Transfer of Bank Account of Deceased – Detailed Guide
Transfer of Bank Account of Deceased – Succession Planning
The Banking Regulation Act has provided for the nomination of depositors moneys in Banks to transfer the bank account of deceased. As per Sections 45-ZA and 45-ZB of the Banking Regulation Act, 1949, the following:
- Where a deposit is held by a banking company to the credit of one or more persons, the depositor or, as the case maybe all the depositors together, may nominate, in the prescribed manner, one person to whom in the event of the death of the sole depositor or the death of all the depositors, the amount of deposits may be returned by the banking company.
- Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether testamentary or otherwise, in respect of such deposit, where a nomination made in the prescribed manner purports to confer on any person the right to receive the amount of deposit from the banking company, the nominee shall, on the death of the sole depositor or, as the case may be, on the death of all depositor, become entitled to all the rights of the sole depositor, or as the case may be, of the depositors, in relation to such deposit to the exclusion of all other persons, unless the nomination is varied or cancelled in the prescribed manner.
Based on the Banking Regulation Act, Banking Companies (Nomination Rules, 1985 and Co-operative Banks (Nomination Rules), 1985 have laid out procedures for nomination and transfer of bank account. Typically, only one person can be appointed as a nominee for a bank account. However, for safety lockers, more than one nominee can be appointed by joint hirers separately.
Owner of Money in Account
The nominee of a bank account cannot claim absolute right over the money in a bank account. The nominee is only allowed to operate the bank account of the deceased and receive the money. However, the money in the account of the deceased must pass as per the succession law applicable to the deceased.
Joint Account
In case of joint account, the ownership and control of a bank account would pass on to the surviving member. Hence, if money in a bank account must go to only one specific person, then its better to have a joint account with that person with “either or survivor” or “former or survivor” mode.
Visit IndiaFilings.com to create a Will or know more about succession planning in India.
