-By ArdorComm News Network
December 5, 2024
The Banking Laws (Amendment) Bill, 2024, presented by Finance Minister Nirmala Sitharaman in the Lok Sabha, introduces significant reforms to enhance governance in the banking sector and improve customer convenience.
The bill proposes 19 amendments across key legislations, including the Reserve Bank of India Act, 1934; the Banking Regulation Act, 1949; and acts governing the State Bank of India and public sector banks. Key changes aim to:
- Strengthen Governance: Improve audit quality, reporting consistency, and depositor protection.
- Enhance Customer Convenience: Allow account holders up to four nominees and redefine ‘substantial interest’ limits for directorships, raising the threshold from ₹5 lakh to ₹2 crore.
- Safeguard Investor Interests: Transfer unclaimed dividends, shares, and bond-related interests to the Investor Education and Protection Fund (IEPF) with provisions for claims or refunds.
Sitharaman highlighted the evolving banking sector’s need for robust reforms. “These amendments will improve governance, safeguard investors, and provide enhanced customer convenience,” she said.
For cooperative banks, the amendments increase director tenure from 8 to 10 years, align with constitutional reforms, and grant Central Cooperative Bank directors eligibility to serve on State Cooperative Bank boards.
Additional proposals include:
- Auditor Remuneration Flexibility: Empowering banks to decide statutory auditor payments.
- Regulatory Compliance Simplification: Redefining reporting dates to the 15th and last day of every month, replacing the current second and fourth Fridays.
These reforms are poised to ensure better protection for depositors, streamline regulatory frameworks, and improve operational efficiency across India’s banking landscape.
Source: Indian Express
Photo Credit: Indian Express