A new bill, the Banking Laws (Amendment) Bill, 2024, is set to be introduced by the government. This bill aims to increase the number of nominees per bank account to four, up from the current limit of one, among other changes.
Another proposed amendment involves redefining 'substantial interest' for directorships, potentially raising the threshold to Rs 2 crore from the current level of Rs 5 lakh, which has remained unchanged for nearly six decades.
According to the updated Lok Sabha business agenda, Finance Minister Nirmala Sitharaman is expected to present the Banking Laws (Amendment) Bill, 2024 later today.
Additionally, sources have indicated that there are some modifications concerning cooperative banks.
Furthermore, the bill aims to grant banks more autonomy in determining the remuneration for statutory auditors.
The proposed legislation also aims to change the deadlines for banks to report regulatory compliance to the 15th and last day of each month, instead of the second and fourth Fridays.
The legislation, which received approval from the Union Cabinet last week, suggests revising 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 Finance Minister made the announcement about this 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.
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