RBI mandates 15-day deadline for settlement of claims on deceased customers’ bank accounts, lockers

Banks failing to comply must compensate nominees or claimants with interest or daily penalties for locker-related delays. The rules will be effective no later than March 31, 2026.
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On Friday, the Reserve Bank introduced updated guidelines requiring banks to settle claims on deceased customers’ accounts and lockers within 15 days, with penalties for delays in processing.

The new framework standardizes documentation and procedures across banks to enhance transparency and customer service quality. It replaces existing practices that varied between institutions.

These regulations, termed the Reserve Bank of India (Settlement of Claims in respect of Deceased Customers of Banks) Directions, 2025, must be implemented by all financial institutions before March 31, 2026.

The directives cover deposit accounts, safe deposit lockers, and items held in safekeeping by deceased customers. They establish clear timelines and obligations for financial institutions.

For accounts with nomination clauses or survivorship agreements, banks must release funds to designated beneficiaries immediately, as this constitutes full settlement of obligations.

Small Deposit Claim Simplification

For accounts lacking nomination details, institutions must follow streamlined procedures when balances fall below specified thresholds:

Cooperative banks will use a Rs 5 lakh threshold for simplified settlements, while other banks must use Rs 15 lakh thresholds or higher amounts they establish. For balances exceeding these limits, banks may require legal documents like succession certificates.

The framework also clarifies procedures for claims not qualifying for simplified processing and addresses safe deposit locker and custodial item settlements.

Mandatory Compensation Requirements

Financial institutions must complete deposit-related claims within 15 calendar days of receiving all documentation. Failure to meet this deadline requires banks to explain delays to claimants.

When delays occur due to bank error, institutions must pay interest compensation at rates not below the Bank Rate plus 4% annually on owed amounts for the delayed period.

For locker-related claims, banks face penalties of Rs 5,000 per day when inventory processes exceed 15 days after document submission.

Published on September 27, 2025