Nomination for a Bank Deposit is governed by Banking Regulation Act and the provisions relating to Nomination in Banking Regulation Act do not substitute the Succession Act. Therefore, Nomination facility will only ease the formalities of settling the claim and makes the job of a Banker easy.
The Nominee receives the money on behalf of all the claimants. When there are other claimants, he alone cannot appropriate the entire amount of the Deposit for which he is the sole Nominee. Nomination absolves the Bank from any claims from other legal heirs when the claim is settled under nomination, when other claimants did not put forth their claims.
Banks settle the claims quickly where nomination is available. However, other claimants also put forth their claims on the same deposit/s, before the claim is settled under Nomination, Banks will not settle the claim but advise the claimants to settle the dispute.
This aspect was dealt with in detail in this very forum and you can read the view points with the help of following link: