Banking Laws (Amendment) Bill, 2024: Passed
The Lok Sabha recently passed the Banking Laws (Amendment) Bill, 2024 by a voice vote.
- It introduces significant changes aimed at improving governance in the banking sector and enhancing customer convenience.
- The bill seeks to amend five acts: the Reserve Bank of India Act, 1934; the Banking Regulation Act, 1949; the State Bank of India Act, 1955; the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970; and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980.
- Highlights of the Bill:
- Key provisions include allowing bank account holders to nominate up to four individuals for their accounts, with an option for successive or simultaneous nominations.
- Locker holders, however, will be restricted to successive nominations.
- The bill also proposes a revision to the definition of “substantial interest” for directorships, raising the threshold from ₹5 lakh to ₹2 crore.
- Additionally, the tenure of directors (excluding chairpersons and whole-time directors) in cooperative banks will increase from 8 to 10 years, aligning with the Constitution (Ninety-Seventh Amendment) Act, 2011.
- It would allow a director of a Central Cooperative Bank to serve on the board of a State Cooperative Bank.
- The Bill also seeks to give greater freedom to banks in deciding the remuneration to be paid to statutory auditors.
- It also seeks to redefine the reporting dates for banks for regulatory compliance to the 15th and last day of every month instead of the second and fourth Fridays.
- The bill also seeks to transfer unclaimed dividends, shares, and interest or redemption of bonds to the Investor Education and Protection Fund (IEPF), allowing individuals to claim transfers or refunds from the fund, thus safeguarding investors’ interests.
