Govt to implement some provisions of Banking Laws (Amendment) Act, 2025 Fri
This story was originally published at 16:20 IST on 30 July 2025
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NEW DELHI – The government will enforce some provisions of the Banking Laws (Amendment) Act 2025, passed by Parliament in March, on Friday, the finance ministry said in a notification. Amongst the provisions, the amendment to increase the limit of substantial interest of bank's directors to INR 20 million from INR 500,000 will be effective Friday. Substantial interest in an organisation pertains to the holding of interest by an individual or spouse or a minor child, whether singly or taken together in the shares.
From Friday, banks will also have to transfer the interest on dividends left unclaimed for seven years to the Investor Education and Protection Fund. Earlier, banks deposited only the unclaimed dividends, sans the interest, in the Investor Education and Protection Fund.
The amendments to the Banking Law Bill related to management of co-operative banks will also come into effect. Under the amended law, the government has extended the term of directors at co-operative banks to 10 years from eight years. The Banking Act 2025 also allows a director of a central co-operative bank to be elected to the board of a state co-operative bank.
Banks will be allowed to decide the remuneration of statutory auditors from Friday. Previously, the Reserve Bank of India, in consultation with the central government, fixed the remuneration of the statutory auditors.
Other key provisions of the Banking Law (Amendment) Act 2025 — that allows naming four nominees for bank accounts from a single nominee system previously, and changes submission date of banks' statutory report to the RBI on 15th and 30th of the month from second and fourth Friday — are yet to be implemented. The President of India Droupadi Murmu had approved the Act in April. End
Reported by Krity Ambey
Edited by Vandana Hingorani
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