Bank Locker Rules: The government has come out with fresh bank locker rules, thereby granting customers more communicative means of storing goods and financial assets.
These regulations, due to go into effect April 16, 2025, now accept a maximum of four nominees for your bank account and locker to ease inheritance issues and legal rigors for your family.
What Are the Reasons Behind the Modified Bank Locker Nomination Rules?
In the past, a customer could nominate just one person for the bank locker or account. As many people deemed necessary, time has brought changes in assigning any property or money to govern nine optional nominees having endless claims with the blessing from one who assigned. Hence, disputes among family members can be avoided.
The Two Types of Nomination Alternatives Available
While appointing nominees, you should choose one of the two methods of distribution:
Simultaneous Nomination
- This means that all nominees receive a pre-decided share of the asset.
- For example, 40% may go to person A, 30% to person B, 20% to person C, and 10% to person D.
Hence after your death, the bank is obliged to give that much amount from your account or the contents of the locker accordingly.
Successive Nomination
- An amount or locker access shall be given to the first nominee without any reservation.
- If the first nominee cannot or does not accept the amount or access to the locker, the second nominee shall receive that right, then go to the third or the fourth.
A Clear Point About Nominations Related to Bank Lockers
- Only a successive mode of nomination holds good for the locker or any items kept under the charge of the bank.
- If no nomination is made, the legal heirs must contact a long list of documents, i.e., will or succession certificate, which would be quite taxing.
So What Happens to Unclaimed Money in Banks?
Unclaimed funds arise when the individual concerned forgets the deposit or the investment. Here is what to know:
Bank Deposits: After 10 years with no transaction, the money is transferred to RBI’s Depositor Education and Awareness fund. But with the proper documents, the owner or the legal heirs can still claim it.
Investments and Dividends:
If you have invested in bonds with a company and have not laid claim in seven years, the money (together with interest) goes to the Investor Education and Protection Fund (IEPF).
In the same vein, unclaimed dividends are handed to the IEPF, too, after the expiry of the same seven-year period.
What Are Your Reasons for Updating Nominees Now?
Life is troublesome and unpredictable, and it becomes requisite that your family never face financial challenges in the aftermath of your demise. Upon updating your bank locker and account nominees, you bless them with the following:
- Swift availability of funds without legal holdup.
- Clear, inscribed instructions for asset distribution, keeping family disputes at bay.
- Assurance of not having any thought of their hard-earned money going down the drain.