Banking Laws Amendment 2024: The central government has passed the Banking Laws (Amendment) Bill, 2024 in Parliament. This new law allows bank account holders to add four nominees.
Banking Laws Amendment 2024: The central government has passed the Banking Laws (Amendment) Bill, 2024 in Parliament. This new law allows bank account holders to add four nominees. The Rajya Sabha approved it by voice vote, while the Lok Sabha had already passed it in December 2024.
These are the big changes for the customers
Another major change in this bill has been made regarding the definition of “substantial interest”. Earlier, if a person had an investment of Rs 5 lakh in a bank, it was considered a “substantial interest”. Now this limit has been increased to Rs 2 crore. This change was made because this old limit was fixed about 60 years ago.
Strictness on loan recovery and defaulters
Finance Minister Nirmala Sitharaman said during the discussion in the Rajya Sabha that the government is committed to taking strict action against wilful defaulters. She said that in the last five years, the Enforcement Directorate (ED) has investigated more than 112 cases related to bank fraud. She also clarified that “write-off” does not mean loan waiver. Banks will continue to make efforts to recover these amounts.
Historic earnings of banks
He said that public sector banks have earned the highest ever profit of Rs 1.41 lakh crore in the last financial year. He hopes that this profit will increase further in 2025-26.
New facilities to cooperative banks and auditors
Under the bill, the tenure of directors of cooperative banks (except chairman and full-time director) has been increased from 8 years to 10 years. This has brought changes in accordance with the 97th Constitutional Amendment Act of 2011. Now the director of a central cooperative bank will also be allowed to serve on the board of a state cooperative bank.
New rules and more freedom to banks
Banks will now be able to decide the salary of their statutory auditors themselves. Banks will now submit data for reporting on the 15th and last date of the month, which was earlier done on the second and fourth Fridays.
Changes in nomination
Facilities have been provided to add multiple nominees simultaneously for cash and fixed deposits. The same rule will apply in the case of lockers, as is already used in insurance policies and other financial schemes. Nirmala Sitharaman said that this bill will affect five different laws, which makes this change special. To prepare it, 8 teams worked together so that all the necessary amendments could be made.
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