By a voice vote on Tuesday, December 3, the Lok Sabha approved the Banking Laws (Amendment) Bill, 2024. The legislation, which is being piloted by Union Finance Minister Nirmala Sitharaman, brings about important changes that are intended to improve customer convenience and banking sector governance.
One of the main features is that bank account holders can designate up to four people for their accounts, either consecutively or simultaneously. However, locker holders will only be able to nominate themselves again.
Additionally, the bill suggests changing the criteria for “substantial interest” in directorships from ₹5 lakh to ₹2 crore. In accordance with the Constitution (Ninety-Seventh Amendment) Act, 2011, the term of directors in cooperative banks will also be extended from eight to ten years, with the exception of chairpersons and full-time directors.
“The proposed amendments will strengthen governance in the banking sector and enhance customer convenience with respect to nomination and protection of investors,” Sitharaman said while moving the bill for consideration and passing.
Additionally, Central Cooperative Bank directors will be allowed to sit on State Cooperative Bank boards. The latitude given to banks in deciding how much to pay statutory auditors is another noteworthy change. To streamline oversight procedures, the second and fourth Fridays will no longer be the reporting dates for regulatory compliance; instead, the 15th and last day of each month will be used.
