{"id":43854,"date":"2025-03-27T10:45:54","date_gmt":"2025-03-27T05:15:54","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=43854"},"modified":"2025-05-06T06:16:50","modified_gmt":"2025-05-06T00:46:50","slug":"banking-laws-amendment-bill","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/banking-laws-amendment-bill\/","title":{"rendered":"Banking Laws (Amendment) Bill, 2024: Major Changes and Parliamentary Debate"},"content":{"rendered":"<h2>What\u2019s in Today\u2019s Article?<\/h2>\n<ul>\n<li>Banking Laws Latest News<\/li>\n<li>Understanding the Banking Laws (Amendment) Bill, 2024<\/li>\n<li>Key Features of the Bill<\/li>\n<li>News Summary<\/li>\n<li>Conclusion<\/li>\n<li>Banking Laws (Amendment) Bill, 2024 FAQs<\/li>\n<\/ul>\n<h2>Banking Laws Latest News<\/h2>\n<ul>\n<li>Both the Houses of the Parliament have passed the Banking Laws (Amendment) Bill, 2024, which allows bank account holders to have up to four nominees.<\/li>\n<\/ul>\n<h2>Understanding the Banking Laws (Amendment) Bill, 2024<\/h2>\n<ul>\n<li>The <strong>Banking Laws (Amendment) Bill, 2024<\/strong> was introduced in the <strong>Lok Sabha on August 9, 2024<\/strong>, and passed on <strong>December 3, 2024<\/strong>.\u00a0<\/li>\n<li>The Bill amends five major laws governing India\u2019s banking sector:\n<ul>\n<li>Reserve Bank of India Act, 1934<\/li>\n<li>Banking Regulation Act, 1949<\/li>\n<li>State Bank of India Act, 1955<\/li>\n<li>Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Key Features of the Bill<\/h2>\n<ul>\n<li><strong>Four nominees for deposits<\/strong>:\n<ul>\n<li>Deposit holders can now appoint up to four nominees, either successively or simultaneously. Previously, only one nominee was allowed.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Updated definition of \u2018fortnight\u2019<\/strong>:\n<ul>\n<li>For calculating cash reserves, banks will now follow fixed calendar periods\u20141st to 15th or 16th to month-end\u2014instead of the old Saturday-to-Friday format.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Extended director tenure in co-operative banks<\/strong>:\n<ul>\n<li>Directors can now serve for <strong>10 consecutive years<\/strong>, up from the earlier limit of 8 years.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Dual directorship allowed in certain co-operative banks<\/strong>:\n<ul>\n<li>A director of a central co-operative bank can now serve on the board of a state co-operative bank if they are a member.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Increased threshold for \u2018substantial interest\u2019<\/strong>:\n<ul>\n<li>The definition now includes shareholdings worth up to \u20b92 crore, replacing the outdated \u20b95 lakh cap set decades ago.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Unclaimed funds broadened<\/strong>:\n<ul>\n<li>Unclaimed dividends, shares, and bond payments older than seven years will be transferred to the <strong>Investor Education and Protection Fund (IEPF)<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Bank autonomy in auditor pay<\/strong>:\n<ul>\n<li>Banks will now decide the remuneration of their auditors instead of the RBI and Central Government doing so.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>News Summary<\/h2>\n<ul>\n<li>The <strong>Rajya Sabha passed the Bill on March 26, 2025<\/strong>, amid both support and criticism. Over 20 MPs took part in a four-hour discussion, which highlighted different aspects of the banking system\u2019s health and governance.<\/li>\n<li><strong>Government\u2019s Stand:<\/strong>\n<ul>\n<li><strong>Finance Minister Nirmala Sitharaman<\/strong> defended the Bill, saying it brings necessary reforms. She made the following key points:\n<ul>\n<li>Public sector banks posted a record <strong>\u20b91.41 lakh crore profit in FY 2023\u201324<\/strong>.<\/li>\n<li>Non-Performing Assets (NPAs) have significantly reduced.<\/li>\n<li>Over <strong>912 bank fraud cases<\/strong> involving wilful defaulters are under probe by the Enforcement Directorate (ED).<\/li>\n<li>Loan write-offs are accounting practices, not waivers\u2014banks still pursue recovery.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li><strong>Opposition\u2019s Concerns:<\/strong>\n<ul>\n<li><strong>Wilful Defaulters &amp; Write-offs<\/strong>\n<ul>\n<li>The INC highlighted that \u20b987,000 crore owed by 50 wilful defaulters\u2014including names like <strong>Mehul Choksi<\/strong> and <strong>Rishi Agarwal<\/strong>\u2014were written off, while poor and small borrowers face harsh actions.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Need for Deeper Scrutiny<\/strong>\n<ul>\n<li>Opposition criticised the practice of amending five laws at once without detailed review, calling for <strong>a Joint Parliamentary Committee<\/strong> to examine the Bill.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Concerns About NPAs<\/strong>\n<ul>\n<li>Opposition said Indian banks are burdened with \u20b910 lakh crore in NPAs over five years, largely due to a small group of high-profile defaulters.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Issues in Rural and Cooperative Banks<\/strong>\n<ul>\n<li>Opposition raised concerns about the rising financial frauds in cooperative banks (over <strong>4,000 cases in five years<\/strong>) and outdated tech infrastructure.\u00a0<\/li>\n<li>They also questioned the static \u20b92 crore cap and suggested linking it to inflation.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li><strong>Government\u2019s Counterpoints<\/strong>\n<ul>\n<li>The government said the Bill gives new strength to the banking sector and pointed to improvements under the government post-2014, including widespread financial inclusion and direct benefit transfers.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Conclusion<\/h2>\n<ul>\n<li>The Banking Laws (Amendment) Bill, 2024 represents a <strong>major update in India&#8217;s banking regulation<\/strong>, addressing everything from customer convenience to board governance.\u00a0<\/li>\n<li>While the provisions are largely forward-looking, concerns about oversight, transparency, and the handling of large-scale NPAs remain.<\/li>\n<\/ul>\n<h2>Banking Laws (Amendment) Bill, 2024 FAQs<\/h2>\n<p><strong>Q1. <\/strong>What is the Banking Laws (Amendment) Bill, 2024 about?<\/p>\n<p><strong>Ans. <\/strong>It updates five banking laws to improve flexibility, governance, and customer service.<\/p>\n<p><strong>Q2. <\/strong>How many nominees can now be assigned to a bank deposit?<\/p>\n<p><strong>Ans. <\/strong>Up to four nominees can now be appointed for a single account or locker.<\/p>\n<p><strong>Q3. <\/strong>What changes were made to co-operative bank governance?<\/p>\n<p><strong>Ans. <\/strong>Director tenures have been extended to 10 years and dual directorships are now allowed under certain conditions.<\/p>\n<p><strong>Q4. <\/strong>What is the new threshold for \u2018substantial interest\u2019?<\/p>\n<p><strong>Ans. <\/strong>The cap has been raised from \u20b95 lakh to \u20b92 crore.<\/p>\n<p><strong>Q5. <\/strong>What concerns did the Opposition raise?<\/p>\n<p><strong>Ans. <\/strong>They flagged issues like massive NPAs, willful defaulter write-offs, and lack of deeper review of the Bill.<\/p>\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/india\/banking-bill-allowing-4-nominees-gets-rs-nod-needs-deeper-scrutiny-opposition-9908070\/\" target=\"_blank\" rel=\"nofollow noopener\">IE<\/a> | <a href=\"https:\/\/prsindia.org\/billtrack\/the-banking-laws-amendment-bill-2024\" target=\"_blank\" rel=\"nofollow noopener\">PIB<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Banking Laws (Amendment) Bill, 2024 introduces nominee expansion, longer director tenures &#038; new financial thresholds, while Opposition demands stricter NPA scrutiny.<\/p>\n","protected":false},"author":5,"featured_media":43855,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-43854","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/43854","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=43854"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/43854\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/43855"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=43854"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=43854"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=43854"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}