Settlement of Claims in Respect of Deceased Account Holders: RBI Guidelines 2025

When someone passes away, it is not easy for the family to think about paperwork or money matters. But often, one of the first things they need to handle is how to access the money in the person’s bank account. To make this process smoother for everyone, the Reserve Bank of India has brought out the 2025 Directions. These new rules aim to make it easier for families and legal heirs to settle claims while ensuring banks follow a clear and compassionate procedure.

Regulatory Scope and Purpose

The 2025 Directions apply to all commercial and cooperative banks but not to government-backed schemes such as PPF or SCSS, which are governed by their separate procedures. The intention is to standardize documentation, expedite processing, and minimize hardship for survivors, nominees, and heirs. Section 45ZA-45ZF of the Banking Regulation Act serves as the legal foundation, allowing nomination and survivorship facility in deposit relationships.?

Claim by Nominee or Survivor: The Streamlined Path

If the account holder appointed a nominee or if the account is governed by a survivorship clause (“either or survivor,” etc.), the claim process is unequivocally straightforward. In such instances, banks are mandated to:

• Accept the claim from nominee(s) or surviving account holder(s) as a full and valid discharge of liability.
• Not demand a succession certificate, probate, indemnity bond, or other legal documentation, regardless of the account balance.
• Ensure only minimal documentation: a filled claim form (Annex I-A), the death certificate, and officially valid ID proof of the nominee or survivor.

Importantly, the bank must record in writing that the payment or release is made in trust for all legal heirs, not as an adjudication of succession rights. No payment is to be made if a court order prohibits it, and the nominee acquires proceeds as trustee of the legal heirs.?

Absence of Nominee or Survivorship Clause: Simplified Claims up to the Threshold

Where there is no nominee or survivorship clause, the Directions now codify a “simplified procedure” for claim amounts under the prescribed thresholds—15 lakh for commercial banks and ?5 lakh for cooperative banks. The documentation required comprises:

• Claim form (Annex I-B) signed by all claimants.
• Death certificate.
• Officially valid identity proof.
• Bond of indemnity (Annex I-C) executed by the claimants.
• Letter of disclaimer/no objection (Annex I-D) from non-claimant legal heirs.
• Legal heir certificate from a competent authority OR an affidavit/declaration by an independent person regarding legal heirs (Annex I-E).

The key distinction for this streamlined path is that the bank shall not demand a third-party surety for such claims. The aim is to relieve legal heirs of avoidable court proceedings in cases where the amount is modest and uncontested.?

Above-Threshold and Disputed Cases

For claims exceeding the monetary threshold or where the estate is contested, additional rigour applies:

• Succession certificate, probate, letter of administration, or court decree is required.
• Banks may insist, at their discretion, on indemnity bonds by third-party sureties (including non-claimant legal heirs).
• Affidavits regarding heirship must be sworn before a judicial magistrate or notary for above-threshold claims.

In cases involving a will, if undisputed, banks may proceed without a probate provided the will’s genuineness is established and all beneficiaries/legal heirs agree. If there is any dispute among heirs, banks must insist on probate or relevant court orders before settling the claim.?

Settlement of Claims in Lockers and Safe Custody Articles

Similar procedures apply to safe deposit lockers and safe custody holdings. Where a nominee or survivorship clause exists, the claimant may access and empty the locker after a formal inventory (in the presence of the claimant, two witnesses, and designated bank officials). Banks are to accept the standard claim forms and documents, and again, legal documents are not to be insisted upon barring disputes or inconsistent nominations. The approach for claims without nomination mirrors the deposit process section above.?

Special Situations: Minor Nominees, Foreign Deaths, and Missing Persons

• Where the nominee is a minor, the guardian (as noted in the nomination form) may act on behalf of the minor.
• If the customer died abroad, banks must accept death certificates duly apostilled, consularised, or certified by relevant authorities.
• Claims relating to missing persons require either a court declaration of civil death or, for claims under ?1 lakh (or higher, as per bank discretion), an FIR and non-traceable police report may suffice.?

Operational Mandates: Timelines, Acknowledgment, and Compensation

Banks are required to:

• Accept claims at any branch and issue an acknowledgment of receipt.
• Confirm in writing if the claim is complete or specify pending documentation.
• Settle all valid claims within 15 calendar days of receiving all documents.
• Pay compensation for bank-attributable delays: interest equal to at least the prevailing Bank Rate on deposit claims, or ?5,000 per day for delayed access to safe deposit lockers or safe custody articles.

Further, banks must make all claim forms and process details available at every branch and on their websites. There is even a mandate for banks to accept online lodgement of claims, with responsive tracking and confirmation for depositors’ families.?

Concluding Remarks

The 2025 Directions signal a welcome step towards procedural certainty, transparency, and customer-centricity in banking. At heart, the Directions seek not only to streamline settlements in the wake of bereavement but to grant families the dignity of timely access to their rightful entitlements, while providing protections for all parties. Legal professionals and claimants alike must remain mindful of these detailed procedures—both as a matter of regulatory compliance and ethical responsibility.?