Parliament passes Banking Laws (Amendment) Bill 2024

Parliament has passed the Banking Laws (Amendment) Bill 2024, with the Rajya Sabha approving it Wednesday, following its passage in the Lok Sabha in December 2024. The bill introduces significant changes to banking regulations by amending the Reserve Bank of India Act 1934, the Banking Regulation Act 1949, the State Bank of India Act 1955, and other banking laws.

One of the key provisions of the bill is the increase in the number of nominees per bank account from one to four, offering more flexibility to account holders. It also redefines substantial interest for directorships, raising the threshold from Rs 5 lakh to Rs 2 crore, and grants banks the authority to determine auditor remuneration. The amendments aim to enhance governance standards, ensure consistency in reporting to the RBI, improve depositor protection, and strengthen audit quality in public sector banks.

During the parliamentary debate, Union Finance Minister Nirmala Sitharaman emphasized the governments commitment to banking sector reforms, highlighting a sharp reduction in non-performing assets (NPAs). She reaffirmed that stringent action is being taken against willful defaulters, revealing that the Directorate of Enforcement has handled 912 cases of bank fraud in the past five years, including those involving deliberate defaults.

The bill is expected to bolster transparency, accountability, and efficiency in the Indian banking sector, ensuring stronger financial oversight and protection for depositors and investors.

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