 "Banking Laws Bill, 2024, extends tenure of co-op bank directors to 10 years | Finance News")
The Bill also allows the director of a central co-operative bank to serve on the board of a state co-operative bank. Representative Picture
The Banking Laws (Amendment) Bill, 2024, which Union Finance Minister Nirmala Sitharaman tabled on Friday in Parliament, proposes the extension of the tenure of directors (excluding the chairman and whole-time directors) in cooperative banks from eight to ten years.
The Bill also amends clause (ne) of section 5 of the Banking Regulation Act, 1949, to redefine “substantial interest.” This will increase the threshold for shareholding of substantial interest from Rs 5 lakh to Rs 2 crore, reflecting the present value, as the previous threshold was set in 1968.
Additionally, the Bill proposes the transfer of unclaimed dividends, shares, and interest or redemption of bonds to the Investor Education and Protection Fund (IEPF). Individuals will be able to claim transfers or refunds from the fund, ensuring the protection of investors’ interests.
On April 7, 2024, Business Standard reported that the finance ministry is considering amending the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, which governs public sector banks (PSBs), to make provisions for allowing PSBs to transfer shares to the IEPF when dividends of such shares remain unclaimed by investors for seven consecutive years.
The Bill also allows the director of a central co-operative bank to serve on the board of a state co-operative bank.
Another significant change outlined in the Bill is the revision of reporting dates for the submission of statutory reports by banks to the Reserve Bank of India (RBI). The Bill proposes shifting the reporting date from the current ‘reporting Friday’ to the last day of the fortnight, month, or quarter. This amendment aims to ensure consistency in reporting practices.
The Bill also amends sections 45ZA, 45ZC, and 45ZE of the Banking Regulation Act to allow for up to four nominees.
“This includes provisions for simultaneous and successive nominations, offering greater flexibility and convenience for depositors and their legal heirs, especially concerning deposits, articles in safe custody, and safety lockers,” the proposed Bill stated.
The Banking Laws (Amendment) Bill, 2024, aims to update and refine banking regulations to better align with current financial practices while also improving protections for both depositors and investors.
First Published: Aug 09 2024 | 2:12 PM IST
