New Delhi: The Lok Sabha on Tuesday passed the Banking Laws (Amendment) Bill, 2024, which permits bank account holders to appoint up to four nominees for their accounts.
The bill also proposes a change in the definition of ‘substantial interest’ for directorships, potentially raising the threshold to Rs 2 crore from the current Rs 5 lakh, a figure set nearly sixty years ago.
Finance Minister Nirmala Sitharaman, who introduced the bill, saw it pass through a voice vote.
In her response to the debate on the bill, Sitharaman mentioned that depositors would be able to choose between successive or simultaneous nomination facilities, while locker holders would be limited to successive nominations only.
Furthermore, she highlighted that since 2014, the government and the RBI have exercised extreme caution to ensure the stability of banks.
“Our aim is to maintain the safety, stability, and health of our banks, and the positive results are evident after a decade,” stated Sitharaman.
The proposed bill aims to extend the tenure of cooperative bank directors (excluding the chairman and whole-time director) from eight to ten years, aligning with the Constitution (Ninety-Seventh Amendment) Act, 2011.
Upon enactment, a director from a Central Cooperative Bank would be eligible to serve on the board of a State Cooperative Bank.
Additionally, the bill intends to grant banks more autonomy in determining the remuneration for statutory auditors.
It further proposes a change in the regulatory compliance reporting dates for banks to the 15th and the last day of each month, replacing the current requirement of the second and fourth Fridays.
“The suggested amendments are designed to reinforce governance within the banking sector and to improve customer service regarding the nomination and protection of investors,” Sitharaman stated during the introduction and discussion of the bill.
