Banking Law
Parliament passes Banking Laws (Amendment) Bill to improve governance in bks
This story was originally published at 19:03 IST on 26 March 2025
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--Parliament passes Banking Laws (Amendment) Bill, 2024
NEW DELHI – The Parliament on Wednesday passed the Banking Laws (Amendment) Bill, 2024, after the the Rajya Sabha also cleared the legislation, which aims to streamline banking operations by aligning them with contemporary financial practices. The Lok Sabha had passed the Bill on Dec. 3 during the winter session.
"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 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," Minister of Finance Nirmala Sitharaman said in the Statement of Objects and Reasons of the Bill.
The Bill, besides seeking to increase options for nominees per bank account to four from the existing one, amongst others, also proposes changes relating to redefining 'substantial interest' of directors, which could increase to INR 20 million from the current limit of INR 0.5 million, which was fixed almost six decades ago.
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.
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. End
Reported by Shahid K. Abbas
Edited by Tanima Banerjee
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