RBI to unify claim settlement rules for deceased account holders across banks

The Reserve Bank of India (RBI) has announced that it will implement unified procedures to ensure that legal heirs receive the balances in bank accounts and contents of lockers within 15 days of the account-holders' demise. Banks would also have to pay compensation to the heirs or nominees if there is a delay in the settlement of the claims in this regard.

The RBI, which published the draft circular on the unified procedure for all banks, has invited suggestions on the matter, which could be submitted till August 27. The new rule is expected to be enforced from January 1, 2026. With the move, the RBI aims to avoid delays in payment to legal heirs of deceased account-holders arising from a lack of clarity on procedures.

Under the proposed unified procedure, the application form and documents to be submitted by the heirs would be standardised. In accounts where the nominee has been registered, the claim must be settled within 15 days of receipt of the claim form, the account-holder's death certificate, an identity document of the nominee or legal heir, and proof of address.

In accounts where no nominee has been named, the applicant should produce documents proving legal heirship. The draft mentions the valid documents for the purpose. When there is a delay in settlement due to a lack of clarity on the documents submitted, the bank must inform the applicant and obtain the required papers as soon as possible.

According to the circular, banks have to display the progress of the applications for the settlement of claims on their website. When a bank fails to settle a claim within 15 days, it has to pay an additional 4 per cent annual interest over and above the existing rate during the payment. Similarly, a delay in handing over locker contents would attract compensation of ₹5,000 per day of delay.