Banks must settle a/cs, lockers and articles in safe custody of deceased customer within 15 days of claim: RBI

The Reserve Bank of India ( RBI) has said banks must settle deposit accounts, safe deposit lockers and articles in safe custody of a deceased customer within 15 days of claim, proposing hefty penalties for non-compliance.

In a draft circular, the central bank suggested banks pay the customer’s kin the bank rate plus 4% per year interest for the period of delay on settling deposits, and Rs 5000 per day for delay in settlement of lockers. The bank rate currently is at 5.75%.

These proposals are aimed at standardising the claims processes across the banking sector, maintaining uniformity and compensating the customer in case of inconvenience. The final guidelines are expected to be enforced by January 1, 2026.

The draft circular said that if a nominee exists, the nominee would have to furnish a deceased customer’s death certificate, claim form and a government ID card to access deposits. If no nominee exists, the customer will have to further provide a bond of indemnity signed by claimants, no objection from other legal heirs and a legal heir certificate or declaration by an independent person, the draft circular said.

“If any deposit related claim is not settled within the timeframe stipulated, then the bank shall communicate to the claimants the reasons for such delay… The reference date for reckoning the amount due and the prevailing bank rate shall be the date of receipt of all requisite documents from the claimant,” said the RBI draft circular published on August 6.

In case of a disputed will, documents of probate of will, letter of administration and succession certificate or court decree would be required. Banks can accept the will without any probate if the will is not disputed.

For settlement of the locker, nominees should provide a death certificate and official identity proof. For a case without a nominee, one would require a claim form signed by legal heirs, death certificate, address proof ,no objection from non-claimant legal heirs and legal heir certificate.

The RBI also said that this compensation is meant to provide relief to claimants and is not a regulatory penalty payable to the central bank. The draft circular mandates banks to make claim procedures transparent, user-friendly, and available both in-branch and online, with clear communication at every step.

"For us at RBI, the interest and welfare of the citizens of India is foremost," Governor Sanjay Malhotra said Wednesday while delivering his monetary policy statement. "We will be standardising the procedure for settlement of claims in respect of bank accounts, and articles kept in safe custody or safe deposit lockers of deceased bank customers. This is expected to make settlement more convenient and simpler.”