Government introduces bill to amend banking laws, increase nominee limit per account

The government is scheduled to introduce the Banking Laws (Amendment) Bill, 2024 which seeks to increase the option for nominees per bank account to four, from existing one, among others.

Another proposed change relates to redefining 'substantial interest' for directorships, which could increase to ₹2 crore instead of the current limit of ₹5 lakh, which was fixed almost six decades ago.

As per the revised list of business of Lok Sabha, Finance Minister Nirmala Sitharaman is scheduled to introduce the Banking Laws (Amendment) Bill, 2024 later in the day.

Besides, sources said there are some changes with respect to cooperative banks.

In addition, the Bill also seeks to give greater freedom to banks in deciding the remuneration to be paid to statutory auditors.

The Bill also seeks to redefine the reporting dates for banks for regulatory compliance to the 15th and last day of every month instead of the second and fourth Fridays.

The Bill, which was approved by the Union Cabinet last Friday, proposes to amend 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, 1980.

The announcement about this was made by the Finance Minister in her 2023-24 Budget speech.

"To improve bank governance and enhance investors' protection, certain amendments to the Banking Regulation Act, the Banking Companies Act and the Reserve Bank of India Act are proposed," she had said.