Category Archives: Latest Updates

Latest RBI Circular Dated 26.09.2025

Reserve Bank of India vide its Circular bearing No. RBI/2025-26/82 DoR.MCS.REC.50/01.01.003/2025-26(Settlement of Claims in respect Deceased Customers of Banks) Directions, 2025 has reviewed and issued revised Regulations to streamline the procedures and standardise the documentation to facilitate expeditious settlement of claims  by banks upon death of a customer and to minimise hardship to family members.

The circular applies to all commercial and co-operative banks in respect of deposit accounts, safe deposit locker and articles in safe custody for deceased customer; but not applicable to Government Savings Schemes opened in Banks like Senior Citizen Savings Scheme (SCSS) , Public Provident Fund ( PPF).

To simply the settlement, RBI has fixed a threshold limit i.e. Rs. 5 lakhs for co-operative Bank and Rs. 15 lakhs for other banks claims and to minimise the difficulties faced by nominees, survivors and legal heirs.

The Circular covers various situations and important aspects are mentioned hereunder :

A. Settlement of Claims in Deposit Accounts of deceased Depositor

• Accounts with nominee(s)/survivorship clause;
  Banks will not insist on production of legal documents such as Succession certificate, Letters of Administration, Probate of Will etc., and/or not seek any bond of indemnity/surety.
  Documents required will be Claim Form (Annex I-A),Death Certificate, Identification and Address Proof of nominee
• Accounts without nominee/survivorship clause but within threshold limit and having no contesting claims Documents required will be Claim Form (Annex I-B) , Death Certificate, Identification and Address Proof of Nominee ,Bond of Indemnity, No objection from other legal heirs, Legal heirship certificate.
• Claim amount above the threshold limit; Documents required will be Succession Certificate or Legal Heirship Certificate, Affidavit by an independent person well known to the family of deceased in the requisite format.
• Claims involving Will without any dispute;Documents required will be Probate of Will/ Letters of Administration. Banks are free to exercise discretion to act as per “ Will ”, if Bank is satisfied about genuineness of Will and provided Will is not inconsistent with applicable laws and there is no dispute regarding the Will amongst legal heirs/beneficiaries.

B. Claims in Safe deposit locker and Articles in safe custody of deceased Customer:

• Claims with Nominee(s)/Survivors(s): Banks shall give access to the locker to such nominee(s) with liberty to remove contents of the locker. If locker was hired jointly, then the Bank shall give access of the locker and the liberty to remove the contents jointly to the nominee(s) and the survivors(s). Bank shall follow the mandate in the event of death of one or more of the joint locker hirers as recorded in the bank records. Banks have been asked to ensure that it is made clear that access and liberty to remove the contents from the locker is given to them only as a trustee of the legal heir  and shall not affect the right or claim which any person may have against the nominee(s)/ survivors(s) to whom the access is given.
• Cases without Nominee/Survivorship clause: Banks have been mandated to follow a simplified procedure for settlement of claims in safe deposit lockers provided there is no dispute. Documents required will be Succession Certificate, Letters of Administration, Probate of Will, etc. Bond of Indemnity from the nominee(s)/survivor(s) in case of dispute or any discrepancy in nomination.

In all other cases, the procedures as mentioned in the settlement of claims pertaining to the deposit account will be applicable to the claims regarding the safe deposit locker.

Section 2(b) of the Indian Succession Act, 1925 defines ‘Codicil’ as follows:-

“A Codicil is an instrument made in relation to a Will, and explaining, altering or adding to its dispositions and shall be deemed to form part of the Will”.

In simpler words, A Codicil is a written document that makes specific modifications to an existing Will. A Codicil does not replace the original Will.

Modifications generally done by way of a Codicil are:-

• Changing the Executor appointed in the Will;
• Deletion or Addition of beneficiaries;
• Altering bequests.

How to execute a Codicil:-

Chapter II, Sections 59 to 62 of Indian Succession Act, 1925 deals with Wills and Codicils.

Chapter III, Section 63 deals with execution of unprivileged Wills.

Before we delve into the aspect of requirements for execution of Codicil, we will briefly explain what is privileged Will and unprivileged Will.

In common parlance, the same can be explained as follows:-

• Privileged Wills – can be executed by any soldier employed in an expedition or engaged in actual warfare, or an employed airman or any mariner being at sea.
• Unprivileged Will –  can be executed by all other common persons other than soldier, mariner or airman.
• The mode of making a privileged and unprivileged Will are different. Section 63 of Indian Succession Act, 1925 lays down the procedure for execution of unprivileged Will. Though there is no dedicated section for execution of Codicil, the procedure prescribed under Section 63 for execution of unprivileged Will has to be followed.

Requirements for executing a Codicil:-

• Ensure that witnesses are present when you sign the Codicil and that they sign in your presence and each others presence. The date, time and place must also be clearly provided for.
• Contradicting the terms of the last valid and existing will :- Codicils Can inadvertently create when conflicts with your Original Will if not carefully drafted. Example – If, in your existing Will, you have bequeathed your house to your daughter and in your Codicil you bequeath the same house to your son, without revoking the original bequest, this would amount to contradiction and may be interpreted as suspicious circumstances and can be challenged in the court of law. Therefore, the Testator should review the entire Will before proceeding to prepare a Codicil and must identify and address provisions that might conflict with the proposed changes.
• Usage of legal Jargon or phrases which may be misinterpreted:- Ideally, clear and simple language should be used while drafting either a Will or Codicil. The language used should be unambiguous and must clearly statewhat is being added or modified or completely replaced in the Codicil.

How many Codicils can one make to a will:- 

The law does not specify a legal limit to the number of Codicils one can add to a Will. But for all practical considerations, we suggest restraint. Multiple Codicils increase complexity and the risk of contradiction and confusion.