BANKING LAWS AMENDING BILL (2024) : ECONOMY
NEWS : Budget 2023-24 Announcement:
Emphasized the need for banking sector reforms to enhance governance and
safeguard investor interests.Government Vision: Aligns with broader
goals, including the privatisation of public sector banks.
WHAT’S IN THE NEWS ?
Rationale
for Introducing the Bill
Key
Amendments in the Banking Laws (Amendment) Bill, 2024
- Nominees per Bank Account:
- Current:
One nominee per account.
- Proposed:
Increase to four nominees per account, offering greater flexibility to
account holders.
- Redefining
‘Substantial Interest’:
- Current Threshold:
Rs 5 lakh.
- Proposed Threshold:
Rs 2 crore, updating a limit that has been unchanged for nearly six
decades.
- Statutory
Auditor Pay:
- Proposal: Provides
banks with greater flexibility in determining the pay for statutory
auditors to ensure robust auditing practices.
- Tenure
of Directors in Co-operative Banks:
- Current Rule:
Maximum of 8 consecutive years.
- Proposed Change:
Increase to 10 years.
- Reporting
Dates:
- Current:
Second and fourth Fridays of each month.
- Proposed:
15th and last day of each month for regulatory compliance reporting.
Broader
Reforms
- Impact: Aims to improve bank
governance, investor protection, and banking practices.
- Legislation
Affected: Includes amendments to the RBI Act, 1934,
Banking Regulation Act, 1949, State Bank of India Act, 1955, and the
Banking Companies Acts of 1970 and 1980.
Conclusion
- Significance: The Bill is a major step
towards modernising India's banking sector by enhancing governance,
increasing flexibility, and strengthening investor protection.
Source : https://www.thehindu.com/news/national/government-to-introduce-banking-laws-amendment-bill-in-lok-sabha-seeks-to-raise-nominees-per-account-to-four/article68504569.ece