Finsamudra Desk14mo ago

RBI cuts claim settlement to 15 days, scraps legal docs for accounts up to ₹15 lakh

Banks must now settle deceased customer claims in a fortnight with just three documents. Non-compliance triggers interest penalties and daily fines.

15 daysClaim settlement window

Economy1 min read

🚨 RBI Simplifies Claim Settlement – Just 15 Days, 3 Documents — Image: Finsamudra LinkedIn archive

₹15 lakhMaximum claim amount (no legal docs needed)

₹5,000Daily penalty on locker claim delays

The RBI has overhauled claim settlement rules for accounts of deceased customers, removing barriers that historically extended resolution timelines. Claims up to ₹15 lakh can now be processed without succession certificates, surety bonds, or other legal documents—a significant departure from prior practice.

Banks need only three pieces: a completed claim form, the customer's death certificate, and the claimant's ID or address proof. This stripped-down document set aims to reduce friction for families navigating bereavement while managing finances.

The 15-day settlement window is now mandatory, backed by enforcement teeth. Banks that miss the deadline face interest at Bank Rate plus 4 percentage points on the delayed amount. Locker claim delays incur an additional ₹5,000-per-day penalty.

The move reflects RBI's stated intent to make banking more customer-centric and transparent. However, lenders have flagged legitimate concerns: outdated nominee records and unclear instructions could open the door to fraudulent claims or disputed payouts, creating operational and reputational risk.

Why it matters

For DSAs and loan connectors, faster claim settlement on deposit accounts simplifies estate resolution for borrower families and reduces friction in the credit ecosystem. When bereaved households can access funds quickly, it strengthens their ability to service or repay outstanding loans—a material factor in portfolio risk management.

Banks and NBFCs must now invest in robust nominee verification workflows and digital claim processes to hit the 15-day target without breaching fraud safeguards. The penalty structure creates hard economics: missing deadlines drains capital via interest payout and daily fines, forcing lenders to prioritize claims processing as a compliance cost center.

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