Centre Notifies Enforcement of Key Nomination Provisions in Banking Laws (Amendment) Act, 2025, Effective November 1
Pranav B Prem
The Central Government, through the Ministry of Finance (Department of Financial Services), has notified that key provisions of the Banking Laws (Amendment) Act, 2025—relating to nomination—shall come into force on November 1, 2025. The notification, published in the Gazette of India (Extraordinary), Part II, Section 3(ii) on October 22, 2025, was issued vide S.O. 4789(E). The order was signed by Ashish Madhaorao More, Joint Secretary, Ministry of Finance. It specifies that Sections 10, 11, 12, and 13 of the 2025 Amending Act shall take effect from November 1, 2025.
The Banking Laws (Amendment) Act, 2025—first notified on April 15, 2025—introduces several amendments to key banking statutes, including the Reserve Bank of India Act, 1934, the Banking Regulation Act, 1949, the State Bank of India Act, 1955, and the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980. The provisions now coming into force deal primarily with the nomination framework for banking deposits, articles in safe custody, and lockers, enabling multiple or successive nominations and providing clarity on the order of priority among nominees.
Section 10 – Amendment to Section 45ZA (Banking Regulation Act, 1949)
Section 10 of the Amending Act modifies Section 45ZA(1) of the Banking Regulation Act, 1949, which previously allowed a depositor to nominate one person to receive the deposit in the event of the depositor’s death. The amendment substitutes the words “one person” with “one or more persons not exceeding four, either successively or simultaneously.” This enables depositors to nominate up to four persons who may either receive the amount together or in a specified sequence.
Two new sub-sections have been added:
Section 45ZA(1A) provides that when nominations are made successively, only one nominee will be recognized at a time according to the order set out under the newly inserted Section 45ZG.
Section 45ZA(1B) allows simultaneous nominations in favor of up to four persons, provided the depositor specifies the percentage share of each nominee.
Section 11 – Amendment to Section 45ZC (Articles in Safe Custody)
Section 11 amends Section 45ZC(1) of the 1949 Act, which earlier permitted nomination of a single person to receive articles kept in safe custody with a bank. The amendment replaces the phrase “one person” with “one or more persons not exceeding four, successively,” thereby allowing customers to nominate multiple persons in sequence for retrieval of such articles upon the depositor’s death.
Section 12 – Amendment to Section 45ZE (Bank Lockers)
Section 12 revises Section 45ZE(1), which governs access to the contents of bank lockers after the death of the hirer.
Previously, the provision permitted a sole hirer to nominate one person for access to the locker. The amended section now extends the right of nomination to one or more individuals hiring a locker jointly, allowing up to four successive nominees. The revised provision reads: “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 all 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 all the hirers, the banking company may give access to the locker and liberty to remove the contents of the locker.”
Section 13 – Insertion of New Section 45ZG (Order of Priority in Nominations)
Section 13 introduces a new Section 45ZG, which establishes the priority order for successive nominations made under Sections 45ZA(1), 45ZC(1), or 45ZE(1). Under this provision:
The nomination takes effect in favor of one person at a time, following the priority listed by the depositor.
The first nominee’s rights prevail if they survive the depositor; if deceased, the next nominee’s rights take effect, and so on.
If the depositor does not specify the priority order, nominees are recognized in the sequence in which their names appear in the nomination form.
The section, however, does not apply to simultaneous nominations under Section 45ZA(1), where the depositor has specified percentage allocations.
