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Banking Reform
The Lok Sabha on Tuesday passed the Banking Laws (Amendment) Bill, 2024, which allows bank account holders to have up to four nominees in their accounts. Another proposed change relates to redefining 'substantial interest' for directorships, which could increase to Rs 2 crore instead of the current limit of Rs 5 lakh, which was fixed almost six decades ago. The Bill piloted by Finance Minister Nirmala Sitharaman was approved by a voice vote. Replying to the debate on the Bill, Sitharaman said depositors will have the option of successive or simultaneous nomination facility, while locker holders will have only successive nomination. She also said that since 2014, the Government and the RBI have been extremely cautious, so that banks remain stable. "The intention is to keep our banks safe, stable, healthy, and after 10 years you are seeing the outcome," Sitharaman said. The bill proposes to increase the tenure of directors (excluding the chairman and whole-time director) in coopera
The government is likely to introduce amendments to Banking Regulation Act 1949 and other laws to push banking sector reforms during the upcoming Budget session. Apart from this, amendments in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 are needed for privatisation of public sector banks, sources said. These Acts led to the nationalisation of banks in two phases and provisions of these laws have to be changed for the privatisation of banks, they said. Amendments, if approved by Parliament, would help bring down government holding in state-owned banks below 51 per cent, improve bank governance and enhance investors' protection, sources said. Parliament session beginning on July 22 would witness the Budget presentation on July 23 and conclude with the passage of the Finance Bill on August 12. It is to be noted that the government had listed amendment to these laws to be tak
Apropos the editorial, "Tip of the iceberg" (February 16), surging bad assets of banks should not be seen in isolation: the situation has arisen from the contribution of several adversaries in the domestic economy and foreign ones as well.Successive governments at the Centre since banks were nationalised are chiefly responsible for the present woes of the banking sector. Taxpayers and investors are bearing the brunt of the wrong policies of governments. Despite the banking sector's substantial role in the country's growth, it has been kept out of timely reforms.The government should try to execute sector-specific reforms to ensure that funds due to banks are released on time. The government and the banking regulator should enforce stringent measures to recover dues from wilful defaulters. These defaulters are enjoying a luxurious life at the cost of the exchequer. Despite the directives issued from time to time by the banking regulator, unscrupulous borrowers are taking advantage of lo