NRI Account Nomination Rules & Succession Basics

Understanding the NRI account nomination rules is important for anyone who deals in money across borders. Many NRIs also worry about what will happen to their accounts if something unexpected occurs, particularly when family members are spread across countries. A clear nomination ensures your chosen beneficiary (i.e, nominee) can access your estate without stress, conflict, or delays (legal heirs still have rights). 

This guide covers how nomination and succession works, and the steps your family must take to keep your finances protected and easy to manage.

Why Nomination Matters for NRIs?

For NRIs, it is essential to have a valid nomination, as it helps avoid disputes among family members and long delays in claiming funds in India. The banks follow a detailed verification process when an NRI dies, and the process will only be extended if there is no nominee. 

NRI Account Types and Nomination Rules 

Nomination is applicable for all types of NRI accounts, that is, NRE, NRO and FCNR. Each has different categories of funds: NRE account funds are fully repatriable foreign income, NRO account funds are income earned in India, and FCNR deposits are fixed deposits in foreign currency. 

The NRI  account nomination rules are applicable for all these accounts, but the procedure can differ depending on the operating mode of the bank.

Most banks allow you to nominate your nominee while opening the account or later by submitting an account update request. The norms are equally applicable to joint accounts, where the modes, such as “Either or Survivor” for joint accounts, define who can operate the account and who gains access upon the death of the first holder. 

Who You Can Nominate in an NRI Account?

NRIs can nominate any person other than themselves, including resident Indians, other NRIs, or even a person of foreign nationality. A minor can also be nominated, but a guardian needs to be appointed in such a case to operate the account till the minor attains majority. Although it is a very common practice for NRIs to prefer nominating close family members residing in India, nominating someone living overseas might create practical hurdles, such as a delay in claim settlement and the requirement of document attestation and additional verification.

Nominee vs Legal Heir: What NRIs Often Misunderstand

Many NRIs assume that a nominee immediately becomes the owner of the money in an account, but this is not true. A nominee is a custodian who will receive the money only after the account holder’s death. The nominee is not a substitute for legal heirs who will continue to have a right over the proceeds as per the Indian Succession Act. The legal heirs may be the spouse, children, parents, etc., based on family structure.

If the account-holder has made a valid Will, it takes precedence over the nomination and specifies as to whom(s) the assets are to be ultimately inherited. Nominees only receive funds initially, and precedence rules may vary. 

NRI Account Nomination Rules 

The Reserve Bank of India (RBI) allows nomination in all NRE, NRO, and FCNR deposit accounts, and banks must offer this facility for all such accounts. All three account types permit a minor to be nominated (with a guardian appointed to receive funds on behalf of the minor), and under the latest nomination rules effective from November 1, 2025, depositors can name up to four nominees for each account instead of only one.(PIB)

RBI 2025 directs in a nutshell that banks should maintain clear nomination records and pursue a simplified, standardised claim process in the presence of a valid nominee. 

From 1 November 2025 onwards, the earlier requirement of compulsorily providing a nominee has been done away with, and accounts will not suffer any restrictions in case nomination is not provided.

NRI-specific guidelines, meanwhile, stress that adding a nominee is still necessary, as claims without nomination usually take more paperwork and longer verification. The revised guidelines provide for banks to follow specified timelines and accept a simplified claim form to mitigate delays and disputes for the family members of an NRI.

NRI Nomination Process: How to Add or Update Nominee 

While opening the NRI account, it will include the nomination form. This is a very simple form that lets you name a nominee to whom the amount is paid in case of your death. The NRI nomination in bank account process can be changed anytime, while opening or later, by submitting a fresh form duly signed.

For NRIs abroad, some banks make it compulsory for the documents to be attested by the Indian embassy/consulate or a notary in a foreign land and then send the same to India by courier. In case of a deceased NRI, the bank will ask for a death certificate and the nominee’s KYC.

Special Situations for NRIs (Minor Nominee, Nominee Abroad, Joint Accounts)

If you nominate a minor as a nominee on your NRI account, you will also need to appoint a guardian who shall receive the amount on behalf of the minor till the minor reaches 18 years of age.

Banks do allow non-resident nominees, but if the nominee resides abroad, their NRO bank account details and documentation are usually required, and this may delay the process.

If the joint accounts are held by multiple holders, nomination can only be exercised after the death of the last of the account holder(s) or in accordance with the way of operation “either or survivor” (as applicable).

Lastly, for NRIs who have accounts in foreign currency or with repatriation rights (such as NRE/FCNR), having a clear nomination ensures that after the death of the account holder, the funds can be transferred abroad within the permissible repatriation limit rather than getting delayed in the procedure of local succession. 

Succession Basics: What Happens When an NRI Passes Away

Upon the death of an NRI, the banks have a standard process to enable funds release. A nominee (if registered) has to also submit a claim with the death certificate,  KYC documents, and the bank's claim form.

In case there is no nominee or family members contest the claim, the bank may ask for a succession certificate or probate before processing. Once the documents are authenticated, banks usually honour claims within a reasonable time.

What Happens When There is No Nomination?

When there is no nomination in an NRI account, the bank can release funds to the legal heirs only. The heirs are required to submit the death certificate, KYC documents, and a succession certificate or court order in a number of cases before a claim can be processed. 

These processes take longer for those living abroad, as documents must be attested and couriered. If no claim, the funds are finally transferred to the Depositor Education and Awareness (DEA) Fund, which results in further delay.

Conclusion

A clear nomination is the simplest way for NRIs to safeguard their money and avoid any delays for their family in accessing their fund after their death. Understanding nomination rules for NRI accounts and the full NRI account nomination process across NRE,  NRO, and FCNR accounts would save you from disputes and heavy documentation procedures later. 

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FAQs

1.  Can I change my nominee later?

Yes, you are allowed to update your nominee or change your nominee at any time by filing a fresh nomination form.

2. Will the nominee become the owner of the funds in my account?

No. A nominee is only a custodian. The funds will be inherited by the legal heirs as per succession laws or as stated in your Will.

3. Can an NRI nominate a minor for his/her account?

Yes, but you have to name a guardian to look after the fund till the minor turns adult.

4. What if I don't have a nominee?

The fund will be released to the legal heirs by the banks, which require a succession certificate or court order.