RBI's New Rule: Banks Must Settle Deceased Customers' Account and Locker Claims Within 15 Days or Pay Penalty

The Reserve Bank of India (RBI) has introduced a major change aimed at easing the financial settlement process for families of deceased bank customers. Under the new draft guidelines, banks will be required to settle claims related to bank accounts, lockers, and safe custody articles within 15 days of receiving the necessary documents.

If they fail to do so, banks will have to pay compensation — either additional interest or a fixed daily penalty, depending on the case. The move is intended to create a uniform, hassle-free process across all banks and provide timely relief to grieving families.

Objective of the New Rule

According to the RBI, the primary goal is to simplify and standardise the claim process for nominees and legal heirs, ensuring they do not face unnecessary delays or procedural hurdles.

The draft circular, titled Reserve Bank of India (Settlement of Claims of Deceased Customers by Banks) Directions, 2025, was released for public feedback, with suggestions invited until 27 August 2025.

Standardised Claim Process

Under the proposed framework, banks will have to:

• Prepare standardised claim forms for deceased customer settlements.

• Make these forms available at all branches and on their official websites.

• Provide a clear, step-by-step claim process along with a list of required documents.

Claims Where Nominee is Registered

If a nominee is recorded in the account or locker:

• The claimant will only need to submit the claim form, death certificate, and proof of identity and address.

Claims Without a Nominee

Where no nominee is registered:

• For claims up to ₹15 lakh, a simplified process will be followed.

• Additional documents such as an indemnity bond and no-objection letters from other legal heirs will be required.

• For claims exceeding ₹15 lakh, legal documents like a legal heir certificate or succession certificate will be mandatory.

Locker Settlement Rules

For locker-related claims, RBI has also set a strict timeline. Once all required documents are submitted, banks must fix a date for inventory preparation within 15 days.

Compensation for Delays

If the delay is due to the bank’s fault:

• For deposit-related claims, banks must pay an additional 4% annual interest over and above the prevailing bank rate.

• For locker or safe custody articles, banks must pay ₹5,000 per day as a penalty.

Benefits for Customers

RBI believes these rules will eliminate inconsistencies in how banks handle such claims, improve customer service standards, and ensure that bereaved families receive timely access to funds and valuables.

The new rules will officially come into effect from 1 January 2026.

Key Takeaways:

15-day deadline for banks to settle deceased customer claims.

Compensation for delays — interest on deposits or daily penalty for lockers.

Simplified documentation when a nominee is registered.

Uniform process across all banks to prevent procedural delays.

Effective from January 2026.

This step is expected to bring much-needed clarity and speed to an area where delays have long caused stress for grieving families.