RBI's Strict Order: Banks Must Settle Deceased Customers' Claims in 15 days or Face Penalties

New Delhi (The Uttam Hindu): The Reserve Bank of India has taken a special initiative to settle claims related to bank accounts and lockers of deceased customers within 15 days. The central bank is planning to standardize the form to settle such cases within the stipulated time frame and compensate the nominees for any delay.

RBI has proposed to bring standard procedures for settlement of claims related to items kept in bank accounts and safe deposit lockers of deceased bank customers. The aim is to make settlement more convenient and simple. In this direction, the central bank has issued a draft circular – Reserve Bank of India (Settlement of Claims in Respect of Deceased Customers of Banks) Directions, 2025′ and has sought comments on it by August 27. The draft said, "The bank will use standardized forms for receiving claims and other documents." It also provides for compensation in case of delay in settlement of claims. The draft states that if a person is nominated for deposit accounts or lockers, he must submit the claim form, death certificate (deceased customer) and officially valid document of the nominee (nominee) for verification of identity and address.

According to the draft, the bank should adopt a simplified procedure for settlement of claims in deposit accounts where the deceased depositor has not made any nomination, so as to avoid inconvenience to the claimant or legal heir. The bank should fix a minimum limit of Rs 15 lakh for settlement of such claims based on its risk management systems. Currently, all banks have their own systems and procedures in respect of claims made by the 'nominee' of the deceased in respect of account and locker. Similarly, there may be some variation in the procedures of banks for accounts without a 'nominee'. This move will standardise and simplify the process. As per the existing instructions, banks are required to adopt a simplified procedure to facilitate prompt and hassle-free settlement of claims made by 'nominee' persons/legal heirs.