The Reserve Bank of India has unveiled a streamlined framework to facilitate the settlement of bank deposits after a customer’s death, including measures to address unclaimed accounts and prevent legal issues surrounding access to funds.
A family death often leaves relatives facing not only grief but also practical questions about money left behind in bank accounts. The Reserve Bank of India has set out a simplified process for settling deposits of a deceased customer, with different routes depending on whether there is a nominee, a joint account holder or no nomination at all. The central bank’s framework is meant to reduce delays, limit unnecessary paperwork and make it easier for banks to release funds lawfully.
One point families should not overlook is that withdrawing money through the deceased person’s ATM card, UPI or net banking after death can create legal trouble. Once a customer dies, their personal authority over the account ends, and any access should be handled through the bank’s formal claim process. Banking specialists say quiet withdrawals by one relative, without the knowledge or consent of other legal heirs, can later lead to allegations of fraud or misappropriation.
Where a nominee has been registered, the process is usually straightforward. The nominee is treated as a custodian rather than the final owner, but banks are generally required to release the balance to that person once the death certificate and identification documents are submitted. If the account was held jointly on an “either or survivor” or similar basis, the surviving account holder can normally continue to operate the account after informing the bank and providing the death certificate. In such cases, banks typically remove the deceased holder’s name and convert the account into a single account for the survivor.
The position is more involved when there is no nominee. For smaller claims, banks may follow an internal threshold-based process, which usually calls for a claim form signed by all legal heirs, an indemnity bond, sureties and no-objection letters from other heirs if one person is to receive the money. When the amount is larger, banks can ask for formal succession papers, such as a succession certificate, or for probate or letters of administration where a valid will exists. RBI rules also require banks to settle properly documented death claims within 15 days, and customers can complain to the banking ombudsman or through the RBI’s grievance system if a bank delays without good reason.
When relatives do not even know which banks held the deceased person’s money, the RBI’s UDGAM portal can help. The centralised platform was launched to make it easier to search for unclaimed deposits across participating banks; according to RBI material, it covered 30 banks and about 90% of unclaimed deposits in the Depositor Education and Awareness Fund as of March 4, 2024. The RBI said the portal was designed to help people identify dormant balances and then approach the relevant bank to claim them properly.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
