NEW DELHI, Dec 3: The Lok Sabha approved the Banking Laws (Amendment) Bill, 2024, on Tuesday, permitting bank account holders to designate up to four nominees for their accounts.
Additionally, the bill proposes to revise the definition of ‘substantial interest’ for directorships, raising the limit to Rs 2 crore from the previous ceiling of Rs 5 lakh, which has been in place for nearly sixty years.
Finance Minister Nirmala Sitharaman piloted the bill, which was passed through a voice vote.
During the debate, Sitharaman mentioned that depositors would be given the choice of either successive or simultaneous nomination, while those with lockers would only have the option for successive nomination.
She highlighted that since 2014, both the Government and the RBI have exercised caution to ensure the stability of banks.
“Our goal is to ensure that our banks remain safe, stable, and healthy, and after a decade, the benefits are evident,” Sitharaman remarked.
The proposed legislation aims to extend the tenure of directors (excluding the chairman and whole-time director) at cooperative banks from 8 years to 10 years, aligning with the provisions of the Constitution (Ninety-Seventh Amendment) Act, 2011.
If enacted, the bill would enable a director of a Central Cooperative Bank to participate on the board of a State Cooperative Bank.
Moreover, the bill seeks to grant banks more autonomy in deciding the remuneration for statutory auditors.
It also aims to alter the reporting dates for regulatory compliance, moving them to the 15th and the last day of each month, instead of the previous schedule of the second and fourth Fridays.
“These amendments are intended to enhance governance in the banking sector and improve customer convenience regarding nominations and investor protection,” Sitharaman stated while presenting the bill for consideration and passing. (PTI)
