Image Source: India First
In a landmark move aimed at simplifying and humanising banking procedures, the Reserve Bank of India (RBI) has proposed a uniform framework for settling claims related to deceased customers’ bank accounts, lockers, and safe custody items. The initiative, outlined in the Draft Circular titled “Settlement of Claims in respect of Deceased Customers of Banks Directions, 2025,” seeks to eliminate procedural inconsistencies across banks and reduce the emotional and logistical burden on grieving families.
Key Highlights of the Draft Proposal
Banks must settle claims within 15 calendar days of receiving all required documents.
Standardised claim forms will be used across all banks to ensure uniformity.
Compensation will be paid for delays attributable to the bank.
Public feedback on the draft is invited until August 27, 2025.
Implementation is expected by January 1, 2026.
Simplified Procedures for Nominee-Based Claims
For accounts or lockers with registered nominees, the process will be straightforward:
Claimants must submit a standardised claim form.
A copy of the death certificate of the deceased customer is required.
An officially valid identity and address proof of the nominee must be provided.
This streamlined approach is designed to expedite settlements and reduce bureaucratic hurdles.
Handling Claims Without Nomination
In cases where no nominee or survivorship clause exists, RBI has proposed a simplified yet secure process:
Banks must fix a threshold limit for simplified claims, with a minimum of Rs 15 lakh.
For claims up to this threshold:
A bond of indemnity or surety signed by claimants is required.
A letter of disclaimer or no-objection from non-claimant legal heirs may be needed.
For claims exceeding the threshold:
A succession certificate or legal heir certificate issued by a competent authority is mandatory.
Alternatively, a declaration regarding the legal heirs of the deceased depositor may be accepted.
This tiered documentation approach balances ease of access with risk management.
Locker and Safe Custody Claims
Claims related to safe deposit lockers and articles in safe custody will follow similar timelines and documentation requirements:
Banks must process such claims within 15 days of receiving all necessary documents.
Claimants will be notified to fix a date for inventory of the locker or custody items.
This ensures timely access to valuable belongings and prevents prolonged delays.
Compensation for Delays
To hold banks accountable and protect claimants’ interests, RBI has proposed clear compensation mechanisms:
For deposit-related claims: Interest at the prevailing Bank Rate plus 4% per annum will be paid for the delay period.
For locker or safe custody claims: Rs 5,000 per day will be paid for delays attributable to the bank.
This marks a significant shift toward customer-centric banking practices.
Accessibility and Transparency
To ensure transparency and ease of access:
All standardised forms and document lists must be available at bank branches and on their websites.
Claimants can lodge claims at any branch and receive acknowledgment.
Banks must provide online tracking of claim status and notify claimants of any missing or incorrect documents.
This digital and physical accessibility is expected to reduce confusion and improve service delivery.
Why This Matters
The RBI’s proposal addresses a long-standing pain point in the banking system—delays and inconsistencies in settling claims after a customer’s death. By standardising procedures and enforcing timelines, the central bank aims to:
Reduce hardship for bereaved families.
Eliminate divergent practices across banks.
Improve overall customer service and trust in the banking system.
The move is part of RBI’s broader agenda to modernise banking operations while keeping empathy and efficiency at the core.
Sources: Outlook Business, The Hindu Business Line
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