Lok Sabha passes Banking Laws Amendment Bill 2024

The Lok Sabha has passed the Banking Laws (Amendment) Bill, 2024. The Bill seeks to amend the Reserve Bank of India Act, 1934, the Banking Regulation Act, 1949, the State Bank of India Act, 1955, the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980. The Bill also seeks to increase the option for nominees per bank account to four, from the existing one. The bill also proposes to redefine substantial interest for directorships, which could increase to two crore rupees instead of the current limit of five lakh rupees. Moving the bill, Union Finance Minister Nirmala Sitharaman said that the proposed amendment will strengthen the governance in the banking sector apart from enhancing customer convenience.The Bill piloted by Finance Minister Nirmala Sitharaman was approved by a voice vote.
The bill proposes to increase the tenure of directors (excluding the chairman and whole-time director) in cooperative banks from 8 years to 10 years, so as to align with the Constitution (Ninety-Seventh Amendment) Act, 2011.Once passed, the bill would allow a director of a Central Cooperative Bank to serve on the board of a State Cooperative Bank. The bill also seeks to give greater freedom to banks in deciding the remuneration to be paid to statutory auditors.
Opposition members fiercely criticised the bill with TMC MP Kalyan Banerjee describing it as a "donkey passage towards privatisation of the Indian banking sector". While the bill ostensibly seeks to improve bank guarantees and investor protection, its real intent is to reduce the government's minimum holding in public sector banks from 51 to 26 per cent, he argued.
Congress Member Karti Chidambaram also raised the issue of rising cyber frauds in the country and wanted to know what the government was doing to stop that.Chidambaram also said that the tyranny of KYC should be stopped as multiple calls are being received by people from their banks in a year for updating the KYC details even though nothing has changed.

(Business Correspondent)