The Lok Sabha passed the Banking Laws (Amendment) Bill, 2024 on December 3, by voice vote. Introduced by Union Finance Minister Nirmala Sitharaman, this legislation aims to strengthen governance in the banking sector while enhancing customer convenience.
Key Provisions of the Bill
- Nomination Flexibility for Account Holders
- Bank account holders can now nominate up to four individuals for their accounts.
- Nominations can be made successively or simultaneously.
- Locker holders are restricted to successive nominations only.
- Changes in Substantial Interest Definition
- The threshold for “substantial interest” in directorships has been raised from ₹5 lakh to ₹2 crore.
- Extended Tenure for Cooperative Bank Directors
- Tenure for directors (excluding chairpersons and whole-time directors) in cooperative banks has increased from 8 to 10 years.
- This aligns with the Constitution (Ninety-Seventh Amendment) Act, 2011.
- Governance and Compliance Improvements
- Directors of Central Cooperative Banks can now serve on the boards of State Cooperative Banks.
- Banks are granted flexibility in determining the remuneration for statutory auditors.
- Reporting dates for regulatory compliance are updated from the second and fourth Fridays to the 15th and last day of every month.
Objectives of the Bill
- Strengthen Banking Governance: Improve decision-making frameworks and oversight in banking operations.
- Enhance Customer Convenience: Simplify nomination processes and protect investor interests.
- Streamline Oversight Processes: Ensure better regulatory compliance through revised timelines.
Multiple-Choice Questions (MCQs):
- What is the maximum number of individuals a bank account holder can nominate under the Banking Laws (Amendment) Bill, 2024?
a) 2
b) 3
c) 4
d) 5
Answer: c) 4 - What is the new threshold for “substantial interest” in directorships as per the Bill?
a) ₹5 lakh
b) ₹50 lakh
c) ₹1 crore
d) ₹2 crore
Answer: d) ₹2 crore - The tenure for directors in cooperative banks has been extended to how many years?
a) 6 years
b) 8 years
c) 10 years
d) 12 years
Answer: c) 10 years - Which amendment of the Constitution aligns with the tenure extension for cooperative bank directors?
a) Ninety-Fifth Amendment
b) Ninety-Seventh Amendment
c) One Hundredth Amendment
d) One Hundred and Second Amendment
Answer: b) Ninety-Seventh Amendment - What change has been made regarding the reporting dates for regulatory compliance?
a) Shifted to the first and third Fridays
b) Shifted to the second and fourth Saturdays
c) Shifted to the 15th and last day of every month
d) Shifted to the first and last working day of the month
Answer: c) Shifted to the 15th and last day of every month