The proposed Banking Laws (Amendment) Bill, placed in the parliament, seeks to improve governance standards, provide consistency in reporting by banks to the RBI, ensure better protection for depositors and investors, improve audit quality in Public Sector Banks
FinTech BizNews Service
Mumbai, August 9, 2024: Union Minister of Finance and Corporate Affairs Nirmala Sitharaman introduced the Banking Laws (Amendment) Bill, 2024 today in the parliament.
Banking Laws (Amendment) Bill, 2024
The proposed Bill, placed in the parliament, seeks to improve governance standards, provide consistency in reporting by banks to the RBI, ensure better protection for depositors and investors, improve audit quality in Public Sector Banks, and provide for an increase in the tenure of the directors (other than chairperson and whole-time director) in cooperative banks.
The salient features of the Bill include:
1. Amendments to sections 45ZA, 45ZC, and 45ZE of the Banking Regulation Act: To allow for up to four nominees. This includes provisions for simultaneous and successive nominations, offering greater flexibility and convenience for depositors and their legal heirs, especially concerning deposits, articles in safe custody, and safety lockers.
2. The Bill seeks to amend section 38A of the State Bank of India Act, 1955, section 10B of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980 : To enable the transfer of unclaimed dividends, shares, and interest or redemption of bonds to the Investor Education and Protection Fund (IEPF), allowing individuals to claim transfers or refunds from the fund, thus safeguarding investors' interests.
3. Amendments to sections 18, 24, 25, and 56 of the Banking Regulation Act and section 42 of RBI Act: It will revise the reporting dates for the submission of statutory reports by banks to the RBI from reporting Friday to the last day of the fortnight, month, or quarter. This change will ensure consistency in reporting.
4. To align with the Constitution (Ninety-Seventh Amendment) Act, 2011, it’s proposed to amend clause (i) of sub-section (2A) of section 10A of the Banking Regulation Act, extending the tenure of directors (excluding the chairman and whole-time directors) in cooperative banks from 8 years to 10 years. 2 5. Amendment in clause (ne) of section 5 of the Banking Regulation Act, 1949: To redefine "substantial interest." The threshold forshareholding of a substantial interest will be increased from Rs 5 lakh to Rs. 2 crores, reflecting the present value, as the same was last fixed in 1968. 6. Amendment in sub-section (3) of section 16 of the Banking Regulation Act: To allow a Director of a Central Cooperative Bank to serve on the board of a State Cooperative Bank.
