look news india
Bank Account New Rules: The Union Cabinet has approved a slew of changes in banking laws, including allowing a maximum of four nominees in every deposit account and introducing “successive and simultaneous” nominations. The aim of making these changes is to address the growing problem of unclaimed deposits and reduce difficulties for customers.
Currently only one nominee is allowed for savings bank and fixed deposits, which is proposed to be increased. As with withdrawals from insurance and HUF accounts, successive and simultaneous nominations will allow joint account holders and heirs to receive funds even after the account holder's death.
The Central Government-run Public Provident Fund may have more nominees. The details of the provisions will be clear only when Finance Minister Nirmala Sitharaman introduces the bill in Parliament. The government and officials are tight-lipped about the scheme.
Nirmala Sitharaman had flagged unclaimed deposits and funds as a matter of concern several months ago and asked banks, mutual funds and other financial services companies to transfer money to the rightful claimants, but despite banks launching a campaign to settle claims, unclaimed deposits exceeded Rs 78,000 crore by the end of March 2024. Apart from this, it is also proposed to amend the law to allow transfer of dividends and bonds to the Investor Education Protection Fund (IEPF) if the money is unclaimed. Right now, only shares of banks are transferred to IEPF.
Further, shareholders with stake up to Rs 2 crore will be considered to have substantial interest, against the current limit of Rs 5 lakh, which was fixed nearly six decades ago.
The bill seeks to redefine the reporting dates for regulatory compliance for banks to the 15th and last of every month instead of the second and fourth Fridays. Also, if the bill is passed, cooperative banks will be able to appoint directors other than the full-time chairman and directors for up to 10 years.