New Delhi: The government introduced the Banking Laws (Amendment) Bill, 2024, in the Lok Sabha on Friday.
The Bill aims to increase the number of nominees per bank account to four from the current one. Reports suggest there is no intention to decrease the government’s stake in public sector banks (PSUs).
The 2021 Budget announced the privatization of two PSU banks, but this appears to have been deferred as the Bill does not include such a provision.
It also proposes a change in the definition of ‘substantial interest’ for directorships, potentially raising the threshold to Rs 2 crore from the decades-old limit of Rs 5 lakh. Finance Minister Nirmala Sitharaman is slated to introduce the Bill in the Lok Sabha later today, as per the revised business list.
The Bill also introduces changes regarding cooperative banks and aims to provide banks with more autonomy in determining the pay for statutory auditors.
Furthermore, it seeks to change the regulatory compliance reporting dates for banks to the 15th and the last day of every month, moving away from the current schedule of the second and fourth Fridays.
Approved by the Union Cabinet last week, the Bill proposes amendments to several acts, including the Reserve Bank of India Act, of 1934, the Banking Regulation Act, of 1949, the State Bank of India Act, of 1955, and both the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980.
This initiative was first mentioned by the Finance Minister in her Budget speech for the fiscal year 2023-24.
