Finance Minister Nirmala Sitharaman on Friday tabled the Banking Laws (Amendment) Bill, 2024 in the Lok Sabha.
The proposed amendments will affect the Reserve Bank of India Act, the Banking Regulation Act, and the State Bank of India Act, among others.
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The Bill highlights key changes in the banking law, one of which is to increase the number of nominees allowed per bank account from the current limit of one to four. This aims to offer greater flexibility and choice to account holders.
It further proposes to redefine the concept of ‘substantial interest’ for bank directorships, raising the threshold from the existing Rs 5 lakh to Rs 2 crore.
This reflects an update to a limit that has been in place for nearly 60 years.
The Bill further aims to give banks more flexibility in determining the pay for statutory auditors. It allows for greater freedom in financial management.
Furthermore, it aims to adjust the reporting dates for regulatory compliance, proposing a shift from the current schedule of the second and fourth Fridays of each month to the 15th and last day of every month.
The Bill also proposes the transfer of unclaimed dividends, shares, and interest or redemption of bonds to the Investor Education and Protection Fund (IEPF).
With this, the individuals would then be able to claim transfers or refunds from the fund, ensuring the protection of investors’ interests.
The Bill has also allowed the director of a central cooperative bank to serve on the board of a State Cooperative Bank.
Notably, the introduction of this Bill follows the Finance Minister’s announcement during the 2023-24 Budget speech, where she emphasized the need for reforms in the banking sector to strengthen governance and safeguard the interests of investors.
