Can banks deny account opening without a nominee? RBI’s new rule from November 1 explained

No, a bank cannot deny or delay the opening of an account if the customer doesn't want to declare his/her nominee, according to the RBI's 'Nomination facility in Deposit Accounts, Safe Deposit Lockers and Articles kept in Safe Custody with the Banks) Directions, 2025'. These directions will be effective from November 1.

While customers have the right to opt out of nominating someone, they must either provide a written declaration or the bank must record the refusal in its system.

However, customers should declare their nominees when opening bank accounts, including for deposits and lockers, as it makes the transfer of assets easier in the event of their unfortunate demise.

The account opening application can be rejected only if other requirements for account opening are not met.

This article further explains what bank customers should know about RBI's nomination rules from November 1.

What are banks required to do?

Banks are required to provide the nomination facility at the time of account opening.

"At the time of account opening, a bank shall explicitly inform the prospective customer of the availability and purpose of the nomination facility and offer him/her the option to avail the same," RBI said.

"The bank shall also clearly explain to the prospective customer the advantages of the nomination facility, including but not limited to simplification of the claim process in the event of the account holder’s demise and facilitation of smooth and prompt transfer of funds to the nominee without legal complications," it added.

Customers can opt out of nomination

Banks are also required to provide an option to the customers to opt out of nomination at the time of account opening.

"If the prospective customer chooses not to avail the nomination facility despite being fully informed, the bank shall proceed to open the deposit account without imposing any restrictions, if otherwise found eligible, after obtaining a written declaration from the individual confirming that he/ she does not require the nomination facility at the time of account opening. If he/she refuses to provide the written declaration, the bank shall record the fact of refusal to submit written confirmation in the account opening records," RBI said.

Banks cannot deny or delay account opening if the customer refuses to declare his/her nominee.

"Under no circumstances shall a prospective customer be denied or delayed in opening an account solely on the ground of refusal to make a nomination, provided all other requirements for account opening are satisfactorily met," RBI said.