Nomination and Succession for NRI Bank Accounts, Deposits and Demat: Who Actually Gets the Money When You Die

Your father held an NRE fixed deposit of Rs 40 lakh in Pune, a demat account with Rs 18 lakh of shares, and an NRO savings account. He named your elder brother as sole nominee on all three, years ago, almost as an afterthought when the forms asked. He has now passed away, and there are three siblings. Your brother believes the money is his because his name is on the nomination. He is wrong, and the gap between what a nominee thinks they own and what the law actually gives them is where families that get along stop getting along.

The 30-second answer: A nominee on an NRI bank account, deposit or demat is a trustee, not an owner. The Supreme Court confirmed this in Shakti Yezdani (decided December 14, 2023): nomination is not a third mode of succession. On death the bank pays the nominee because the nominee gives a valid discharge, but the nominee must hand the money to the legal heirs under the will or succession law. Every NRI account should still carry a nominee, because without one heirs face a slow claim backed by a succession or legal heir certificate. From November 1, 2025 you can name up to four nominees on a deposit under the Banking Laws (Amendment) Act, 2025, and SEBI already allows up to ten on a demat account. NRI heirs repatriate inherited NRO balances up to USD 1 million per financial year; inherited NRE and FCNR balances stay freely repatriable.

If you have already searched this, you know the headline: nominee is not owner. What that one-liner hides is everything that decides whether your estate settles in two weeks or two years, and almost all of it is NRI-specific. This guide goes past the slogan to the parts that cost money and time: why the trustee rule is now beyond argument, where the four-nominee reform helps and where it changes nothing, what the bank will and will not release without a court, how an identical inheritance behaves completely differently in an NRI heir's hands versus a resident sibling's, and the exact documents an heir in Toronto or Dubai has to courier to India. It assumes you know what NRE, NRO and FCNR accounts are; if not, the accounts guide is the place to start.

A nominee is a postman, and the Supreme Court has now said so twice over

The single fact that resolves most family fights is this: the nominee is the person the bank is allowed to pay, not the person who gets to keep the money. Those are different legal questions, and Indian law keeps them apart deliberately. The institution wants a clean exit. When it pays the registered nominee, it is discharged and can never be dragged into the succession fight that may follow. That is the entire purpose of nomination, and the courts have been blunt that it is a payment facility, nothing grander.

This was genuinely contested for two decades. A line of Bombay High Court reasoning had suggested that a nomination of shares under Section 109A of the Companies Act could vest ownership in the nominee, overriding the will. The Supreme Court buried that argument in Shakti Yezdani v. Jayanand Salgaonkar, decided December 14, 2023 (you will see it cited as a 2024 judgment because that is when it was reported). The facts were exactly the scenario NRIs fall into: a man left both a registered will and separate nominations on his securities and fixed deposits; the nominees claimed the lot, the will's beneficiaries said otherwise. The Court held that nomination is not a third mode of succession. It does not displace testamentary succession (your will) or intestate succession (the personal law that applies when there is no will). The nominee receives so the company or depository gets a valid quittance, then holds for the heirs. The High Courts have kept applying the same logic specifically to bank deposits since.

Put plainly, this is what the trustee rule does to three common setups. Name your brother as nominee but leave everything to your children in your will, and your children own the money; your brother, having received it, is legally bound to hand it over. Name your spouse as nominee and die without a will, and your spouse receives the balance but holds it for all the Class I heirs under the Hindu Succession Act 1956, typically spouse, children and mother in equal shares, not for herself alone. Name the person who is in fact your sole heir, and there is no conflict at all; this is the clean, common case, and it is the one you should engineer on purpose.

There is one exception worth flagging precisely, because people over-apply it. For a few instruments the nominee has historically taken something stronger than trusteeship: a cooperative society membership under certain state laws, and employee provident fund and gratuity nominations under their own statutes. Those carve-outs do not travel. For bank deposits, demat securities and company shares, the trustee rule governs. Do not let a relative wave the PF logic at your bank account.

What the four-nominee reform fixed, and the bigger number for demat

For decades a bank depositor could name exactly one nominee per account, which is why so many NRIs funnelled everything through a single sibling and created the mess this guide is about. The Banking Laws (Amendment) Act, 2025 changed that. The nomination provisions came into force on November 1, 2025, and you can now name up to four nominees on a deposit account, a locker, or an article in safe custody.

The mechanics matter for how you should actually use it. For deposit accounts you can make a simultaneous nomination: up to four people, each assigned a fixed percentage that must total 100, say two children at 50% each. That is the lever NRI families want, because it lets the bank pay each child directly instead of routing the whole balance through one person who then has to redistribute (and might not). Lockers and safe-custody articles can only use successive nomination, where you rank people and the next becomes operative only if the one above has died. The operational forms sit in the Banking Companies (Nomination) Rules, 2025.

Here is the part most coverage misses entirely. Your demat account is already more generous than your bank account. Under SEBI's circular of January 10, 2025, you can register up to ten nominees on a demat account or mutual fund folio, raised from the earlier limit of three. So if your wealth is mostly in securities rather than deposits, the splitting tool you want is the demat nomination, not the bank one, and it has been available longer and goes further. Refresh both: a single nominee registered a decade ago is the commonest defect I see.

What none of this changes is ownership. Four nominees on a deposit, ten on a demat, every one of them still receives as a trustee for the legal heirs unless they happen to be the heirs. The reforms upgraded the plumbing. They did not touch who owns the water.

Why you still need a will even after you have done all that

If the nominee never owns the money, you might ask why nomination matters at all. Because nomination and a will solve two different problems, and you need both pointed at the same people.

The nominee solves speed of release. With a valid nominee, the bank pays out against a death certificate and a short claim form, and is now on a clock. Under the RBI (Settlement of Claims in respect of Deceased Customers of Banks) Directions, 2025, notified on September 26, 2025 and to be implemented by every bank no later than March 31, 2026, a deposit claim where a valid nominee exists must be settled within 15 calendar days of complete documents, with penal interest at Bank Rate plus 4% if the bank drags its feet. For demat, transmission to a registered nominee typically completes in about 7 working days with no charges.

The will solves who keeps it. It is your instruction on ownership, and under Shakti Yezdani it is the instruction that wins. Skip the will and ownership is decided for you by the personal law that applies: the Hindu Succession Act 1956 for Hindus, Buddhists, Jains and Sikhs (Class I heirs share equally); the Indian Succession Act 1925 for Christians and Parsis; the applicable Muslim personal law, with its fixed shares, for Muslims. That default may not be what you want, and it gives your family no room to honour what you actually intended.

The families that end up in court are almost always the ones where the nomination and the will named different people, or where there was neither. So the honest framing is that these are the two cheapest pieces of estate planning an NRI can do, they take an afternoon, and they have to agree with each other. The NRI estate planning and wills guide covers drafting a will that holds up across jurisdictions.

What the bank releases when there is no nominee and no will

This is the expensive case, and it is common, because plenty of NRIs opened accounts in a rush and never filled the nomination box. With no nominee, no surviving joint holder and no will, two things must be proven before the bank moves: that the holder has died, and who the heirs legally are. How painful that is turns entirely on the amount.

The 2025 RBI directions draw a friendly line. For balances up to Rs 15 lakh at a commercial bank (Rs 5 lakh at a cooperative bank, and a bank may set a higher internal limit), heirs claim with a claim form, the death certificate, an officially valid identity document, an indemnity bond, and a no-objection or disclaimer letter from the non-claimant heirs, often with a legal heir certificate or an affidavit. The bank cannot demand a succession certificate or a third-party surety within this limit, and the 15-day clock applies. Above Rs 15 lakh, or wherever heirs dispute, the bank will require a succession certificate, a probated will, or a letter of administration, and the threshold relief evaporates.

The relief is real but narrow. It lets the bank pay obvious heirs quickly for modest sums without sending anyone to court. It does not answer the underlying succession question for a large estate, where someone is going to a civil court whether they like it or not. For an NRI family scattered across Dubai, London and Toronto, who cannot casually fly in to swear an affidavit before a tehsildar, that distinction is the difference between a clean settlement and a year of apostilled paperwork.

Your residency does not change your share. It changes what you can do with it

Indian succession law is indifferent to your passport. An OCI card, a Canadian citizenship, thirty years abroad, none of it shrinks or enlarges your inheritance. An NRI child and a resident child take exactly equal shares under the Hindu Succession Act. The difference between them is not how much they inherit; it is what FEMA lets them do with it afterwards, and that is where the real NRI content lives.

When a resident heir inherits an Indian balance or securities, the money simply moves into a resident account. No repatriation question, no USD 1 million cap, no Form 15CA. Domestic money, domestic hands. When an NRI or OCI heir inherits, FEMA's non-resident rules attach to the asset. Inherited deposit balances are credited to the heir's NRO account. Inherited shares are transmitted into the heir's NRO demat, on a non-repatriable basis by default; an NRI cannot park inherited Indian securities in a resident demat. And inherited NRE or FCNR balances are the case worth knowing cold: because that money was foreign-sourced, its freely repatriable character follows it to the NRI heir. Everything that lands in NRO is capped; NRE and FCNR money that passes as such is not.

FEMA is also more permissive on inheritance than most NRIs assume. An NRI or OCI can inherit any Indian asset, including agricultural land, even though they are barred from buying agricultural land. The catch sits on the way out: inherited agricultural land can be sold only to a resident, and those particular proceeds cannot be repatriated.

The USD 1 million route, and the trap of treating it as one shared bucket

The question every NRI heir asks is the same: I have inherited money in India, how do I get it to my account in London or Dubai? The answer is the standard NRO repatriation channel, applied to inherited funds. An NRI or OCI heir can repatriate up to USD 1 million per financial year (April 1 to March 31), net of Indian taxes, from the NRO account, with no RBI approval below that ceiling. The bank will not move a rupee of it without documentary proof of inheritance: a will, a succession certificate, or a legal heir certificate.

Two points NRIs routinely get wrong, and both cost money.

First, inheritance is not income. India abolished estate duty in 1985 and has had no inheritance tax since, so receiving the money creates no tax bill in itself. What is taxable is what the asset earned, the NRO interest, dividends or rent that accrued, and any capital gain when the heir later sells an inherited asset. The repatriation is "net of taxes" on those, not on the inheritance principal. This is why an heir filing Form 15CA can often skip Form 15CB where the only thing moving is inheritance principal below Rs 5,00,000 of taxable remittance, though banks frequently ask for it regardless. From April 1, 2026 these forms are renamed Form 145 and Form 146 under the Income Tax Act, 2025.

Second, the USD 1 million ceiling is per person, per financial year, but it is a single pooled bucket for that person. Inheritance, rent, dividends and sale proceeds all draw on the same USD 1 million. The flip side is the planning point most people miss: a large estate split across three NRI children can leave India at up to USD 3 million in one year, because each child remits from their own NRO account against their own share. The cap only bites when one person tries to push more than USD 1 million out in a single year, and even then RBI approval is available case by case. The full step-by-step is in the NRO repatriation guide.

Watch how the same estate splits when the nominee is wrong

The cost of a careless nomination is easiest to see with money on it. Take Mr Sharma, an NRI in Dubai, who held an NRE fixed deposit of Rs 50,00,000 and years ago named his brother Vikram as sole nominee. His will, written later, leaves his estate equally to his two children, both NRIs in Canada. He dies without updating the nomination.

The bank pays the full Rs 50,00,000 to Vikram against the death certificate and claim form, inside the 15-day window. The bank is done; it has its discharge. But Vikram is a trustee, not the owner. Under the will the two children own Rs 25,00,000 each, and Vikram is legally obliged to transfer it. If he refuses, the children can sue to recover, with the will and Shakti Yezdani squarely behind them. Because the deposit was NRE, the money keeps its freely repatriable character, so once it reaches the children as NRI heirs they can move their Rs 25,00,000 each abroad with no USD 1 million restriction and no Form 15CA/15CB, since NRE-origin funds carry no Indian tax to certify. Had Mr Sharma simply named his two children as nominees at 50% each, which the four-nominee rule has allowed since November 2025, the bank would have paid each child Rs 25,00,000 directly, and nominee and owner would have matched. One ignored form put Rs 50 lakh in the wrong hands first and seeded an avoidable lawsuit.

Now run the harder version, where there is no nominee at all and the heirs straddle the FEMA line. Mrs Iyer dies intestate, leaving an NRO savings balance of Rs 22,00,000 and demat holdings worth Rs 30,00,000. Her two Class I heirs under the Hindu Succession Act are a son in London (NRI) and a daughter in Pune (resident), who inherit equally.

The deposit is above the Rs 15 lakh threshold, so with no nominee the bank requires a succession certificate (or, at its discretion, a legal heir certificate with affidavit). The siblings apply jointly and should budget three to six months plus court fees set as a percentage of the estate. Once issued, each heir's Rs 11,00,000 is credited, the daughter's into a resident account and the son's into his NRO account. The shares cross the Rs 5 lakh demat threshold too, so transmission of the Rs 30,00,000 needs the transmission request form, the death certificate, the succession certificate, and each claimant's own demat client master report. The daughter receives Rs 15,00,000 of shares into her resident demat; the son, an NRI, receives Rs 15,00,000 into his NRO demat. No capital gains tax arises on transmission itself; the original cost and holding period carry over, and tax only appears if and when an heir sells.

For the son, the repatriation is comfortable. His inherited cash share of Rs 11,00,000 is well inside his USD 1 million annual limit. He files Form 15CA, and because the Rs 11 lakh is inheritance principal rather than taxable income (only any accrued NRO interest is taxable), his taxable remittance is likely below Rs 5,00,000, so Form 15CB may not strictly be needed, though his bank may insist. Only if he later sells the inherited shares and the proceeds plus this cash were to exceed USD 1 million in one financial year would he need to split the repatriation across years or seek RBI approval, and these figures are nowhere near that. The daughter, as a resident, takes her Rs 11,00,000 cash and Rs 15,00,000 of shares with no repatriation question at all. The contrast is the whole point: identical shares, identical law on how much, two completely different sets of hoops on what next.

The three certificates, and which one the bank will actually accept

When there is no nominee and the amount is large, everything hinges on which document you produce, and they are not interchangeable.

A legal heir certificate comes from the local revenue authority (a tehsildar or equivalent). It is fast, often 15 to 30 days, cheap, and establishes who the surviving family members are. Banks accept it for smaller claims and routine purposes, but not reliably for large or contested movable assets. A succession certificate is issued by a civil court under the Indian Succession Act, 1925, and is purpose-built for debts and securities, which is precisely what bank deposits and demat holdings are. It is slower, three to six months, and carries court fees, but it is the instrument a bank will insist on for larger sums where there is no will. Probate validates a will; a letter of administration is granted where there is no will or no named executor. Probate is mandatory for wills falling under the original jurisdiction of the Bombay, Calcutta and Madras High Courts; elsewhere it is often not strictly required, though banks may still ask on a large estate.

The honest read on certificates: if the deceased left a clear, undisputed will, push the bank to settle on the will plus heir consent before you pay for probate, because the 2025 directions let banks proceed on an undisputed will. If there is no will and the sum is large, accept that a succession certificate and its months are coming, and start early.

The traps that catch NRI families specifically

A handful of edge cases account for most of the surprises, and they are worth holding in mind.

An "either or survivor" or "former or survivor" joint account lets the surviving holder keep operating after the other dies, the deceased's name simply removed against the death certificate. But survivorship is not ownership either. The survivor holds the deceased's share as a trustee for the heirs, on the same logic as a nominee. The joint accounts guide covers the mandate types.

A power of attorney dies with the donor, instantly. If you gave a relative a POA to operate your Indian accounts, it lapses the moment you die and cannot be used to withdraw or move a single rupee of the deceased's money. Heirs must use the claim process, not the old POA, and a relative who tries to operate on a dead donor's POA is acting without authority. See power of attorney for NRI banking and property.

If you name a minor as nominee, you must also appoint an adult to receive on the minor's behalf until majority. And the worst configuration, a will and a nomination naming different people, does not create ambiguity in law (the will governs ownership, the nominee merely receives first) but it does create a fight, because the person holding the cash and the person owed it are now different. Keep them aligned. Finally, a person who dies with no traceable heirs and no will can have the estate eventually escheat to the state, rare for an NRI with a family, but a reason the no-will-no-nominee combination is genuinely dangerous.

The honest read

Strip it to the slogan and then past it: a nominee is a postman, not an heir. The bank and the depository will hand your money to your nominee fast and cleanly, which is exactly why you should register one, and keep it current, on every NRE, NRO, FCNR and demat account you hold, and why you should use the four-nominee deposit facility from November 2025 and the ten-nominee demat facility from SEBI's January 2025 rule to pre-split larger balances at source. But the nominee does not own the money. Ownership is decided by your will, or, failing that, by the succession law that applies to you, and the Supreme Court closed that debate for good in Shakti Yezdani.

For an NRI, two further truths follow. Your foreign residency does not change your share, only the plumbing for moving it: inherited cash sits in NRO, inherited securities in an NRO demat, NRE and FCNR money keeps its repatriability, and you can take up to USD 1 million a year out per heir. And there is no Indian inheritance tax to fear; only the income and gains the assets produce are taxable.

So commit to the two cheap things now, this month, not someday. Register or refresh your nominees, and write a will that names the same people, with the same shares, in the same order. The estates that turn into litigation are almost always the ones where the nomination and the will pointed in different directions, or where there was neither. If your situation is a large estate, a blended family, or assets that span India and your country of residence, that is the point to pay a lawyer to draft the will properly, not to rely on a blog, this one included. Do not leave your family the version of this problem that ends in a courtroom.

Related guides

• NRE, NRO and FCNR accounts explained
• How to repatriate money from an NRO account abroad
• Joint accounts and mandates for NRIs
• Power of attorney for NRI banking and property
• NRI demat account setup
• Returning NRI account conversion
• NRI estate planning and wills
• NRI inheritance and estate tax
• Selling inherited property as an NRI: the tax
• Closing NRI accounts
• Banking guides hub
• Taxation guides hub

Disclaimers

This guide is general information for NRIs and OCIs, current as of June 2026, and is not legal, tax or financial advice. Succession is governed by the personal law applicable to the deceased and by the facts of each estate; nomination and claim rules are set by the RBI directions, the Banking Laws (Amendment) Act, 2025, SEBI circulars, depository rules and FEMA, all of which change. Court requirements for succession certificates, probate and letters of administration vary by jurisdiction within India. Repatriation limits and the Form 15CA/15CB (Form 145/146 from April 1, 2026) requirements are statutory and bank-specific in execution. Confirm the current position with your bank, your depository participant, a chartered accountant and a lawyer before acting on any estate, claim or repatriation.