It has been made clear by the Finance Ministry that LGBTQ+ people are free to register joint bank accounts and designate their partners as beneficiaries.
New Delhi: 30 August 2024
In a momentous step towards accessibility for queer individuals, the Finance Ministry confirmed on August 28, 2024 that there are no bans on LGBTQ+ persons for opening joint bank accounts or designating partners as beneficiaries—in accordance with a decision rendered by the Supreme Court on October 17, 2023.
The advisory, which was called for as a result of Supriyo@Supriya Chakraborty & Anr. vs. Union of India, acknowledged that “there are no bans for persons of the queer community to open a joint bank account and also to name a person in a queer relationship as a beneficiary to receive the balance in the account in the event of death of the account holder.”
On August 21, 2024, the Reserve Bank of India (RBI) also confirmed to the commercial banks as a result of the ruling, including that ‘we are committed not to prejudice LGBTIQ persons whether services to LGBTIQ persons are provided together or separately. We would discourage banks from having discriminatory language— words, gender pronouns and their meanings, or by the use of generalizations of hijra [aka transgender persons].
“The RBI’s acknowledgement is not new either. In 2015, the RBI instructed banks to implement a ‘third gender’ receiving option to all of everyone’s forms and applications for their clients, which advanced the use of banking services by transgender persons. In response, many banks began to tailor additional services to the other transgender community.
One prominent example is offered by ESAF Small Finance Bank Ltd., which showed leadership in 2022 by opening a “Rainbow Savings Account” with benefits for debit cards and competitive savings rates and benefits for debit cards, indicating that the financial services sector is progressively more recognizing the LGBTQ+ community.
Later in 2023 the Supreme Court judgment initiated the establishment of a six member committee by the government, headed by the Cabinet Secretary, to work on problems of LGBTQ+ belonging to or, fulfilling the possibility of, treatment less equal and less favorable, while providing recommendation for equal use of specific services, and making recommendation again’s discrimination, violence and harassment.
The recent clarification by the Finance Ministry reaffirming that banks, or financial institution, may open accounts that are based on the nature of the business transacting, along with the steps taken by the RBI also highlights the role in furthering financial inclusivity for the LGBTQ+ community in India.