On Tuesday, the Lok Sabha approved the Banking Laws (Amendment) Bill, 2024, introducing significant updates to the banking sector. The bill aims to modernize the banking framework and address outdated provisions.
Key Changes Introduced
- Up to Four Nominees for Bank Accounts
Bank account holders can now designate up to four nominees for their accounts.- Earlier, the number of nominees was limited.
- This change provides greater flexibility and simplifies the transfer of funds in unforeseen circumstances.
- Redefinition of ‘Substantial Interest’ for Directorships
The threshold for determining “substantial interest” for eligibility as a bank director has been raised.- The financial holding requirement has been increased to ₹2 crore, up from the previous limit of ₹5 lakh, which was set almost six decades ago.
- This adjustment reflects the current economic realities and aims to enhance the quality and accountability of bank directors.
Significance of the Amendments
- For Account Holders: The provision for more nominees ensures smoother and dispute-free inheritance of funds.
- For Banks: The updated financial criteria for directorship aim to improve governance by attracting more qualified and financially capable individuals.
The Banking Laws (Amendment) Bill, 2024, marks a progressive step in aligning India’s banking regulations with modern needs, benefiting both customers and the financial sector.
