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CS Executive · Setting Up of Business, Industrial and Labour Laws · Financial Services Organization

Ravi deposited money with a non-banking financial institution in his sole name and nominated his sister Meena. Ravi died, and a distant cousin claims the deposit under a will. Under the RBI Act, 1934 provisions on nomination by depositors, who is entitled?

Meena, the nominee, is entitled. Section 45QB(2) of the RBI Act provides that despite any other law or testamentary disposition, the nominee becomes entitled to the deposit on the sole depositor's death to the exclusion of all others, unless the nomination was varied or cancelled in the prescribed manner.

  1. AThe cousin, because a will overrides nomination
  2. BMeena, as nominee, to the exclusion of all others, unless the nomination was varied or cancelled as prescribedCorrect
  3. CBoth equally
  4. DThe Central Government

Explanation

Section 45QB(2) says that despite any other law or disposition, including testamentary, the nominee becomes entitled to all rights of the sole depositor to the exclusion of others unless the nomination is varied or cancelled as prescribed. The will therefore does not prevail.

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