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Informist, Friday, Aug 9, 2024

--Sitharaman tables Banking Laws Amendment Bill, 2024, in Lok Sabha 

NEW DELHI - Finance Minister Niramala Sitharaman tabled the Banking Laws (Amendment) Bill 2024 in Lok Sabha today. The amendments proposed in the bill aim to tweak the banking regulations, including redefining substantial interest for directors, increasing the number of nominees for bank deposits and changes in compliance reporting dates. 

One of the amendments proposes to change the last date for submission of the statutory report by the banks to the Reserve Bank of India, to 15th and 30th of the month from the current second and fourth Friday. "What's the rationale behind it? The current reporting Friday sytem has several limitations that impact the accuracy and effectiveness of the reporting of data," Sitharaman said.

"These limitations are incomplete coverage of monthly data, seasonal fluctuations in banking activity which lead to inconsistent reporting, and the need for adjustment every 11th year which introduces complications," Sitharaman said in the Lok Sabha while introducing the bill. "That is why, in order to address the issue, it is proposed to amend the legislation."

After the amendment, the statutory reports for the 15th would be submitted on the 20th of the same month, and reports for the last day would be submitted by the 5th of the following month, Sitharaman said.

Another amendment proposes to raise the number of nominees to claim fixed deposit in case of the account holder's death to four from the current one. This is aimed at reducing unclaimed deposits in banks.

The bill also proposes to increase the 'substantial interest' for directors. As per the Banking Regulation Act, the holding of a beneficial interest by an individual or his spouse or minor child, whether singly or taken together in the shares thereof, the amount paid-up on which exceeds 500,000 rupees or 10% of the paid-up capital of the company, whichever is less. The government aims to increase the limit of substantial interest of directors to 20 mln rupees or 10% of paid-up capital.

Through the amendment, the government also aims to increase the limit of substantial interest of directors to 20 mln rupees from 500,000 rupees or 10% of the paid-up capital, whichever is lower. Substantial interest in an organisation pertains to holding of interest by an individual or spouse or a minor child, whether singly or taken together in the shares.

The current Parliament session is set to end on Monday. If the bill is not passed in this session, it will likely be taken up for discussion in the Winter Session of Parliament.  End

Reported by Krity Ambey

Edited by Vandana Hingorani

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