If the account holder's nominee also dies after the death of the account holder, who will receive the money? If you have this question, you're in the right place. Let's understand, based on RBI rules, who is the true heir of the money deposited in the bank after the death of the nominee.

The question often arises regarding money deposited in bank accounts: who is entitled to the money if both the account holder and their designated nominee die. The Reserve Bank of India (RBI) and banking laws have clear guidelines regarding this situation, ensuring that funds reach the rightful recipient safely even in such circumstances.

According to the rules, if both the account holder and the nominee pass away, the bank deposit is passed to the legal heirs. The nominee's role is merely that of a trustee, meaning they act as a conduit for the transfer of funds to the heirs, not the ultimate owner. This was justified by the Supreme Court in the 1984 case of Sarbati Devi vs. Usha Devi. If there is no nominee, the legal heirs directly inherit the property.

How is the heir decided?

Now the question is, if the heir is to receive the money, what are the rules for identifying the heir? The identification of heirs is determined in two ways. If the deceased made a will, the property is divided based on that will. In the absence of a will, relevant inheritance laws apply, such as the Hindu Succession Act, 1956, which determine who will inherit the property. Since succession rules vary across different religions, they are determined accordingly.

In such a situation, the heirs must file a claim to receive the money from the bank. Documents such as a death certificate, identity card, and legal heir certificate or succession certificate must be submitted. The bank may also require additional formalities, as per its regulations, to ensure that the money is disbursed to the rightful recipient.

In this situation the account remains unclaimed

If no one claims this amount for a long time, the account goes into the unclaimed category. According to RBI regulations, any unclaimed amount after 10 years is transferred to the Depositor Education and Awareness Fund (DEAF). However, even after this, the original heirs can claim the money at any time with the required documents.

The RBI has directed banks to keep the claim process in such cases simple and transparent, so that customers and their families don't face unnecessary hassle. This is why it's crucial to update nominees in a timely manner and maintain the necessary documents.

If a nominee is not made then who will get the money?

If you didn't nominate a nominee when you opened your bank account, the account holder's legal heirs are entitled to the funds upon their death. This right typically falls to parents, spouses, or children. However, to receive the funds, the person in question must provide the necessary documentation to prove their legal heirship. This includes submitting an identity card, proof of relationship, or other legal documents to ensure the funds are disbursed to the rightful recipient.

The process is different for joint accounts. If one account holder dies, the other account holder can assume full control of the account and has full rights. To do this, they must submit the deceased's death certificate to the bank. Once the documents are submitted, the bank updates the records and removes the deceased's name from the account.

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