With the announcement of a uniform framework that would drastically cut processing time and penalize banks for delays, the Reserve Bank of India (RBI) has implemented extensive measures to expedite the payment of claims for the bank accounts and lockers of deceased clients. When he announced the proposal in his monetary policy announcement on August 6, 2025, RBI Governor Sanjay Malhotra said the new regulations will make the settlement procedure “more convenient and simpler” for bereaved families.
Schedule and Implementation
The RBI’s draft circular “Settlement of Claims in respect of Deceased Customers of Banks Directions, 2025,” which outlines the new framework, is expected to go into effect on January 1, 2026, subject to finalization following the conclusion of public comment on August 27. This would significantly improve upon the present uneven standards across institutions by requiring banks to pay all claims within 15 calendar days after receiving comprehensive paperwork.
Important Clauses for Various Claim Types
The procedure will be significantly streamlined for accounts that have survivorship or nominee provisions. Banks are required to discharge cash without requesting indemnity bonds, succession certificates, or probate paperwork. All that is required of claimants is a valid identity document, a claim form, and a death certificate.
Accounts without nominees are the focus of the most important change. Banks are required to set up a streamlined process for claims up to a Rs 15 lakh minimum. Additional paperwork for these situations consists of a legal heir certificate or declaration, no-objection letters from non-claimant legal heirs, and an indemnity bond signed by claimants. Claims that above the threshold will need legal heir or succession certifications from the appropriate authorities.
Penalties for Failure to Comply
Banks will be subject to severe financial penalties if they miss the 15-day deadline. Banks are required to pay interest on deposit-related delays at the current bank rate + 4% annually for the duration of the delay. At the current bank rate of 5.75%, this amounts to about 10% yearly pay. The fine is Rs 5,000 for each day of lateness for safe deposit boxes and items under secure custody.
Resolving an Increasing Issue
A dramatic increase in unclaimed deposits across Indian banks coincides with the effort. Over Rs 67,000 crore in unclaimed deposits had been remitted by banks to the RBI’s Depositor Education and Awareness Fund as of June 2025, a 26% increase over the previous year. Of these unclaimed deposits, public sector banks have Rs 58,330 crore, with State Bank of India holding the largest share at Rs 19,329 crore.
The revisions are seen by industry analysts as a component of larger customer-centric initiatives. The standardization aims to “alleviate the emotional and procedural difficulties faced by grieving families, ensuring empathy, clarity, and consistency during sensitive times,” according to Pratik Shah, Partner and National Leader at EY India, who spoke to Economic moments.
In order to provide clear and easy access to these services, the RBI has now required banks to post standardized claim forms and processes on their websites and in all of their branches. The central bank’s dedication to safeguarding depositor interests and holding financial firms responsible for providing timely services is reflected in this extensive reform package.
