The question of nominee or legal heir in Bangladesh comes up in almost every family after a death: when someone dies leaving money in a bank, a savings certificate, a provident fund or an insurance policy, does it go to the person named as nominee, or to the heirs under the law of succession? The honest answer is that the law is divided. The nominee is the person the institution pays first, but under the law of inheritance the heirs are the people who are entitled to the money.
Nominee and legal heir: what is the difference?
A nominee is a person the account holder names in writing, usually on the account opening form, to receive the money if the holder dies. A legal heir (successor) is a person who inherits under the personal law of the deceased: Muslim law, Hindu law or the Succession Act, 1925, depending on religion.
The two can be different people. A nominee may be a spouse, a child, a sibling or even a friend, while heirs are fixed by law and cannot be chosen.
What the law says on bank accounts
Section 103 of the Bank Companies Act, 1991 lets a depositor name a person to receive the deposit after death. The provision is read as giving the nominee priority over other persons in receiving the deposit. Once the bank pays the nominee, its obligation for that deposit is treated as fulfilled. dhakatribune
Bangladesh Bank has backed this position. It has directed financial institutions to pay the deposit to the nominee or nominees after the death of the account holder, including in joint accounts. bankinfobd
What the High Court said
The courts have taken a different view on who finally owns the money. In a well-known case, a Bangladesh Bank officer had named his second wife as nominee for savings certificates worth Tk 30 lakh. In 2016 the High Court Division refused to let her take the whole amount as nominee, and directed that the money be distributed among the legal heirs on the basis of succession certificates from the lower court. dhakatribune
The reasoning was that the nominee merely holds the money as a trustee, and the money must be divided among the heirs under Shariat law in the case of Muslims. thedailystar
That is not the end of the story. The High Court judgment was later stayed by the Appellate Division, and Bangladesh Bank issued a circular in 2017 restating the position in Section 103. A 2022 commentary described the matter as pending before the Appellate Division for final decision. I could not confirm a final Appellate Division ruling, so please check the current status before relying on either side. legalcounselbdbusinesspostbd
In practice: what banks do
Banks are caught between two positions. In practice, once a bank learns of the death, the account is marked as a deceased account and barred from transactions, and the bank then decides whether to pay the nominee directly under Bangladesh Bank’s instructions or to ask for a succession certificate. Many banks pay the nominee first, and heirs who disagree then go to court. thefinancialexpress
Other types of money
The rules differ by type, so check which law applies to each asset.
- Savings certificates (Sanchayapatra): The Government Savings Banks Act, 1873 and the savings certificate rules govern nomination. Under the older reading of that Act, the nominee took the money to the exclusion of heirs, and heirs inherited only where there was no nominee, in which case they needed a succession certificate under the Succession Act, 1925. The courts and rules have developed since then, so verify the current text. bdjls
- Insurance: Nomination is governed by the Insurance Act, 2010. Commentators note that the Act is silent on the rights of the heirs. slideshare
- Co-operative society shares: The Co-operative Societies Act, 2001 gives the rights in the shares to the person nominated, under Section 40. businesspostbd
- Provident fund and pension: These depend on the rules of the specific fund or employer. Read the fund’s own rules.
If there is no nominee
If no nominee was named, or the nominee has died, the money belongs to the estate and passes to the legal heirs. They normally need a succession certificate from the District Judge’s court under the Succession Act, 1925 before the bank, fund or insurer will release the money.
How the heirs share under Muslim law
For Muslims, the money is divided by the Quranic shares. A general guide, which varies with who survives the deceased:
- Wife: one-eighth if there is a child, one-fourth if there is none.
- Husband: one-fourth if there is a child, one-half if there is none.
- Mother: one-sixth if there is a child, otherwise generally one-third.
- Father: one-sixth where there is a son, plus the residue in some cases.
- Sons and daughters: share the residue, with each son receiving twice a daughter’s share. A sole daughter takes one-half, and two or more daughters together take two-thirds where there is no son.
Under Section 4 of the Muslim Family Laws Ordinance, 1961, the children of a son or daughter who died before the deceased take the share their parent would have received. Hindus and Christians follow their own succession laws.
Practical advice
If you are the nominee: Collect the money, but treat it carefully. Keep a record of what you received and be open with the other heirs. Taking everything for yourself can lead to a lawsuit, as the 2016 case showed.
If you are an heir: Obtain the death certificate and a succession certificate, and notify the bank in writing of the death and of your claim. If the nominee has withdrawn the money, you may sue for your share in the civil court.
If you are planning ahead:
- Name a nominee, but also tell your family what you intend.
- Keep nomination forms up to date after marriage, divorce, birth or death.
- Remember that nomination is not a will. Under Muslim law, a will generally covers only up to one-third of the estate and cannot favour an heir without the others’ consent.
Frequently asked questions
Who gets the money first, the nominee or the heir?
In practice, banks usually pay the nominee first under Section 103 and Bangladesh Bank’s directions.
Does the nominee keep the money?
Not necessarily. The High Court has held that the nominee holds it for the heirs, but that judgment was stayed on appeal.
Can a nominee who is not a family member take the money?
The nominee can be paid, but heirs may still claim their share from the nominee through the court.
What if there is no nominee?
The heirs inherit, usually after obtaining a succession certificate.
Can heirs challenge a nomination?
They may bring a civil suit for their share. The outcome depends on the type of asset and the current law.
This article gives general information only and is not legal advice for any specific case. The law on nominees and heirs is under development, so please consult a qualified advocate about your situation.