RBI draft rules to speed up bank claim settlements for deceased customers

The Reserve Bank of India has proposed new rules mandating faster, simpler claim settlements for deposits, lockers, and safe custody articles after a customer’s death.

The Reserve Bank of India (RBI) has proposed sweeping changes to how banks handle claims related to deceased customers, aiming for quicker and smoother settlements. On August 11, the Reserve Bank of India issued a draft circular titled Settlement of Claims in respect of Deceased Customers of Banks Directions, 2025, seeking public input on the proposed framework.

As per the new guidelines, banks must resolve all deposit-related claims within 15 days after receiving the complete set of necessary documents. Additionally, for locker or safe custody claims, banks are obligated to initiate the inventory process within 15 days of claim submission. Any delay attributable to banks will attract penalties, for deposits, interest at the Bank Rate plus 4% annually for the delay period, and for lockers or articles, a fine of Rs 5,000 per day.

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For accounts with a nominee or survivorship clause, claims can be processed with just three documents: a claim form, the death certificate, and proof of identity and address of the nominee/survivor. No legal documents such as succession certificates will be required.

In cases where there is no nominee, banks will implement a streamlined procedure to settle claims amounting to up to Rs 15 lakh. Above this threshold, additional proof like succession certificates or sworn affidavits may be necessary.

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The draft also ensures that term deposits can be withdrawn prematurely without penalties upon a depositor’s death, even during lock-in periods. For missing persons, claims can be settled using a court’s presumption of death or, for smaller amounts, an FIR, a non-traceable report, and an indemnity letter.

The RBI also wants all banks to use a uniform set of claim forms, make them available both in branches and online, and allow claims to be lodged and tracked digitally. Banks have been urged to actively promote the nomination facility to prevent legal disputes for heirs.

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