Banking Laws (Amendment) Bill: Lok Sabha on Tuesday approved the Banking Laws (Amendment) Bill, 2024. With this amendment, bank account holders will now be able to have a maximum of four nominees in their account. Through this bill, a total of 19 amendments were proposed in five banking laws. Through which the interests of customers and investors will be protected along with strengthening the management system in the banking system.
Benefit of change in nominee
Union Finance Minister Nirmala Sitharaman said banks will have to ensure reduction in deposits in the unclaimed category instead of increasing the number of enrolled individuals. Under this amendment, a deadline has also been given to submit the statutory report to RBI. This will make the banking system simple, transparent and fast.
Presently provision for single nominee
According to the existing rules, only a nominee can repay the depositor’s money. In which the money is kept safe in custody or locker. Now with this amendment four nominated persons will get the benefit of this facility.
Amendment in these five acts
The Bill makes a total of 19 amendments to 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 1970. Act 1980.
Other important improvements
Another amendment in the Banking Laws (Amendment) Bill relates to redefining ‘substantial interest’ for directors. In which about 6 decades ago Rs. The present limit of Rs 5 lakh has been increased to Rs. Rs 2 crore has been recommended. The Banking Laws (Amendment) Bill has changed the word ‘fortnight’ to ‘cash reserve’. Apart from this, a provision has been made to give more freedom to banks in deciding the remuneration to be paid to auditors.
Tenure of Chairman and Directors extended
The Finance Minister had announced this bill in the budget speech of 2023-24. In this bill, there is a provision to increase the tenure of directors other than the chairman and whole-time directors in co-operative banks from 8 years to 10 years. Sitharaman said that through this amendment, depositors will be given the option of sequential or simultaneous nomination while locker holders will be given the option of only sequential nomination. Since 2014, the NDA government and the RBI have been careful to keep banks stable. Our objective is to keep our banks safe, stable and healthy. After 10 years you are seeing the results.
Banks’ profitability increased
Apart from this, he said, Indian banks have done excellent work in recent years. Net profit of banks will increase to Rs.2023-24. 1.41 lakh crore in the first six months of 2024-25 and Rs. 85520 crores has been recorded. Which is the highest till date. In short, government banks have become profitable. State Finance Minister Pankaj Chaudhary said that the central government is not thinking about disinvestment of public sector banks. However, 10 banks were disinvested in 2019. This merger played an important role in facilitating geographical diversification, entering new markets and retaining the customer base.
