Nomination facility in Indian Banks

The Banking Companies (Nomination) Rules, 1985 framed under Banking Regulation Act, 1949 enable to accept nominations. Nomination can be made by the account holder or, as the case may be, by all the joint account holders together, in respect of an account held by them with a bank in India. The nomination can be made only in respect of a deposit held in the individual capacity as a holder of an office or otherwise. The nomination has to be made in favour of only one individual. The nominee may be a minor but in that case the account holder should, while making the nomination, appoint another individual (who is not a minor) to receive the amount of deposit on behalf of the nominee during his minority, in case of need. The nomination made can be varied or cancelled by the account holder any time during the currency of the account by filing an application in the prescribed form.
Nomination facility for non resident accounts
The nomination facility is also available to holders of non-resident accounts. However, in case of deposits held in FCNR and NRE accounts, the deceased account holders nominees (who could also be residents in India) would not be automatically entitled to the right of repartriation of the funds acquired by them. Similarly credit of the amount becoming payable to a nominee to his NRE/FCNR account requires prior permission of Reserve Bank of India. In such cases, the nominees are required to make separate applications to Reserve Bank of India, which would be considered in the light of the residential status of individuals nominees and the relevant Exchange Control Regulations. Utilisation of the funds in India by the nominees would not, however, need exchange control approval.
The forms prescribed for deposit accounts under the nomination Rules are for nominationForm D1, Form D2for cancellation and Form D3 for variation.
Remittance/Transfer of Funds to Non-Resident Nominees
The Banking Companies (Nomination) Rules, 1985 framed under Banking Regulation Act, 1949 enables banks to pay the amount standing to the credit of the deceased depositor to his nominee. Authorised dealers may allow remittance of funds lying in the NRE/ FCNR accounts of the deceased account holder to their non-resident nominees subject to the following conditions:
(i) Application in is submitted by the nominee (s).
(ii) A valid nomination has been registered in the banks record in favour of the nominees/s in confirmity with the provisions of the Banking Companies (Nomination) Rules, 1985.
(iii) The nominee continues to be non-resident at the time of the claim/remittance sought for from India and that the deceased depositor was non-resident at the time of his/her death.
(iv) All the legal heirs are non-residents. A signed declaration to the effect, duly witnessed, may be submiited by the nominee to the authorised dealer.
Applications in together with the documents/particulars mentioned therein received from the nominees should be scrutinized and after satisfying about the legality of the claim as per the internal guidelines, authorised dealers may settle the claim and allow transfer of fund to the extent of balance held in the deceased depositor’s NRE/FCNR accounts. All other cases which do not fulfill the aforesaid terms and conditions or where the amount in NRE/FCR account is claimed by a person other than the nominee, should be referred to the concerned Regional Office of Reserve Bank for prior approval by authorised dealer in supported by documents indicated therein together with the legal representation issued by an Indian Court.

Bank Accounts of NRI's Some details

Deposits under FCNR scheme were accepted by banks for maturities from 6 months to 3 years. Acceptance of deposits for shorter maturities was discontinued, in a phased manner and with effect from 15th February, 1994, deposits under FCNR scheme can be accepted only for a maturity period of 3 years. However, to enable to NRI depositors to continue with foreign currency deposits of shorter maturities, a new scheme known as Foreign Currency (Non-resident) Accounts (Banks) Scheme (FCNR (Banks) was introduced, with effect from 15th May, 1993. There is basically no difference for the depositor between these two schemes except the period of deposits.
For the banks accepting deposits under this scheme, there are a few changes. Exchange risk cover from Reserve Bank will not be available and will have to be borne by the banks themselves. There will be no obligation under the ‘Statutory Liquidity Ratio’ or priority sector lending. There is also no obligation for Cash Reserve Ratio. Resources mobilised under the scheme can be invested by the banks without any interest rate stipulation. However, non-resident depositors are not affected by these provisions.