New Delhi: On Tuesday, the Lok Sabha approved the Banking Laws (Amendment) Bill, 2024, which includes pivotal changes aimed at enhancing governance within the banking sector and improving provisions for bank account holders. The amendments allow depositors to nominate up to four individuals for their bank accounts, offering flexibility with either simultaneous or successive nominations. For locker holders, the provision remains restricted to successive nominations only.
One of the key provisions in the bill revises the definition of “substantial interest” for individuals seeking directorships in cooperative banks, increasing the threshold from Rs 5 lakh to Rs 2 crore, a change that has been long overdue since the limit was last adjusted almost 60 years ago. In addition, the bill aligns cooperative bank director tenures with the Constitution’s Ninety-Seventh Amendment, extending the term from 8 to 10 years. It also offers more autonomy to banks in determining the remuneration of statutory auditors and revises regulatory compliance reporting schedules.
However, the bill has faced strong opposition, with critics alleging that it is a step toward the privatization of public sector banks. Opposition MPs like TMC’s Kalyan Banerjee voiced concerns that the legislation would reduce the government’s stake in public sector banks and raise cybersecurity issues. Congress’s Karti Chidambaram criticized the frequent KYC updates, calling for simpler procedures. Despite opposition, BJP MP Konda Vishweshwar Reddy defended the bill, emphasizing its potential for better governance and urging bipartisan support.
