No, appointing a nominee for a bank account is not generally a legal requirement for keeping or opening a bank account in India. However, nomination is an important banking facility that can make the process of settling the account balance after the account holder’s death considerably simpler. Banks are expected to offer nomination facilities, but customers can choose whether to make a nomination.
The distinction between legally necessary and financially useful is important. A bank account can exist without a nominee, but the absence of nomination may make the process of claiming the deceased person’s balance more complicated for the family.
What Is a Bank Account Nominee?
A nominee is a person designated by the account holder to receive the money or deal with the deposit after the account holder’s death, subject to the applicable banking and succession rules.
Nomination is particularly relevant for savings accounts, fixed deposits and other eligible deposit accounts. Under the Banking Regulation Act, banks can make payment of a deceased depositor’s balance to the nominee in accordance with the prescribed procedure.
The purpose is primarily to provide a smoother mechanism for the bank to settle the deceased customer’s account rather than requiring the bank to determine competing inheritance claims.
Is Nomination Compulsory?
Generally, no.
RBI instructions have long required banks to make nomination facilities available and encourage customers to use them. At the same time, the framework recognises situations where a customer chooses not to nominate. RBI instructions state that nomination should generally cover accounts unless the customer prefers not to nominate, in which case that preference may be recorded.
Therefore, not having a nominee does not by itself make an ordinary bank account illegal or invalid.
However, banks may strongly encourage customers to nominate someone because it can simplify settlement after death.
What Happens If the Account Holder Dies Without a Nominee?
If there is no nomination, the bank still has a process for settling the deceased customer’s balance.
The legal heirs may need to provide documents establishing their entitlement, depending on the circumstances and the bank’s applicable procedure. These can include the death certificate, identity documents, proof of relationship and, where required, succession-related documents.
RBI has directed banks to adopt simplified procedures for deceased accounts and avoid unnecessary insistence on legal representation where a valid nominee or survivor is available.
Without a nominee, however, settlement can become more document-intensive, particularly where there are multiple heirs or disagreement regarding entitlement.
Does a Nominee Become the Owner of the Money?
This is an important distinction.
A nominee’s role in receiving money from the bank should not automatically be confused with the ultimate inheritance of the money.
Indian courts have traditionally distinguished between the right to receive the deposit from the bank and the ultimate right to the deceased person’s estate under succession law. The Supreme Court’s interpretation of Section 45ZA has treated nomination as giving the nominee the right to receive the deposit, while succession rights can remain relevant between the nominee and legal heirs.
RBI’s deceased-depositor framework similarly states that payment to a nominee is made without affecting the rights or claims that other persons may have against the recipient.
Therefore, appointing a nominee should not automatically be treated as equivalent to making a Will.
Can You Appoint More Than One Nominee?
Yes. The rules have changed significantly.
From 1 November 2025, amendments under the Banking Laws (Amendment) Act, 2025 allow depositors to nominate up to four persons for deposit accounts, either simultaneously or successively.
With simultaneous nomination, the depositor can specify the percentage of the deposit allocated to each nominee, subject to the statutory requirements. With successive nomination, nominees are arranged in an order of priority, so the next nominee becomes relevant according to the prescribed rules.
This gives account holders more flexibility when planning how the bank should handle the deposit after their death.
Is Nominee Necessary for a Joint Bank Account?
Not always.
Joint accounts can have operating instructions such as “either or survivor” or other survivorship arrangements. In such cases, the surviving account holder may have rights to operate or receive the balance according to the account mandate and applicable rules.
Where all joint depositors die, nomination can become relevant. RBI guidance has historically clarified that the nominee’s right in a joint deposit arises after the death of all depositors.
Therefore, customers should check both the account operating mandate and the nomination status rather than assuming that one automatically replaces the other.
Can a Nomination Be Changed?
Yes.
A depositor can generally cancel or vary a nomination by following the prescribed banking procedure. This is useful when family circumstances change, such as marriage, divorce, birth of a child or changes in estate planning.
Customers should keep their nomination information updated rather than assuming that an old nomination will always reflect their current wishes.
Why Should You Consider Adding a Nominee?
Although nomination is generally not mandatory, it can provide practical advantages:
- It can simplify settlement after death.
- It can reduce unnecessary delays and paperwork.
- It tells the bank whom it may pay under the nomination framework.
- Multiple nominees are now permitted for eligible deposits.
- It can make the deceased account settlement process easier for family members.
However, nomination should be coordinated with broader estate planning, particularly where significant assets or multiple legal heirs are involved.
What If You Do Not Want to Nominate Anyone?
A customer can generally choose not to nominate. The bank may record that preference according to its procedure.
This does not mean that the money becomes ownerless or that legal heirs lose their rights. Instead, after the account holder’s death, the bank will follow the applicable procedure for settling the balance with the persons legally entitled to claim it.
Conclusion
A bank account nominee is generally not legally mandatory in India, but nomination is a useful facility for smoother settlement after the account holder’s death. Not having a nominee does not invalidate the account, although it may increase documentation or procedural requirements for the family.
Since 1 November 2025, eligible depositors can nominate up to four persons, either simultaneously or successively, giving customers greater flexibility.
The most important point is to understand that a nominee’s role in receiving money from the bank and the ultimate inheritance of that money are not necessarily the same. For substantial assets, nomination should therefore be considered alongside a properly prepared Will and applicable succession rules.
