Wed Dec 04 08:29:00 UTC 2024: ## Parliament Passes Banking Laws (Amendment) Bill, Allowing Four Nominees per Account
**New Delhi:** The Lok Sabha on Tuesday passed the Banking Laws (Amendment) Bill, 2024, allowing bank account holders to add up to four nominees. Finance Minister Nirmala Sitharaman, who introduced the bill, stated it would strengthen the banking sector and safeguard the interests of customers and investors.
The bill proposes 19 amendments to the Reserve Bank of India Act, 1934; the Banking Regulation Act, 1949; the State Bank of India Act, 1955; and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980. These amendments aim to improve governance standards in banking and standardize information provided to the RBI.
Key changes include increasing the number of nominees per bank account from one to four, benefiting depositors and locker holders. The bill also facilitates the transfer of unclaimed dividends, share and bond interest, or redemption proceeds to the Investor Education and Protection Fund, easing claim processes for investors. The definition of “substantial interest” for individuals will be revised, increasing the limit from ₹5 lakh (set in 1968) to ₹2 crore. Reporting deadlines for statutory submissions to the RBI by banks will also be changed to the end of fortnights, months, or quarters. The tenure of directors (excluding the chairperson and full-time directors) in cooperative banks will be extended from eight to ten years. Further, the bill grants banks more autonomy in determining the remuneration of statutory auditors.
The passage of the bill wasn’t without controversy. A BJP member’s remarks about former Prime Minister Indira Gandhi sparked a heated exchange between the ruling and opposition benches. Additionally, the Finance Minister responded to opposition members questioning her Hindi speaking skills. The bill, first announced in the 2023-24 budget speech, is expected to significantly impact banking practices in India.
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