The Union Cabinet has given its approval to several amendments in banking regulations , significantly impacting how nominees are managed in deposit accounts. The revised rules will permit up to four nominees per account and introduce provisions for both “successive and simultaneous” nominations. These changes aim to tackle the issue of unclaimed deposits and simplify the process for account holders and their beneficiaries.
Read More: Types of Savings Account: How to Save Smartly and Securely
Currently, savings and fixed deposit accounts are restricted to a single nominee. The new regulations will allow multiple nominees , facilitating smoother transfers of funds from insurance and HUF accounts even after the account holder’s death. Joint account holders and heirs will benefit from this update, ensuring that funds are accessible in a more organized manner.
Additionally, the Public Provident Fund, managed by the Central Government, will see an increase in the number of allowable nominees. Specific details will be clarified when Finance Minister Nirmala Sitharaman presents the bill in Parliament. As of now, there is little information available from government sources regarding the specifics of these changes.
Sitharaman has previously highlighted the problem of unclaimed funds, urging financial institutions to address the issue. Despite efforts to resolve claims, unclaimed deposits surpassed Rs 78,000 crore by the end of March 2024. A new proposal suggests amending the law to allow the transfer of unclaimed dividends and bonds to the Investor Education Protection Fund (IEPF), expanding beyond the current practice of transferring only bank shares.
Read More: ‘Fake News’: PIB On Reports Claiming RBI Will Impose Penalty For Multiple Bank Accounts
The upcoming bill also proposes adjustments to regulatory compliance reporting dates for banks, shifting from the second and fourth Fridays to the 15th and the last day of each month. Cooperative banks will also benefit from the bill, which will extend the tenure for appointing directors to up to 10 years, as well as introduce new provisions for non-chairman directors.
