Legal Question in Banking Law in India

Right of legal heir supercedes the nominee. Nominee is only entitled to receive the amount. Legal heir has the full right to sue against nominee and recover the money without giving a single penny

he is a custodian and duty bound to divided it amongst legal heirs.

Though the language of Sec.45ZA and B of the Banking Regulation Act states that notwithstanding anything contained in any other law, testament etc., the nominee is entitled to all the rights the depositor had in the deposit, the Supreme court ruled that the nominee is only an agent to receive the deposit and the rights of legal heirs are there for them to claim the same from the nominee. Unless this SC verdict is changed by a larger bench, we have to hold that the rights of the legal heirs to the deposit is not affected by the nominee receiving the proceeds from the bank concerned.