| Why in the news? | Banking Laws (Amendment) Bill, 2024 Set To Introduce in the Lok Sabha | | |
| Key Amendment | Current Rule | Proposed Amendment | Impact |
| 1. Definition of Fortnight for Cash Reserves | Fortnight is defined as the period from Saturday to the second following Friday. | Redefines a fortnight as: 1st-15th day and 16th-last day of each month. | Standardizes the calculation of cash reserves for scheduled and non-scheduled banks. |
| 2. Tenure of Directors of Co-operative Banks | Directors (except chairman/whole-time) cannot hold office for more than 8 consecutive years. | Increases tenure to 10 consecutive years for directors of co-operative banks. | Provides stability in co-operative banks' governance. |
| 3. Prohibition on Common Directors in Co-operative Banks | Prohibits a director from serving on the boards of multiple banks, with exceptions for RBI-appointed directors. | Extends exemption to allow directors of central co-operative banks to serve on state co-operative bank boards. | Enhances coordination and strengthens leadership within co-operative banks. |
| 4. Substantial Interest in a Company | Defines substantial interest as shares worth more than ₹5 lakh or 10% of paid-up capital. | Increases the threshold to ₹2 crore for substantial interest, including family members. | Relaxation of restrictions, benefiting larger investors and corporate entities. |
| 5. Nomination for Deposits and Bank Products | Allows a single nominee for deposits, articles, or lockers. | Allows up to four nominees for deposits and items like articles/lockers (simultaneously or successively). | Facilitates distribution of assets and clarifies rights of multiple nominees. |
| 6. Settlement of Unclaimed Amounts | Unclaimed dividends are transferred to the IEPF after seven years. | Expands scope to include unclaimed shares, interest, or redemption amounts for seven years. | Enables individuals to claim unclaimed funds, promoting financial transparency. |
| 7. Remuneration of Auditors | Remuneration for auditors is decided by RBI in consultation with the government | Banks can independently determine the remuneration for their auditors. | Streamlines the process and reduces bureaucratic involvement in banking audits. |
