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Union Finance Minister Nirmala Sitharaman on Friday (August 09) introduced the Banking Laws (Amendment) Bill, 2024 in the Lok Sabha. The bill provides that every bank account holder can register a maximum of four 'nominees' for an account. Till now there is a rule to mention only one nominee in a bank account. If this bill is passed by the Parliament, now the number of nominees can be four. However, this will be an optional provision. Another major change is mentioned in the proposed bill. Under this, the substantial interest of company directors has been redefined and the existing limit of Rs 5 lakh has been increased to Rs 2 crore, which was fixed almost six decades ago.
Some opposition members in the Lok Sabha opposed the introduction of this bill in the House. Congress's Manish Tiwari said that the states have the right to amend the laws related to cooperative societies and cooperative banks. He also talked about the ambiguity regarding legal rights in this regard. He said, “There is a contradiction in whether the Center can regulate cooperative societies or not.”
NK Premachandran of RSP said that the government is trying to amend four laws simultaneously and this is against the traditions of the House. He said that bills are brought only for legislation related to interrelated subjects. Saugata Roy of Trinamool Congress also objected to amending four laws through one bill.
Rejecting the objections of the opposition members, Finance Minister Nirmala Sitharaman said that the House has already amended the law related to multi-cooperative banks and this has provided relief to small account holders. She said that we could have brought four bills but when there are laws related to the same kind of work, we are bringing an amendment bill.
She said there is a link between the Banking Regulation Act and cooperative banks and any reforms will have to be brought through this route. “There is no attempt to weaken cooperative societies, especially those that do things other than banks,” Sitharaman said. “There should be a set of rules for banks and cooperative societies licensed for banking activities and that is why we have taken this step.” After the minister's reply, the House approved the introduction of the bill by voice vote.
The Bill provides banks with greater freedom in determining the remuneration to be paid to statutory auditors. The Bill also provides for redefining the reporting dates for regulatory compliance for banks to the 15th and last day of every month instead of the second and fourth Fridays.
The Union Cabinet last Friday approved the bill, which 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, 1970, Acquisition and Transfer of Undertakings) Act, 1980. The finance minister announced this in her Budget speech for 2023-24. She said, “Several amendments are proposed in the Banking Regulation Act, the Banking Companies Act and the Reserve Bank of India Act to improve bank governance and enhance investor protection.”
