Central

Section 9 of The Government Securities Act, 2006

(1)Notwithstanding anything contained in sections 7 and 8 or any other law for the time being in force, except the provisions of sub-section (2),--
1. (a)where a Government security other than in the form of promissory note or bearer bond is held by a person in his name or jointly with any other name or names, as the case may be, the sole holder or all the joint holders of the Government security together may nominate one or more persons in such form and in such manner as may be prescribed, who in the event of the death of the sole holder or the death of all the joint holders, as the case may be, would become entitled to the Government security and to payment thereon to the exclusion of all other persons, unless the nomination is varied or cancelled in the prescribed manner;
2. (b)where a nomination in respect of a Government security has been made in favour of two or more nominees and either or any of them is dead, the surviving nominee or nominees, as the case may be, shall be entitled to the Government security and payment thereon;
3. (c)where the nominee is a minor, it shall be lawful for the sole holder or all the joint holders of a Government security, as the case may be, to appoint in the prescribed manner any person in whom the Government security would be deemed to have vested in the event of death of such holder or joint holders of the Government security during the minority of the nominee;
4. (d)the recognition of right and claim of the nominee or nominees to the Government security held by a sole holder or joint holders, as the case may be, and any payment made by the Government or the Bank to the nominee or nominees shall constitute a full discharge and shall absolve the Government or the Bank of its liability in respect of the said Government security.
(2)Any nomination or appointment made under sub-section (1) shall become void if the nominee predeceases, or where there are two or more nominees, if all the nominees predecease the holder or joint holders of the Government security making the nomination.
(3)Where the amount due for the time being on a Government security is payable to two or more nominees and either or any of them dies, the title to the Government security shall vest in the survivor or survivors of those nominees and the amount for the time being due thereon shall be paid accordingly.
(4)A transfer of a Government security made in accordance with sub-section (2) of section 5 shall automatically cancel the nomination previously made: Provided that where a Government security is in the possession of a person either as a pledge or by way of security for any purpose, such possession shall not have the effect of cancelling the nomination, but the right of the nominee shall be subject to the right of the person so possessing it.
(5)The Government may, on the recommendation of the Bank, by notification in the Official Gazette, extend the facility of nomination to any Government security as may be specified therein.
(6)Nothing contained in sub-section (1) shall affect the right or claim which any person may have against the person whose right and title to a Government security is recognised by the Government or the Bank or to whom the payment of the amount due on the Government security is made by the Government or the Bank under sub-section (1).
(7)No notice of any claim of any person, other than the person or persons in whose name a Government security is held or the nominees thereof, shall be receivable by the Bank or the Government, nor shall the Bank or the Government be bound by any such notice even though expressly given to it: Provided that where any decree, order, certificate or other authority from a court of competent jurisdiction relating to such Government security is produced before the Bank or the Government, the Bank or the Government shall take due note of such decree, order, certificate or other authority.

Summary

Holders of a government security (other than a promissory note or bearer bond) can nominate one or more people to receive the security and payment upon their death.
If multiple nominees are appointed and some die, the surviving nominee or nominees are entitled to receive the title and payment.
If a nominee is a minor (someone under eighteen years old), the holder can appoint a person in whom the security will vest if the holder dies during that nominee's minority.
Making a payment to the nominee completely discharges the Government or the Bank from any further liability regarding that security.
A nomination becomes void if all the nominees die before the security holder or joint holders.
Transferring the security under Section 5(2) cancels the nomination, but pledging the security (holding the security as collateral for a loan) does not cancel it, making the nominee's rights subject to the pledgee's rights.

Practical examples

1Suman held a government stock certificate worth 8 lakh rupees. She nominated her son, Amit, and her daughter, Priya, in the prescribed form. Suman died on February 14, 2026. Priya had unfortunately died before Suman in 2025. Under the rules, the surviving nominee, Amit, became solely entitled to the security and received full payment.

2Rohan held a government bond and nominated his minor grandson, Kabir, who was 10 years old. Rohan appointed his daughter, Meera, to hold the bond on behalf of Kabir if Rohan died during Kabir's minority. When Rohan passed away on April 1, 2026, the bond vested in Meera as the appointed guardian for the minor nominee.

3Karan had a government bond with an active nomination in favor of his friend, Sunil. Karan needed a loan and transferred the bond to a bank on July 20, 2025, using the prescribed transfer form. This transfer automatically cancelled Sunil's nomination, meaning Sunil was no longer entitled to the bond if Karan died.

FAQ

1. Can a nomination be made for all forms of government securities?

No, nomination is available for government securities other than those in the form of a promissory note or a bearer bond, unless the facility is specifically extended by the Government.

2. What happens if a nomination is made to multiple nominees and one of them dies before the holder?

The title vests in the surviving nominee or nominees, and any payment due will be made to them.

3. Does transferring a government security cancel a nomination?

Yes, transferring a government security under Section 5(2) automatically cancels any previously made nomination.

4. Does a pledge on a government security cancel a nomination?

No, holding a security as a pledge or collateral does not cancel the nomination, but the nominee's rights will be subject to the rights of the pledgeholder.

5. Can the Bank ignore a third-party claim notice if the security has a nominee?

Yes, neither the Bank nor the Government is bound by any notice of a third-party claim. However, they must take note of any decree, order, certificate, or authority from a competent court.

Test yourself

Q1.Under Section 9 of The Government Securities Act, 2006, which of the following forms of government securities is explicitly excluded from the default nomination facility?

Q2.Under Section 9 of The Government Securities Act, 2006, if a holder nominates their minor child and wants to ensure the security is protected if the holder dies while the child is still a minor, what legal step can they take?

Q3.Under Section 9 of The Government Securities Act, 2006, what is the effect of transferring a government security in accordance with Section 5 of the Act on an active nomination?

Q4.Under Section 9 of The Government Securities Act, 2006, what happens to a nomination if a government security is placed in the possession of a person as a pledge or as collateral for a loan?

Q5.Under Section 9 of The Government Securities Act, 2006, if all nominees die before the holder of the government security, what is the legal status of the nomination?

Q6.Under Section 9 of The Government Securities Act, 2006, what is the legal effect of a payment made by the Government or the Reserve Bank of India to a validly appointed nominee upon the death of the holder?

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Central

Section 9 of The Government Securities Act, 2006

(1)Notwithstanding anything contained in sections 7 and 8 or any other law for the time being in force, except the provisions of sub-section (2),--
1. (a)where a Government security other than in the form of promissory note or bearer bond is held by a person in his name or jointly with any other name or names, as the case may be, the sole holder or all the joint holders of the Government security together may nominate one or more persons in such form and in such manner as may be prescribed, who in the event of the death of the sole holder or the death of all the joint holders, as the case may be, would become entitled to the Government security and to payment thereon to the exclusion of all other persons, unless the nomination is varied or cancelled in the prescribed manner;
2. (b)where a nomination in respect of a Government security has been made in favour of two or more nominees and either or any of them is dead, the surviving nominee or nominees, as the case may be, shall be entitled to the Government security and payment thereon;
3. (c)where the nominee is a minor, it shall be lawful for the sole holder or all the joint holders of a Government security, as the case may be, to appoint in the prescribed manner any person in whom the Government security would be deemed to have vested in the event of death of such holder or joint holders of the Government security during the minority of the nominee;
4. (d)the recognition of right and claim of the nominee or nominees to the Government security held by a sole holder or joint holders, as the case may be, and any payment made by the Government or the Bank to the nominee or nominees shall constitute a full discharge and shall absolve the Government or the Bank of its liability in respect of the said Government security.
(2)Any nomination or appointment made under sub-section (1) shall become void if the nominee predeceases, or where there are two or more nominees, if all the nominees predecease the holder or joint holders of the Government security making the nomination.
(3)Where the amount due for the time being on a Government security is payable to two or more nominees and either or any of them dies, the title to the Government security shall vest in the survivor or survivors of those nominees and the amount for the time being due thereon shall be paid accordingly.
(4)A transfer of a Government security made in accordance with sub-section (2) of section 5 shall automatically cancel the nomination previously made: Provided that where a Government security is in the possession of a person either as a pledge or by way of security for any purpose, such possession shall not have the effect of cancelling the nomination, but the right of the nominee shall be subject to the right of the person so possessing it.
(5)The Government may, on the recommendation of the Bank, by notification in the Official Gazette, extend the facility of nomination to any Government security as may be specified therein.
(6)Nothing contained in sub-section (1) shall affect the right or claim which any person may have against the person whose right and title to a Government security is recognised by the Government or the Bank or to whom the payment of the amount due on the Government security is made by the Government or the Bank under sub-section (1).
(7)No notice of any claim of any person, other than the person or persons in whose name a Government security is held or the nominees thereof, shall be receivable by the Bank or the Government, nor shall the Bank or the Government be bound by any such notice even though expressly given to it: Provided that where any decree, order, certificate or other authority from a court of competent jurisdiction relating to such Government security is produced before the Bank or the Government, the Bank or the Government shall take due note of such decree, order, certificate or other authority.

Summary

Holders of a government security (other than a promissory note or bearer bond) can nominate one or more people to receive the security and payment upon their death.
If multiple nominees are appointed and some die, the surviving nominee or nominees are entitled to receive the title and payment.
If a nominee is a minor (someone under eighteen years old), the holder can appoint a person in whom the security will vest if the holder dies during that nominee's minority.
Making a payment to the nominee completely discharges the Government or the Bank from any further liability regarding that security.
A nomination becomes void if all the nominees die before the security holder or joint holders.
Transferring the security under Section 5(2) cancels the nomination, but pledging the security (holding the security as collateral for a loan) does not cancel it, making the nominee's rights subject to the pledgee's rights.