Nomination

*What is nomination?

It is an authority given by the depositor(s) to a bank on prescribed format allowing it to pay a certain person the amount standing to the credit of a certain account of the depositor(s) in the event of death of the depositor(s).

*Why nomination?

To facilitate payment in a deceased depositor’s account

*Since when has the facility become operative?

The 29th March, 1985

*What are the forms for nomination of deposit accounts?

DA 1 – Form for nomination

DA 2 – Cancellation of nomination

DA-3 – Variation of nomination

*Where can nomination facilities are allowed

Nomination may be made only in respect of any deposit which is held in the individual capacity of the depositor(s) either singly or jointly or as a sole proprietor of a concern and not in any representative capacity as the holder of an office or otherwise

*Who will sign on the nomination Forms?

Any nomination, variation of nomination or cancellation of nomination is to be signed by all depositors relating to a particular account. In case a deposit is made in the name of a minor, the nomination shall be made by a person lawfully entitled to act on behalf of the minor.

*How many nominees can there be relating to a particular deposit account?

As per rule, a nomination shall be made in favor of only one individual.

*When can a nomination, cancellation of nomination or variation of nomination be made?

It can be made at any time during which the deposit is held by a banking company to the credit of the depositor(s)

*When the particular deposit is renewed, does the nomination cease to be in-force?

A nomination, cancellation of nomination or variation of nomination shall not cease to be in force merely on ground of renewal of deposit.

What steps are to be taken when a bank receives the duly completed form of nomination?

i) An acknowledgment in writing to the depositor(s) concerned.

ii) Registration of nomination in the books of the bank

*Can a minor be a nominee?

Yes, but in this case all the depositors relating to the deposit must appoint another individual, not being a minor, to receive the amount of deposit on behalf of the minor nominee.

*Does the payment made by the bank to the nominee amount to a full discharge?

Yes, in respect of a nomination which is complete in all respect, a payment to the nominee shall be construed as a full discharge by the bank of its liability.

*In case a deposit is held in joint names in which nomination was not made at the time of opening the account, and subsequently one of the depositors dies, can the survivor(s) make a valid nomination?

Yes, but nomination form has to be signed by all the survivor(s).

*In the event of death of depositors, can the bank make a premature payment to the nominee?

Yes

*Is nomination facility allowed on all accounts?

Nomination facility can be allowed only to individuals and sole proprietor of a concern (not to partnership, limited companies accounts etc.) in all types of deposit accounts (FD, SB, RD, CA, etc).