On Tuesday, Finance Minister Nirmala Sitharaman revealed new changes in banking laws designed to make banking better for everyone. These changes will be discussed in the Lok Sabha and include 19 important amendments to various banking laws, including the Reserve Bank of India Act and the Banking Regulation Act.
One major change will allow bank account holders to have up to four nominees, making it easier for families to manage accounts. The bill will also protect investors’ money by sending unclaimed dividends, shares, and bond interest to the Investor Education and Protection Fund (IEPF). This means individuals can get their money back if they have claims.
Sitharaman explained that these changes are necessary as banking has changed over time. The amendments aim to improve how banks are managed and keep customer interests safe.
Key points include:
– Better governance for banks and improved reporting to the Reserve Bank of India.
– More protection for depositors and investors.
– Improved quality of audits for public sector banks.
– Increase in the tenure of cooperative bank directors from 8 to 10 years, in line with new rules.
– Clearer rules about who can be a director in banks, raising the financial limit from Rs 5 lakh to Rs 2 crore, which hasn’t changed in almost 60 years.
– Cooperative banks will have the new rules applying only to their banking activities.
– Directors of Central Cooperative Banks will now be able to serve on the boards of State Cooperative Banks.
– Banks will have more flexibility in deciding how much to pay their auditors.
– Changes will also set new reporting dates for banks, making it easier for them to comply with rules.
These amendments were first mentioned in the 2023-24 Budget speech, showing the government’s commitment to better banking services for everyone.
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