Wed Dec 04 05:57:00 UTC 2024: ## Lok Sabha Passes Amendments to Banking Laws, Allowing Multiple Nominees for Bank Accounts
**New Delhi, India** – The Lok Sabha (lower house of Parliament) has approved amendments to banking laws that will allow account holders to designate up to four nominees for their bank accounts and safe deposit boxes. The changes, part of the Banking Laws (Amendment) Bill, 2024, aim to simplify inheritance procedures and enhance the overall robustness of the Indian banking system.
Finance Minister Nirmala Sitharaman stated that the amendments will improve customer convenience and investor protection. Currently, only one nominee is permitted; the new law allows for either successive or simultaneous nominations for bank accounts, with successive nominations only permitted for safe deposit boxes. This will ensure smoother transfer of assets after the account holder’s death and prevent deposits from becoming unclaimed.
The bill also incorporates 19 amendments across five existing banking laws. These address regulatory improvements, including streamlined reporting deadlines for banks to the Reserve Bank of India (RBI), aiming for more efficient auditing and compliance. The amendments also increase the threshold for defining “substantial interest” in a bank’s shareholding from ₹5 lakh to ₹2 crore, reflecting current economic realities. Further, the tenure of directors (excluding chairman and whole-time directors) in cooperative banks has been extended from eight to ten years.
Minister Sitharaman highlighted the strength and stability of the Indian banking sector compared to global counterparts, emphasizing the government’s commitment to maintaining a safe and healthy banking system. The amendments also address the transfer of unclaimed dividends and shares to the Investor Education and Protection Fund. The bill now awaits passage in the Rajya Sabha (upper house) before becoming law.
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