Banking Laws (Amendment) Bill, 2024 — All You need to know
Related to consumers:
The Bill allows bank account holders to have up to four nominees in their accounts
Depositors will have the option of successive or simultaneous nomination facility, while locker holders will have only successive nomination.
Related to Banks:
Proposes changes related to redefining “substantial interest” for directorships, which could increase to ₹2 crore instead of the current limit of ₹5 lakh.
It proposes to increase the tenure of directors (excluding the chairman and whole-time director) in cooperative banks from eight years to 10 years, so as to align with the Constitution (Ninety-Seventh Amendment) Act, 2011.
Once passed, the Bill would allow a director of a Central Cooperative Bank to serve on the board of a State Cooperative Bank.
The Bill also seeks to give greater freedom to banks in deciding the remuneration to be paid to statutory auditors.
It also seeks to redefine the reporting dates for banks for regulatory compliance to the 15th and last day of every month instead of the second and fourth Fridays.
“The proposed amendments will strengthen governance in the banking sector and enhance customer convenience with respect to nomination and protection of investors.
97th Amendment of Constitution
The 97th amendment of the Indian Constitution gave special constitutional status and protection to all the cooperative societies prevailing in India.
It established the right to organise cooperative organisations as a basic right (Article 19).
It includes a new State Policy Directive Principle on promoting Cooperative Societies (Article 43B).
It inserted a new Section IX-B to the constitution, named “The Cooperative Societies” (Article 243-ZH to 243-ZT).