RBI Notifies Standardised Procedure for Settlement of Claims of Deceased Bank Customers

The Reserve Bank of India (RBI), through its Department of Regulation, issued a notification dated September 26, 2025, announcing the “Reserve Bank of India (Settlement of Claims in respect of Deceased Customers of Banks) Directions, 2025.”

These new directions aim to create a uniform and simplified procedure across all banks for settling claims related to deposit accounts, safe deposit lockers, and articles in safe custody of customers who have passed away.

Under the new guidelines, the RBI has sought to reduce hardship for the family members, nominees, or legal heirs of deceased customers and ensure faster and hassle-free claim settlements. The directions require all commercial banks and co-operative banks to adopt these procedures by March 31, 2026.

These rules will not apply to government savings schemes such as the Public Provident Fund (PPF) or Senior Citizens Savings Scheme (SCSS), which are governed by their own rules.

According to the notification, if a nominee has been registered or the account has a survivorship clause (like “either or survivor”), the payment to the nominee or survivor will be considered a full discharge of the bank’s liability. In such cases, the bank cannot demand legal documents such as a succession certificate or probate of will. The nominee simply needs to submit:

• A claim form (in the prescribed format),
• The death certificate, and
• A valid identity proof.

The nominee or survivor will receive the money as a trustee of the legal heirs, meaning others can still claim their rightful share later.

If there is no nomination or survivorship clause, the RBI has set a simplified procedure for small amounts.

• For commercial banks, this applies to claims up to ₹15 lakh,
• For co-operative banks, up to ₹5 lakh.

In such cases, the legal heirs can settle the claim by submitting:

• The claim form,
• Death certificate,
• Identity proof,
• An indemnity bond,
• And a legal heir certificate or declaration by a well-known independent person.

Banks cannot insist on sureties for these small claims.

For claims above the threshold limit, the claimant must provide legal documents such as a succession certificate or court order. If the deceased has left a Will, and there is no dispute, banks may settle as per the Will; otherwise, they must wait for a court order or probate.

The directions also cover cases where the customer is missing. In such cases, if the court declares the person civilly dead, the claim can be settled like that of a deceased customer. For small amounts below Rs. 1 lakh, the bank may accept a police FIR and non-traceable report instead.

For lockers and safe custody articles, the nominee or survivor can access and remove the contents after submitting the required documents. The bank must prepare an inventory in the presence of witnesses. No legal documents are required if the nomination is clear and undisputed.

To ensure timely settlement, banks must:

• Settle deposit account claims within 15 calendar days of receiving all documents.
• Fix a date for locker inventory within 15 days for locker-related claims.

If a bank delays settlement:

• It must pay interest at Bank Rate + 4% per annum for deposit claims.
• It must pay ₹5,000 per day for delay in locker claim processing.

RBI has also asked banks to:

• Publish claim forms, document checklists, and procedures on their websites,
• Make forms available in branches,
• And spread public awareness about the importance of nominations.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates