Nirmala Sitharaman introduces Banking Legal guidelines (Modification) Invoice in Lok Sabha

Finance Minister Nirmala Sitharaman on Friday launched within the Lok Sabha the Banking Legal guidelines (Modification) Invoice, 2024, which seeks to provide prospects an possibility to extend the variety of nominees per checking account to 4, from current one, amongst others.

One other proposed change pertains to redefining ‘substantial curiosity’ for directorships, which might enhance to ₹2 crore as an alternative of the present restrict of ₹5 lakh, which was fastened virtually six many years in the past.

Congress member Manish Tewari opposed the introduction of the Invoice saying the facility to legislate with regard to cooperative societies vests with state governments.

• Additionally learn: Govt set to usher in modifications in banking legal guidelines

Sitharaman mentioned the banking regulation act and the cooperative banks do have a relationship and therefore any modification needs to be taken by way of this route.

“There is no such thing as a try and undermine the cooperatives, significantly cooperatives coping with the whole lot apart from banks. Banks, cooperatives with a licence for banking should have a rule and subsequently we’ve got proven this,” Sitharaman mentioned whereas introducing the Invoice.

The Invoice additionally seeks to provide larger freedom to banks in deciding the remuneration to be paid to statutory auditors.

It additionally seeks to redefine the reporting dates for banks for regulatory compliance to the fifteenth and final day of each month as an alternative of the second and fourth Fridays.

The Invoice, which was permitted by the Union Cupboard final week, proposes to amend the Reserve Financial institution of India Act, 1934, the Banking Regulation Act, 1949, the State Financial institution of India Act, 1955, the Banking Corporations (Acquisition and Switch of Undertakings) Act, 1970 and the Banking Corporations (Acquisition and Switch of Undertakings) Act, 1980.

The announcement about amendments to the Banking Regulation Act was made by the Finance Minister in her 2023-24 Price range speech.

“To enhance financial institution governance and improve buyers’ safety, sure amendments to the Banking Regulation Act, the Banking Corporations Act and the Reserve Financial institution of India Act are proposed,” she had mentioned.