MUMBAI: RBI has taken a major step to ensure that grieving families immediately get access to funds and valuables of their deceased relatives. Effective Jan 1, 2026, banks that fail to settle claims related to deceased customers within 15 days of receiving complete documentation must pay up. For delayed payouts on deposits, banks will owe interest at the bank rate plus 4%. For lockers, the cost of delay will be Rs. 5,000 a day.The new framework, laid out in the RBI (Settlement of Claims in respect of Deceased Customers of Banks) Directions, 2025, aims to eliminate the procedural fog that has long complicated such settlements. Instead of discretionary red tape and inconsistent practices, the rules now offer a uniform roadmap for claimants-be they nominees, survivors, or legal heirs.The cleanest route remains through a nomination or survivorship clause. Where these exist, banks are required to release funds or valuables without demanding legal papers like succession certificates or bonds of indemnity. Claimants only need to furnish a death certificate, a claim form, and identification documents. They are, however, treated legally as trustees on behalf of the actual heirs.In the absence of a nominee, banks must adopt a simplified procedure for claims up to Rs 15 lakh. A legal heir’s declaration, no-objection letters from other heirs, and basic documentation are sufficent. For higher amounts, succession certificates or affidavits may be required, along with surety-backed indemnities.Lockers would follow a parallel process. Nominees or joint holders with survivorship rights are granted access upon verification. In other cases, access is granted to legal heirs, subject to documentation and provided no dispute exists. An inventory of contents must be made in the presence of witnesses and bank officials, with formal acknowledgment from claimants.The directions also touch upon corner cases: any payments still being credited to the deceased’s account will be returned to the sender or held in an estate account, and term deposits may be closed prematurely without penalty on death. Standardised forms will be available both online and at branches. Banks will also publicise the benefits of nominations.The move has been triggered by the growing size of unclaimed deposits, a large part of which is because banks are reluctant to release the funds of deceased.
