More Stories

Informist, Tuesday, Dec. 3, 2024

 

--Sitharaman: Banks don't come to govt any more to ask for capital
--CONTEXT: Sitharaman replying to Lok Sabha debate on bank law amendment bill
--Lok Sabha passes Banking Laws (Amendment) Bill 2024

 

NEW DELHI – The Lok Sabha on Tuesday passed the Banking Laws (Amendment) Bill, 2024, which aims to streamline banking operations by aligning them with contemporary financial practices. The bill seeks to amend 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.

 

The bill, besides seeking to increase options for nominees per bank account to four, from the existing one, amongst others, also proposes change relating to redefining 'substantial interest' of directors, which could increase to INR 20 million instead of the current limit of INR 0.5 million, which was fixed almost six decades ago.

 

Finance Minister Nirmala Sitharaman had introduced the bill in Parliament in the previous session in August. "As the banking sector has evolved over the years and with a view to improving bank governance and investor's protection, it has become necessary to make certain amendments in the Reserve Bank of India Act, 1934, the Banking Regulation Act, 1949 (the "BR Act"), 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," Sitharaman said in the Statement of Objects and Reasons of the bill.

 

The bill, while seeking to give greater freedom to banks in deciding the remuneration to be paid to statutory auditors, also aims to redefine the reporting dates for banks for regulatory compliance to the 15th and 30th of every month instead of the second and fourth Fridays. 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 had said after introducing the bill.

 

A Central Processing Centre is proposed to be set up for faster response to companies through centralised handling of various forms filed with field offices under the Companies Act. The bill also seeks to amend different banking laws to alter the tenure of directors of cooperative banks and expand provisions for the settlement of unclaimed amounts.

 

"The intention is to keep the banks safe, stable, and healthy," Sitharaman said in Lok Sabha. "Banks don't come to the government to say recapitalise me, because today they are professionally run, their metrics are healthy. They can go to the markets and raise loans, raise bonds, and run their business accordingly."

 

The government had infused over INR 3.10 trillion into public sector banks for five years starting 2016-17 (Apr-Mar), out of which INR 349.97 billion was through budgetary allocation and the rest through recapitalisation bonds.  End

 

Reported by Shahid K. Abbas

Edited by Ashish Shirke

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2024. All rights reserved.