Finance Minister Nirmala Sitharaman presented the Banking Laws (Amendment) Bill, 2024, in the Lok Sabha, emphasizing its potential to enhance governance in the banking sector. The bill aims to improve consumer convenience, protect investors, and standardize reporting practices for banks under the Reserve Bank of India (RBI).
Among its provisions, the bill proposes changes to depositor nomination rules, allowing up to four nominees, and includes provisions for simultaneous and successive nominations. This flexibility extends to deposits, safe custody, and lockers. Additionally, it seeks to extend the tenure of directors in cooperative banks from eight to ten years.
The bill also redefines the reporting period for cash reserves under the RBI Act, shifting the definition of a fortnight to align with the calendar month. Furthermore, it revises the definition of substantial interest in a company, increasing the threshold from ₹5 lakh or 10% of paid-up capital to ₹2 crore, with the central government authorized to adjust the amount via notification.
Another significant amendment permits directors of central cooperative banks to serve on state cooperative bank boards, addressing structural requirements in cooperative banking. The bill also facilitates claims on unclaimed funds transferred to the Investor Education and Protection Fund (IEPF).
These changes collectively aim to modernize banking regulations, improve service quality, and ensure stronger protection for depositors and investors.
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