NOMINEE AND THE OWNERSHIP - SUPREME COURT

NOMINEE OF BANK ACCOUNT AND THEIR RIGHTS IN SUCCESSION

The Supreme Court (SC) has clarified the nominee of a depositor in a bank does not get ownership of the money in the account after death of the depositor. The nominee gets exclusive right to receive the money lying in the account. It gives him all the right of the depositor as far as the depositor’s account is concerned, according to Section 45ZA of the Banking Regulation Act. But the banking law is not concerned with the succession. The money in the account will form part of the estate of the deceased depositor and devolve according to the rules of succession. In this case, Ram Chander vs Devender Kumar, one son was the nominee of his mother. After her death, he claimed he was the owner of the money in the account, to exclusion of his brother. The same rule will apply to government savings and other investments