Reserve Bank of India (Settlement of Claims in respect of Deceased Customers of Banks) Directions, 2025

The Reserve Bank of India has issued the Settlement of Claims in respect of Deceased Customers of Banks Directions, 2025 to bring uniformity, transparency, and efficiency in how banks handle claims after the death of a customer. These Directions apply to all commercial and co-operative banks and must be fully implemented by March 31, 2026.

For deposit accounts with a valid nomination or survivorship clause, banks are required to release the balance to the nominee(s) or surviving account holder(s) after verifying their identity and the death certificate. In such cases, banks cannot insist on legal documents such as succession certificates, probate, or bonds of indemnity, regardless of the amount involved. The nominee or survivor is, however, informed that they act as a trustee for the legal heirs.

For accounts without nomination or survivorship clause, the procedure depends on the value of the claim. Where the claim amount is within the threshold (₹15 lakh for commercial banks and ₹5 lakh for co-operative banks), banks must follow a simplified procedure. This requires the claimant to submit a claim form, death certificate, identity proof, indemnity bond, a no-objection/disclaimer from other heirs, and a legal heir certificate or declaration. No third-party surety is required. For claims above the threshold, banks may require additional documents such as a succession certificate, affidavit, or surety bond.

Where the deceased has left a Will, banks may settle the claim based on probate, letter of administration, or other acceptable legal documents. If the Will is uncontested and its genuineness is clear, settlement may also be done without probate at the bank’s discretion. In cases of disputed claims or where court orders exist, settlement will only be carried out on the basis of valid court orders, succession certificates, or probates.

For term deposits, banks must permit premature termination in the event of the depositor’s death without charging any penalty, even if the lock-in period has not expired. In the case of joint deposits, survivors may prematurely withdraw the deposit if a specific mandate exists. Otherwise, consent of both survivors and the legal heirs of the deceased is required.

In cases where the customer is a missing person, claim settlement requires a court order declaring civil death under the Bharatiya Sakshya Adhiniyam, 2023. However, if the claim is ₹1 lakh or below (or a higher limit fixed by the bank), settlement may be allowed on the basis of a police FIR and a non-traceable report instead of waiting for a court declaration.

For safe deposit lockers and safe custody articles, banks must allow access to nominee(s) or survivor(s) upon submission of the claim form, death certificate, and proof of identity. Inventories of contents are prepared in the presence of claimants and witnesses, after which the contents are released. In such cases too, banks cannot demand legal documents unless disputes exist. If no nomination or survivorship clause is available, settlement follows a simplified procedure involving indemnity bonds, disclaimers from other heirs, and legal heir certificates.

Banks are also required to display procedures and forms publicly at branches and on their websites and to provide standardized claim forms. Claims must be settled within 15 calendar days of receiving all required documents. Delays attract compensation which is interest at Bank Rate plus 4% per annum for deposit accounts and Rs. 5,000 per day for lockers and safe custody articles.

Overall, these directions ensure that nominees, survivors, or legal heirs face minimal hardship in accessing funds and assets of deceased account holders, while balancing the need for legal safeguards and preventing unnecessary insistence on succession documents in clear-cut cases.

For more details, read here: https://caalley.com/rbi25/NT82880281BD5EB444BFAE554F1C816B3376.pdf