Joint bank accounts an option for Queer couples in India

Last week, the Ministry of Finance issued a directive that there are no restrictions on queer persons being able to open a joint bank account with their partners. There is also no restriction on them nominating their partners to receive funds from their bank accounts in the event of their deaths. 

In this Weekly, we explore what this means for queer couples and if this creates ,a new right for them?

What does the advisory say?

Dated August 28th, the Department of Financial Services of the Ministry of Finance issued an advisory which said,

“There are no restrictions for persons of the Queer community to open a joint bank account and also to nominate a person in queer relationship as a nominee to receive the balance in the account, in the event of death of the account holder.”

The advisory also mentioned that this was in adherence to the Supreme Court’s order in the case of Supriyo@Supriya Chakraborty and Anr. v. Union of India (2022). 

What was the Supreme Court order in 2023 about?

While hearing a bunch of petitions which sought legal recognition of marriage between same-sex or queer couples through amendments to the Special Marriage Act, 1954, the Supreme Court had recognised the right of the citizens to equal access to a “bouquet of entitlements” that arose from civil unions. 

This refers to certain material rights which  flow from one’s relationship to another through blood or through marriage. These include the right to co-own property or assets, shared benefits of insurance or health policies, right to be each other’s nominees in contingency situations etc. 

The Supreme Court highlighted that the right to privacy guaranteed by the Fundamental Rights enshrined in the Indian Constitution safeguards a queer person’s right to enter into consensual relationships and to cohabit. This also extends to receiving benefits under the law that are otherwise made available to heterosexual couples. The Court also directed the government to form a committee, chaired by the Cabinet Secretary of the Government of India to ensure that queer couples are not discriminated against when it comes to access to these entitlements. 

What does the new advisory mean for the queer couples?

The new advisory reaffirms the right of queer couples to hold a bank account jointly and to nominate one partner to receive funds from the bank account of the other in the event of their death. 

Remember, the right to nomination does not translate into transfer of ownership. While the nominee can access funds  in the event of the primary account holder’s death, this is in the nature of a trust or surety. Banks usually require legal certificates of relationship between the nominee and primary account holder or a will to enable a nominee to access the funds. In that case, queer couples would also be required to execute a will specifying the nomination. 

Moreover, this advisory does not create any new right for queer couples. Indian laws allow a citizen to jointly hold bank accounts with anyone. No biological or marital relationship is necessary for the same. Similarly, a relationship through blood and marriage is not necessary for naming someone as the nominee of one’s bank account.