On December 3, the Lok Sabha passed the Banking Laws (Amendment) Bill, 2024 through a voice vote. The bill, introduced by Union Finance Minister Nirmala Sitharaman, brings significant changes aimed at improving bank governance and enhancing customer convenience.
Some key changes include:
- Bank account holders will now be allowed to nominate up to four individuals for their accounts, with the option for simultaneous or successive nominations. However, locker holders can only make successive nominations.
- The bill also updates the definition of “substantial interest” for directorships, raising the threshold from ₹5 lakh to ₹2 crore.
- The tenure for directors in cooperative banks (excluding chairpersons and whole-time directors) will be extended from 8 to 10 years, in line with the Constitution (Ninety-Seventh Amendment) Act, 2011.
- Directors of Central Cooperative Banks will now be allowed to serve on the boards of State Cooperative Banks.
- The bill also gives banks more flexibility in deciding remuneration for statutory auditors.
- Lastly, the reporting dates for regulatory compliance will change from the second and fourth Fridays to the 15th and last day of each month, making the oversight process more streamlined.
Sitharaman highlighted that these amendments will strengthen banking sector governance and improve customer convenience, especially around nominations and investor protection.
