# Nomination Quation

## Section 1: Legal Framework & Enactment 1. **Q: Under which act are the Banking Companies (Nomination) Rules, 1985 framed?** A: The Banking Companies (Nomination) Rules, 1985 are framed under the Banking Regulation Act, 1949. 2. **Q: Which sections of the Banking Regulation Act deal with nomination for deposits?** A: Sections 45 ZA and 45 ZB deal with nomination for deposits. 3. **Q: Which sections cover nomination for Safe Custody?** A: Sections 45 ZC and 45 ZD cover nomination for Safe Custody. 4. **Q: Which sections deal with nomination for Safe Deposit Lockers?** A: Sections 45 ZE and 45 ZF deal with nomination for Safe Deposit Lockers. 5. **Q: What are the three main areas covered under the Banking Companies (Nomination) Rules, 1985?** A: The three areas are: Deposits, Safe Custody, and Safe Deposit Lockers. ## Section 2: Definition & Purpose of Nomination 6. **Q: What is nomination?** A: Nomination is the right conferred upon the holder of a bank account to appoint one or more persons who will be entitled to receive monies upon the death of the account holder. 7. **Q: What is the main benefit of nomination facility?** A: Nomination facility simplifies the procedure for settlement of claims of deceased depositors. 8. **Q: In what capacity does a nominee receive the balance amount?** A: The nominee receives the balance amount as a trustee of the legal heirs. 9. **Q: Does nomination take away the rights of legal heirs?** A: No, nomination facility does not take away the rights of legal heirs on the estate of the deceased. 10. **Q: Is the nominee the absolute owner of the amount received?** A: No, the nominee receives the amount as a trustee and the amount can be claimed by legal heirs in accordance with the law of succession. ## Section 3: Scope & Application 11. **Q: What does Section 45ZA to 45ZF enable banks to do regarding deceased depositors?** A: These sections enable banks to make payment to nominees, return articles from safe custody, and release locker contents after the depositor's death. 12. **Q: Should banks make an inventory when returning articles from safe custody?** A: Yes, banks must make an inventory in the manner directed by the Reserve Bank. 13. **Q: Is inventory required when releasing locker contents?** A: Yes, an inventory of the locker contents must be made in the manner directed by the Reserve Bank. 14. **Q: Who is eligible for nomination facility in deposit accounts?** A: Nomination facility is intended only for individuals including a sole proprietary concern in case of deposit accounts. 15. **Q: Can Joint Stock Companies make nominations?** A: No, nomination shall not be accepted for Joint Stock Companies. ## Section 4: Entities Not Eligible for Nomination 16. **Q: Can Partnership Firms register nominations?** A: No, nomination is not accepted for Partnership Firms. 17. **Q: Can a Joint Hindu Family register a nomination?** A: No, nomination is not available for Joint Hindu Family accounts. 18. **Q: Can institutional depositors make nominations?** A: No, nomination is not accepted for institutional depositors. 19. **Q: Can Schools, Clubs, and Wakfs register nominations?** A: No, nomination is not available for Schools, Clubs, Wakfs, etc. 20. **Q: List all entities that cannot make nominations.** A: Joint Stock Companies, Partnership Firms, Joint Hindu Family, Institutional Depositors, Schools, Clubs, and Wakfs cannot make nominations. ## Section 5: Number of Nominees 21. **Q: How many nominees can be appointed for a single deposit account?** A: There can be only one nominee for a single deposit account. 22. **Q: How many nominees can be appointed for a joint deposit account?** A: There can be only one nominee for a joint deposit account. 23. **Q: How many nominees can be appointed for a locker hired singly?** A: Only one individual nominee can be appointed for a sole hirer of a locker. 24. **Q: How many nominees can be appointed for a jointly held locker?** A: There can be two nominees for a jointly held locker. 25. **Q: Can there be more than one nominee for a deposit account held jointly?** A: No, there cannot be more than one nominee in respect of single/joint deposit account. ## Section 6: Nomination in Joint Accounts 26. **Q: Who should make the nomination in a joint account?** A: Nomination should be made by all the joint holders in a joint account. 27. **Q: When does a nominee's right arise in a joint deposit account?** A: In a joint deposit account, the nominee's right arises only after the death of all the depositors. 28. **Q: Can nomination be accepted in accounts with survivorship mandates?** A: Yes, nomination can be accepted in accounts where survivorship mandates have been recorded by the bank. 29. **Q: Is nomination applicable to "Either or Survivor" accounts?** A: Yes, nomination can be made in "Either or Survivor" accounts, but cancellation or variation must be made by all depositors jointly. 30. **Q: Can a sole depositor make a nomination in a single account?** A: Yes, a sole depositor can make a nomination in a single account. ## Section 7: Types of Accounts & Nomination 31. **Q: Can nomination be accepted in an overdraft account?** A: No, nomination cannot be accepted in an overdraft account even if it has a credit balance. 32. **Q: Can nomination be registered in a cash credit account?** A: No, nomination cannot be accepted in a cash credit account even if it has a credit balance. 33. **Q: Is nomination available for savings accounts?** A: Yes, nomination facility is available for savings accounts. 34. **Q: Is nomination available for FDR accounts?** A: Yes, nomination facility is available for FDR (Fixed Deposit Receipt) accounts. 35. **Q: Is nomination available for RD (Recurring Deposit) accounts?** A: Yes, nomination facility is available for RD accounts. ## Section 8: Who Can Be a Nominee 36. **Q: Can a minor be appointed as a nominee?** A: Yes, a nominee can be a minor. 37. **Q: Can an insolvent person be appointed as a nominee?** A: Yes, a nominee can be an insolvent person. 38. **Q: Can an NRI be appointed as a nominee?** A: Yes, a nominee can be an NRI (Non-Resident Indian). 39. **Q: Who can be appointed as a nominee?** A: Any natural person including a minor, an insolvent person, or NRI can be appointed as a nominee. 40. **Q: Can a legal entity like a company be a nominee?** A: No, only natural persons can be nominees. ## Section 9: Minor as Nominee 41. **Q: What is required if a minor is appointed as a nominee?** A: The account holder must provide the name of a major person who will act on behalf of the minor nominee for receiving money during the minority. 42. **Q: Who should make the nomination if the nominee is a minor?** A: The nomination shall be made by a person lawfully entitled to act on behalf of the minor. 43. **Q: What information should be recorded when a minor is appointed as a nominee for a locker?** A: The name of the guardian as well as the date of birth of the minor should be recorded in the Account Opening Form and in the system. 44. **Q: Can a minor who opens an account register a nomination?** A: No, opening of an account by a minor of age 10 years and above does not mean that he can be allowed to register nomination. 45. **Q: What happens when a minor nominee attains majority?** A: On attaining majority, he/she can register a fresh nomination. 46. **Q: Who is the person 'lawfully entitled to act on behalf of minor'?** A: This has to be looked into as per faith/religion to which the minor is subject. 47. **Q: Can a 13-year-old minor be appointed as a nominee?** A: Yes, but a major person must be appointed to receive payment on behalf of the minor. ## Section 10: Nomination Forms 48. **Q: Which form is used for registering nomination in deposit accounts?** A: Form DA1 is used for registering nomination in deposit accounts. 49. **Q: Which form is used for variation of nomination in deposits?** A: Form DA2 is used for variation of nomination in deposits. 50. **Q: Which form is used for cancellation of nomination in deposits?** A: Form DA3 is used for cancellation of nomination in deposits. 51. **Q: Which forms are used for Safe Custody nomination?** A: Forms SC1, SC2, and SC3 are used for Safe Custody nomination (registration, variation, and cancellation respectively). 52. **Q: Which form is used for locker nomination in single accounts?** A: Form SL1 is used for locker nomination in single accounts. 53. **Q: Which form is used for locker nomination in joint accounts?** A: Form SL1A is used for locker nomination in joint accounts. 54. **Q: Which form is used for variation of nomination in locker accounts?** A: Form SL2 is used for variation of nomination in locker accounts. 55. **Q: Which forms are used for cancellation of locker nomination?** A: Forms SL3 or SL3A (for joint accounts) are used for cancellation of locker nomination. ## Section 11: Attestation & Signature Requirements 56. **Q: Does the signature of a literate account holder on the nomination form need to be attested by a witness?** A: No, the signature of literate account holders on the nomination form need not be attested by a witness. 57. **Q: What is required for thumb-impression on nomination forms?** A: Thumb-impression(s) of the account holder/s shall be attested by two witnesses on the nomination forms. 58. **Q: What is required if an illiterate person exercises nomination?** A: It is required to be witnessed by two persons. 59. **Q: Is attestation by a gazetted officer required for nomination by an illiterate person?** A: No, attestation by a gazetted officer is not required; witnessing by two persons is sufficient. 60. **Q: Is verification by a notary public required for nomination?** A: No, verification by a notary public is not required for nomination. ## Section 12: Mandatory Nature & Refusal 61. **Q: Is nomination mandatory?** A: No, nomination is optional, not mandatory. 62. **Q: Should nomination be taken as a rule in all eligible cases?** A: Yes, nomination in all eligible cases should be taken as a rule. 63. **Q: What should be done if the account holder does not wish to make a nomination?** A: Such refusal should be specifically recorded in the Account Opening Form (AOF). 64. **Q: What should the customer provide if they choose not to make a nomination?** A: The customer should give a letter stating that they choose not to make a nomination. 65. **Q: Should customers be explained the advantages of nomination?** A: Yes, the customer should be explained the advantages of nomination facility. ## Section 13: Variation & Cancellation of Nomination 66. **Q: Who can cancel or vary a nomination in a single account?** A: The sole depositor can cancel or vary the nomination in a single account. 67. **Q: Who can cancel or vary a nomination in a joint account?** A: All the depositors jointly can cancel or vary the nomination in a joint account. 68. **Q: When can nomination be varied or cancelled?** A: Nomination can be varied or cancelled at any time during the currency of the deposit/locker hire. 69. **Q: Does variation of nomination apply to "Either or Survivor" accounts?** A: Yes, variation and cancellation rules are also applicable to deposits with "Either or Survivor" operating instructions. 70. **Q: Who must make the variation in case of a locker leased to multiple lessees?** A: The nomination, its cancellation, or variation shall be valid only if made by all the co-lessees of the locker. 71. **Q: Does nomination cease on renewal of term deposits?** A: No, nomination instruction would not cease merely by reason of renewal of such deposit. 72. **Q: Does nomination cease on renewal of locker agreements?** A: No, nomination would not cease merely by reason of renewal of locker agreements. 73. **Q: How quickly should the branch register nomination changes?** A: The registration should be done without any delay to avoid complications. ## Section 14: Locker-Specific Nomination Rules 74. **Q: Is nomination available for lockers with "Either or Survivor" mandate?** A: No, currently the BR Act (Section 45 ZE) does not provide nomination facility for lockers with "Either or Survivor" mandate. 75. **Q: Is nomination available for lockers with "Former or Survivor" mandate?** A: No, nomination is not available for lockers with "Former or Survivor" mandate. 76. **Q: Is nomination available for lockers with "Anyone or Survivors" mandate?** A: No, nomination is not available for lockers with "Anyone or Survivors" mandate. 77. **Q: For which types of lockers is nomination facility available?** A: Nomination facility is available only for lockers hired singly as well as jointly (without survivor mandates). 78. **Q: Can a minor be a nominee for a locker?** A: Yes, Section 45 ZE does not preclude a minor from being a nominee for obtaining delivery of locker contents. 79. **Q: Are banks required to open sealed packets while releasing safe custody items to nominees?** A: No, banks are not required to open sealed/closed packets left with them for safe custody while releasing them. ## Section 15: Payment to Nominee - Legal Position 80. **Q: What constitutes valid discharge of bank's liability when paying a nominee?** A: Payment to a nominee who was validly appointed constitutes valid discharge of the bank's liability. 81. **Q: Under what condition can a bank refuse payment to a nominee?** A: If an order of a court or other competent authority has been received prohibiting payment to the nominee. 82. **Q: Who has to exercise their claim against if they dispute the nominee's right?** A: Any other person having a right or claim on the amount will have to exercise it against the nominee, not the bank. 83. **Q: Is the bank bound to take notice of claims by persons other than the nominee?** A: No, the bank is not bound to take notice of claims by any person other than the nominee. 84. **Q: What documents can the bank avoid demanding when there is a valid nomination?** A: The bank can avoid demanding Succession Certificate, Letter of Administration, or Court Order. ## Section 16: Time Frame for Settlement 85. **Q: Within what period should banks settle claims of deceased customers to nominees?** A: Banks should settle claims within a period not exceeding 15 days from the date of receipt of the claim. 86. **Q: What documents are required for settlement of claims to nominees?** A: Production of proof of death of the depositor and suitable identification of the claimant to the bank's satisfaction. 87. **Q: Is there a time limit for releasing locker contents to nominees?** A: Yes, the same 15-day period applies subject to production of required documents. ## Section 17: Claims Without Nomination/Survivor Clause 88. **Q: What is the limit for small claims settlement without elaborate documentation?** A: For claims not exceeding Rs. 5,000, payment may be made relying on declaration of legal heirs. 89. **Q: Who should attest the claim form for amounts up to Rs. 5,000?** A: The claim form should be duly attested by Notary/Magistrate. 90. **Q: What is the exemption for rural branches in far-flung areas?** A: Rural branches need not insist on attestation by Notary/Magistrate; certificate from Sarpanch or equivalent authority is acceptable. 91. **Q: What is the limit for medium-value claims?** A: For claims not exceeding Rs. 50,000, payment may be made after relying on declaration attested by Notary/Magistrate. 92. **Q: Is confidential enquiry needed for claims up to Rs. 50,000?** A: No, no confidential enquiry need be made for claims up to Rs. 50,000. 93. **Q: Is surety required for claims up to Rs. 50,000?** A: No, no surety need be insisted upon for claims up to Rs. 50,000. 94. **Q: What is required for claims exceeding Rs. 50,000?** A: Confidential enquiry should be made about legal heirs and claim should be settled against Indemnity Bond with surety. 95. **Q: What should be done if the account holder has been missing for seven years?** A: Settlement can be made if an order from the court is produced by the claimant(s). ## Section 18: Payment Against Power of Attorney 96. **Q: What is required when payment is made to a legal heir holding POA?** A: Receipt and Indemnity Bond must be signed by the person authorized, for self and as attorney of the persons. 97. **Q: Should names be specified in the POA-based settlement?** A: Yes, names of the persons on whose behalf the attorney is acting should be specified. ## Section 19: Premature Withdrawal of Term Deposits 98. **Q: What happens when one joint account holder dies in a joint deposit?** A: The bank must make payment jointly to the legal heirs of the deceased and the surviving depositor(s). 99. **Q: When can premature withdrawal be allowed to the surviving depositor alone?** A: Only if there is a joint mandate from the joint depositors for disposal of balance as "Either or Survivor," etc. 100. **Q: Is mandate for premature withdrawal required to be given in advance?** A: Yes, the mandate can be given either at the time of placing the deposit or anytime subsequently during the term. 101. **Q: What happens if the mode of operation is 'Jointly'?** A: Payment must be made jointly to the legal heirs of the deceased and the surviving depositor(s). 102. **Q: Can survivor alone withdraw if there is no specific mandate for premature withdrawal?** A: No, without a specific mandate for premature withdrawal, payment must be made jointly to heirs and survivors. ## Section 20: HUF (Hindu Undivided Family) Accounts 103. **Q: What happens to an HUF account when the Karta dies?** A: One of the members can be appointed as new Karta after obtaining affidavit cum indemnity from all major coparceners along with two sureties. 104. **Q: Can the new Karta operate the existing HUF account?** A: Yes, the bank can allow the new Karta to continue to operate the existing account based on proper documentation. 105. **Q: What if there is no acceptance for a new Karta among coparceners?** A: The account shall be dealt with as a claim case as per the policy for deceased depositors. 106. **Q: How many sureties are required for appointing a new Karta?** A: Two sureties are required along with the affidavit cum indemnity from all major coparceners. ## Section 21: General Benefits & Principles 107. **Q: What is the main advantage for banks in having nomination facility?** A: Banks can release proceeds without insisting upon Succession Certificate, Letter of Administration, or Court Order. 108. **Q: Does nomination facility speed up the claims settlement process?** A: Yes, it simplifies and speeds up the procedure for settlement of claims of deceased depositors. 109. **Q: Can banks delay registration of nomination changes?** A: No, registration should be done without any delay to avoid complications. 110. **Q: Are the rules different for deposits and lockers regarding nomination?** A: Yes, there are some differences, particularly regarding the number of nominees and applicability to survivor mandates.