NGO which works for Financial Inclusion/ Financial Literacy in India
The Lok Sabha of India, often referred to as the lower house of Parliament, has passed the Banking Laws (Amendment) Bill 2024, allowing bank account holders to nominate up to four people for their accounts and fixed deposits. This change aims to ease the transfer of funds to successors without legal issues.
NOMINEES IN BANK ACCOUNTS
A nominee in a bank account is a person designated by the account holder to receive the account’s proceeds in case of the account holder’s death. Here’s an overview:
- Purpose of Nomination
- Ensures smooth transfer of funds to the nominee without legal complications.
- Avoids the need for a succession certificate or court approval.
- How to Nominate
- Account holders can nominate someone while opening the account or later by filling out a nomination form.
- Only one nominee can be assigned per account, but joint accounts can have one nominee collectively.
- Who Can Be a Nominee?
- Typically, family members like a spouse, children, or parents.
- However, the account holder can nominate anyone they trust.
- Rights of a Nominee
- A nominee is a trustee, not the legal heir. The nominee holds the money until it is distributed to the legal heirs unless they are the same person.
- Updating Nomination
- Account holders can change or cancel a nomination anytime by submitting a fresh nomination form to the bank.
- Legal Considerations
- Nomination simplifies the process but does not override a will or inheritance laws.