Centre Notifies Enforcement of Key Nomination Related Provisions of Banking Laws (Amendment) Act, 2025 From November 1

The 2025 Amending Act, which was first notified on April 15, 2025, prescribed amendments in the Reserve Bank of India Act, 1934; Banking Regulation Act, 1949; State Bank of India Act, 1955; and Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and 1980.

The Central Government notification stated that Sections 10, 11, 12, and 13 of 2025 Amending Act shall come into force on November 1, 2025.

Section 10 of the 2025 Amending Act amends Section 45ZA of the Banking Regulation Act, 1949. Earlier, sub-section (1) of Section 45ZA provided that where a deposit is held by a banking company to the credit of one or more persons, the depositor or all depositors together, may nominate one person to whom in the event of the death of the sole depositor or the death of all the depositors, the amount of deposit may be returned by the banking company. However, vide the amendment introduced by Section 10, the words “one person” are substituted by “one or more persons not exceeding four, either successively or simultaneously”. This enables the depositor to nominate more than one person to receive the amount of deposit in the unfortunate event of death of the depositor.

Section 10 further adds Section 45ZA(1A)― which provides that when nominations are made successively, only one nominee shall be recognised at a time, following the priority set out in Section 45ZG; and 45ZA(1B)― which allows simultaneous nominations in favours of upto four persons, provided the person making the deposit specifies the percentage share of each nominee.

Section 11 of the 2025 Amending Act amends sub-section (1) of Section 45ZC of the 1949 Act. Earlier, the sub-section prescribed that where any person leaves any article in safe custody with a banking company, such person may nominate one person to whom, in the event of the death of the person leaving the article in safe custody, such article may be returned by the banking company. However, vide the amending Section 11 of the Banking Laws (Amendment) Act, 2025, the words “one person” is substituted by “one or more persons not exceeding four, successively,”.

Section 12 of the 2025 Amending Act amends sub-section (1) of Section 45ZE of the 1949 Act which deals with release of contents of lockers. Prior to the amendment, sub-section (1) provided that where an individual is the sole hirer of a locker from a banking company, such individual may nominate one person to whom, in the event of death of such individual, the banking company may give access to the locker and liberty to remove the contents of the locker. However, the 2025 Amending Act widens the scope of the sub-section, which is now substituted. The new sub-section enacts― “Where one or more individuals hire a locker from a banking company, whether such locker is located in the safe deposit vault of such banking company or elsewhere, the individual or, as the case may be, all the individuals together, may nominate one or more persons not exceeding four, successively, to whom, in the event of the death of the sole hirer or the death of all the hirers, the banking company may give access to the locker and liberty to remove the contents of the locker.”

Lastly, Section 13 of the the 2025 Amending Act inserts a new Section 45ZG in the Banking Regulation Act, 1949. The section prescribes that where a person makes a successive nomination under Section 45ZA(1), 45ZC(1) or Section 45ZE(1), the nomination takes effect only in favour of one person in order of the following priority― nomination of the first nominee shall be effective if they survive the person/persons who made the nomination; if the first nominee has died, the second nominee's nomination shall become effective. Consequently, the sequence prescribes that each lower nominee's nomination becomes effective only after the death of those named before them. Sub-section (2) of Section 45ZG enacts that if the order of priority is not specified, the nominees will be treated as nominated in the sequence in which their names appear in the nomination form. However, as per sub-section (3), provisions of the section do not apply to the nominations made simultaneously in favour of more than one person under Section 45ZA(1).