The Banking Laws (Amendment) Act, 2025:
The Banking Laws (Amendment) Act, 2025 will come into effect from 1st August 2025, introducing reforms to bank governance, audit transparency, depositor protection, and cooperative bank regulation.
The Banking Laws (Amendment) Act, 2025:
- A comprehensive reform law notified by the Ministry of Finance, the Act amends 5 key legislations governing the Indian banking sector to improve governance, transparency, and depositor safety.
- The limit for ‘substantial interest’ in banks is revised from ₹5 lakh to ₹2 crore.
This modernizes outdated thresholds (unchanged since 1968) to reflect inflation and sectoral growth. - Tenure raised from 8 to 10 years (excluding chairperson & full-time directors), in sync with the 97th Constitutional Amendment
- PSBs can now transfer unclaimed shares, interests, and bond redemptions to IEPF.
This aligns PSBs with norms under the Companies Act, ensuring efficient fund recycling. - PSBs are empowered to determine remuneration for statutory auditors, promoting better audit quality and enabling engagement of top-tier professionals.
- Reporting timelines to RBI are revised from “every Friday” to end-of-fortnight/month/quarter, easing operational burden and improving data relevance.
