NEW DELHI: Union Finance Minister Nirmala Sitharaman introduced the Banking Laws (Amendment) Bill, 2024, to the Lok Sabha, aiming to implement notable updates to key banking regulations.

This proposed Bill seeks to amend several important laws, including the Reserve Bank of India Act, the Banking Regulation Act, and the State Bank of India Act. One major change is the increase in the number of nominees permitted per bank account, from one to four. This adjustment is designed to provide account holders with greater flexibility and options.

Another significant proposal in the Bill is the revision of the 'substantial interest' criteria for bank directorships. The threshold for what constitutes substantial interest will rise from Rs 5 lakh to Rs 2 crore, updating a limit that has remained unchanged for almost 60 years.

The Bill also aims to grant banks more discretion in setting the remuneration for statutory auditors, thereby allowing for improved financial management. Additionally, it proposes new reporting dates for regulatory compliance, shifting from the current schedule of the second and fourth Fridays of each month to the 15th and the last day of every month.

These proposed amendments, which received Union Cabinet approval last week, are part of a larger initiative to enhance bank governance and protect investors. The Bill also includes updates to the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980.

The introduction of this Bill follows Finance Minister Nirmala Sitharaman's announcement in the 2023-24 Budget speech, where she highlighted the necessity for reforms to bolster banking sector governance and safeguard investor interests.

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