Everything About Bank Nominee In India: Significance Of Nominee

If you have a bank account, you should have a nominee. Let’s look at what a nominee is, who is eligible to be a nominee, why having a nominee is important, and how to change or replace the nominee for your bank account. After all, the earning member or members of each household bear a heavy burden for the dependents. They must choose one of the members to serve as the bank nominee in addition to taking care of all other needs. Not only that, but they would also need to explain to the family members the nominee rights in a bank account, in case of any unfortunate catastrophe.

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Let’s consider an example. Famous lawyer Mr. A made enough money working for banks and other businesses to be able to retire comfortably. He passed away from lung cancer as a result of an unanticipated decline in health, leaving behind his elderly wife. After the funeral rites, Mrs. A discovered herself without access to the enormous quantities of money her husband had made, leaving her bankrupt. As a member of HUF, the extended family took care of her housing and food needs, but she had nothing in her possession or a safety net. To complete the bank formalities, it took her more than a year. This occurred as a result of Mr. A’s error in failing to designate his wife (or anyone else) as the nominee.

Find out who can be a nominee in bank accounts and other investments, and how to go about doing it, to prevent such a predicament for your loved ones.


The definition of “Nominee”

A nominee is, by definition, a person or organisation trusted with another holder’s assets while the holder is away. Nominee’s financial obligations to the insured/original owner of the assets are simply transferred to this person. A nominee can serve as a custodian in legal affairs and a safe-keeper in financial matters. The insured designates a different individual to receive the insurance benefits for insurance purposes.

Simply put, a nominee is a person you designate in your insurance policy, investment account, or bank account to receive the account’s proceeds in the event of your untimely death.


Why a Nominee for a Bank Is Crucial?

According to the RBI, there are countless amounts of unclaimed deposits sitting in banks all over India. This is because these accounts had no bank nominees, and it is incredibly challenging to get money back without a nomination. The deceased person’s family, who may have provided the family with financial support, must deal not just with their grief but also a sudden loss of stability. This confusion can be resolved by designating the spouse or other family members as the bank nominee.

A bank nominee is therefore essential in your bank account, so at the very least your loved ones’ interests are safeguarded in the event of any unanticipated circumstance to you.


Who May Be a Bank Account Nominee?

Account holders frequently seek guidance when they are unsure of who can be a nominee in a bank account. Your nominee should be the one you wish to receive the money in the event of your passing; this individual could be your spouse, children, sibling, either of your parents, or another relative. Ensure that the person you designate as your nominee does not differ from the person you name in your will. If the candidate and recipient specified in the will are different, they could need to engage in litigation to resolve this.

How many nominees are allowed? The number of candidates that can be held in a bank account is the next nomination-related concern. When a couple has two kids, they frequently wish to name both of them, or you can consider naming one child with your spouse. You may only nominate one individual for nomination in a bank account. There may be two nominations for some jointly controlled “locker” accounts.

If the candidate is a child? You must choose a guardian if your nominee is a minor. If your nominee is a minor when you pass away, the bank will be required to give the guardian the money.


Comparing nominee rights and legal will

Unless otherwise specified in a Will, the bank will assume that your nominee is the person you intend to leave your money to. Hence, nominee rights in a bank account often mean that the person you choose will receive all of the account’s earnings.

If the legal successor (in the will) and the nominee are different people, the nominee’s rights in the bank account are limited to those of a custodian. The nominee’s responsibility would be to take the money from the bank & give it to the rightful heir. Your heir may petition the courts based on your Will if your nominee declines to follow suit.


What takes place if there isn’t a nominee?

What occurs if the bank nominee is not present when the account holder dies? Banks want the money to be delivered to the lawful heirs as quickly as possible. Your bank will transfer the funds in your account to your heirs if you have a will that names one or more of your legal heirs. If the owner passes away without leaving a will and there are no disagreements among the legal heirs, they may claim the money (principal & interest) from the bank by providing the necessary paperwork. Whether the claimed amount is 5 Lakhs or higher will determine which documents are required. The following must be given to the bank by heirs:

  • Their KYCs
  • Certificate of Death Photocopy
  • letter of indemnity with a stamp (COS 540)
  • All claimants have signed the updated claim form.
  • Declaration on the Revised Claim Form, signed by a representative of the government or a customer of the same bank.
  • Declaration of Letters

The Declaration in the Revised Claim Form is sworn in front of a Judicial Magistrate or Notary Public as an affidavit in the format COS 539 if the sum is greater than 5 lakhs. In addition to the previously mentioned documents, Sureties with their contact information are also required.


How to Announce a Candidate

You can choose a beneficiary for your bank account in a variety of ways. Both online and offline techniques are available. Bank representatives can assist you in filling out an application for a nominee in bank if you visit the branch.

The majority of banks’ official websites include an online version of the nominee in bank application. Go to the website, choose the choice, choose or input the account number, enter the nominee’s information, and then submit. You would also locate an application for nominee in bank there if your bank provides mobile app services. By clicking the option, choosing the account number, entering the information for the nominee, and then submitting, you can submit the request using the app.


How to Change a Nominee’s Bank Information

Your bank will walk you through the process of upgrading or changing a nominee status in a few simple stages. Both privately owned banks and nationalized institutions can conduct this with ease.

Let’s imagine you’ve had an ICICI Bank account since before getting married, and you want to add your spouse as the nominee now that you’re married. You can fill out the DA1 form in person at your branch. Visit the bank’s website if you’re unsure of how to add a nominee in ICICI Bank online. There are roughly three steps to adding your nominee after logging in. You need to log in once more later to see if that has been reflected.


How to add or change a nominee for HDFC Bank online

If you are an HDFC Bank customer, the procedure is also simple, and you may learn how to update a nominee in HDFC Bank online with ease. Let’s imagine you want to replace your sister as your nominee with your spouse or child. Stop worrying about how to change nominee at HDFC Bank if you have an account there and go to the branch to get Form DA3, which is the nominee modification form. Let us explain how to replace a nominee in HDFC Bank if you don’t want to visit the bank. You must first click the Accounts page after logging in, then choose the Request section, then choose Change Nomination Information before choosing your Account. Next, choose the Modify tab, enter the new information, and then submit.


How to modify or add a nominee for ICICI Bank online

Are you unsure of how to modify your nominee in ICICI Bank online? Once you log in, the procedures are pretty identical. If there are many accounts in the same branch, be sure you are making the correct adjustment. I’m assuming you know how to check a nominee in ICICI Bank. You can choose each account and, before making the needed adjustment, check the nominee listed in each one.


How to update or add a nominee in SBI online

Online nominee changes or additions for SBI bank accounts are quick and simple. Everything you need to do is as follows. Go to onlinesbi.com to access the SBI online site, where you must enter your login and password. Choose the “Request & Questions” tab from the menu after logging in. In the form that appears, input the nominee’s name, date of birth, address, & relationship to the account holder after clicking the “Online Nomination” button. Click on Submit to send the nomination form. The registered mobile number will receive an OTP; enter it and press the Confirm button.

Altering the nominee can also be done using the SBI YONO app or by going to the SBI branch that is closest to you. Similar to online banking, the SBI YONO app allows users to change nominees. You must, however, submit a hard copy of the application form if you go to the SBI branch.


Conclusion on the nominee in the bank account

Your loved ones and others who depend on you will be financially secure if you add a nominee to your bank accounts. If you haven’t chosen your nominee yet, please do so as soon as possible. If you completed it a while ago, go to your account again to check the status and make any necessary adjustments. Do not continue to stress about how to add a nominee in HDFC Bank or how to update a nominee in ICICI Bank online. It will be a piece of cake if you visit the branch, schedule a call with their customer service, or visit the website. Last but not least, remember to let your nominee know they have been nominated.



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