The Reserve Bank of India has rolled out a new framework aimed at simplifying and expediting the process of claim settlement for deceased account holders. This step comes after years of confusion caused by different practices adopted by banks, often leaving grieving families struggling with lengthy procedures and paperwork. The new rules mandate that banks must settle claims related to accounts and lockers of deceased customers within 15 days. In addition, nominees will now be compensated in case of delays, a significant move to ensure accountability and fairness in the banking system.
According to the revised guidelines, banks are no longer permitted to insist on legal documents like succession certificates, letters of administration, or probate of will when releasing funds to nominees or survivors. They also cannot demand bonds of indemnity or sureties, regardless of the account balance. This means that immediate family members or nominated beneficiaries can access funds faster without facing unnecessary legal hurdles.
In cases where no nominee or will exists, banks are allowed to settle claims up to Rs 5 lakh for co-operative banks and Rs 15 lakh for other banks. Claimants in such situations will need to provide a simplified RBI form, the death certificate of the account holder, and verified identity documents. Additional requirements may include an indemnity bond and, where necessary, no-objection certificates from other legal heirs. A legal heir certificate issued by a competent authority or a declaration in RBI’s specified format from a person known to the deceased’s family may also be accepted.
For claims exceeding the specified limits, additional documents such as succession certificates, death certificates, identity verification, indemnity bonds, and no-objection certificates will be mandatory. In the absence of a succession certificate, claimants can submit an affidavit in the prescribed RBI format, sworn before a notary or judge, by an independent person acquainted with the family. Where disputes exist among heirs or beneficiaries, banks will only release funds upon receipt of a valid court order such as a probate of will, letter of administration, or decree.
The new rules also provide relief in cases involving term deposits. Banks can now permit premature closure of term deposits belonging to deceased account holders without imposing any penalty, even if the deposits are within a lock-in period. However, if a court has restrained the bank from disbursing funds, claims will not be processed until the order is lifted or modified.
The RBI has directed all banks to adopt these measures by March 31, 2026. The central bank believes this framework will not only reduce stress for families of deceased customers but also bring uniformity in claim processing across Indian banks. By ensuring faster settlement, transparency, and compensation for delays, the RBI has taken a step toward making the banking system more sensitive to families dealing with loss and financial uncertainty.
