applicable succession laws, and the guidelines issued by the Reserve Bank of India (RBI).
Knowing the basic procedure can save the family unnecessary delays, repeated bank visits, and avoidable disputes.
Many customers ask a simple question:
“The bank knows us. Why can’t it release the money immediately?”
The answer is equally simple. A bank cannot release money merely because someone claims to be a family member. It has to ensure that the payment is made to the right person.
At the same time, RBI has advised banks to keep the procedure simple and avoid asking for unnecessary documents. The idea is to protect the customer’s money without causing hardship to the family.
The First Step
The first step is to inform the bank about the account holder’s demise. Normally, the nominee or one of the legal heirs submits a written request along with the Death Certificate.
After verifying the documents, the bank records the information and starts the claim process. What happens next depends on:
- Whether there is a nominee.
- Whether the account is held jointly.
- The operating instructions given when the account was opened.
Understanding Nomination
Nomination is one of the most useful facilities available to bank customers, but unfortunately it is also one of the least understood.
Every depositor can nominate a person to receive the deposit after his or her lifetime. This simple step makes claim settlement much easier.
However, one important point must be understood: a nominee is not always the owner of the money.
The bank can release the deposit to the nominee after completing the required formalities. This protects the bank and allows quick settlement. However, if other legal heirs have a lawful claim under the applicable succession law, their rights do not automatically end.
In simple words: the nominee receives the money from the bank, while the final ownership is determined according to the applicable inheritance laws.
Multiple Nominees from 1 November 2025
From 1 November 2025, bank depositors can nominate up to four persons for their deposit accounts.
The nominees can be appointed either:
- Successively – one after another in the order specified by the depositor.
- Simultaneously – all nominees together in the percentage shares specified by the depositor.
Up to four nominees can be appointed either simultaneously (with specified percentage shares) or successively (in order of priority).
Safe Deposit Lockers
Up to four nominees can also be appointed for safe deposit lockers, but only successively. Simultaneous nomination is not permitted for lockers.
The second nominee becomes entitled only if the first nominee is not alive, and so on.
This change is expected to reduce disputes and make claim settlement easier for families.
When There Is No Nomination
Even if there is no nomination, the family should not panic.
The legal heirs can still claim the money by submitting the documents required by the bank.
Depending on the amount involved and the bank’s policy, the bank may ask for an indemnity, an affidavit, or other supporting documents.
Only in complicated cases, such as disputes among legal heirs or doubtful claims, may the bank ask for documents like a Succession Certificate, Probate, or Letters of Administration.
RBI has clearly advised banks not to insist on a Succession Certificate in every case. Genuine claims should be settled through a simple and customer-friendly process wherever possible.
Joint Accounts
If the account is under the “Either or Survivor” mandate, the surviving account holder can normally receive the balance without much difficulty.
The same principle generally applies to accounts operated under “Former or Survivor” or “Anyone or Survivor” instructions.
However, if the account requires joint operation, the procedure may be different and additional formalities may be required.
It is important to remember that payment to the surviving account holder enables the bank to settle the account according to the account mandate. However, it does not automatically determine the ultimate ownership of the money.
The rights of any legal heirs continue to be governed by the applicable succession laws.
Safe Deposit Lockers
The procedure for a safe deposit locker is different from that of a deposit account.
If the locker has a valid nomination or is held jointly with survivor instructions, the bank allows access to or releases the contents after completing the prescribed formalities.
Where there is no nomination or survivor clause, the bank may require additional documents depending on the circumstances and the applicable law.
RBI has also issued detailed guidelines to ensure that genuine claimants are not subjected to unnecessary hardship.
Documents Generally Required
Although the exact requirements may differ from one bank to another, the following documents are generally required:
- Death Certificate
- Claim Form
- Identity and address proof of the claimant
- KYC documents of the claimant, wherever applicable
- Passbook or Fixed Deposit Receipt
- Indemnity or affidavit, wherever required
- Other legal documents only when the circumstances of the case demand them
RBI Guidelines to Banks
Over the years, RBI has taken several steps to make claim settlement easier for customers.
Banks have been advised to:
- Have a Board-approved policy for claim settlement.
- Keep the procedure simple and transparent.
- Avoid asking for unnecessary documents.
- Settle genuine claims without delay.
- Display the procedure clearly for customers.
- Deal with family members in a fair and sensitive manner.
Although RBI has not prescribed a uniform number of days for settlement of every type of claim, banks are expected to settle genuine claims without undue delay in accordance with their Board-approved policy.
Most banks have also prescribed internal timelines for straightforward claims to ensure prompt settlement.
The objective is clear—protect the customer’s money without putting the family through unnecessary hardship.
What Every Depositor Should Do
- Register a nominee in every deposit account.
- Review the nomination whenever there is a major change in the family.
- Keep your KYC details updated.
- Tell your family about your bank accounts and investments.
- If you have substantial assets, consider making a valid Will.
- Keep important banking papers where your family can easily find them.
Claim settlement is not meant to be a difficult process. Most claims are settled smoothly when the required documents are submitted and the account has a proper nomination.
Customers also have an important role to play. A simple nomination made today can save the family from unnecessary inconvenience tomorrow.
Equally important is understanding that a nominee and a legal heir are not always the same.
A little awareness about these basic rules can make the entire process faster, smoother, and free from avoidable disputes.
Author
C. K. Subramaniam
Ex-Banker – Settled bank claims by following statutory guidelines for over 30 years.
- Proper heading hierarchy (H1/H2/H3)
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- Corrected spelling, punctuation, and grammar
- No change to the substance or legal meaning of the article.
