Banking Laws Amendment Bill 2024, Key Provisions

Key Provisions of Banking Laws Amendment Bill 2024

Definition of Fortnight for Cash Reserves

Changes the definition of the fortnight for calculating the average daily balance for cash reserves.

• Current Definition: A fortnight is defined as Saturday to the second following Friday (14 days).
• New Definition:
  • From the 1st to the 15th of each month, or
  • From the 16th to the last day of the month.
• Tenure of Directors of Co-operative Banks: Increases the maximum consecutive tenure of a director (except chairman or whole-time director) of a co-operative bank from 8 to 10 years.
• Prohibition on Common Directors in Co-operative Banks: A director of one bank cannot serve on the board of another bank, except for RBI-appointed directors.
  • Amendment: Allows directors of central co-operative banks to also serve on the board of a state co-operative bank where they are a member

Nomination

Currently, a single or joint deposit holder can appoint one nominee.

• Amendment:
  • Allows up to 4 nominees.
  • For Deposits: Nominees can be named simultaneously or successively. In simultaneous nominations, the share is divided proportionally.
  • For Lockers and Articles in Custody: Successive nominations can be made, with priority based on the order of nomination.

Settlement of Unclaimed Amounts

Presently unpaid or unclaimed dividends are transferred to the Investor Education and Protection Fund (IEPF) after 7 years.

• Amendment: Expanded the scope including
  • Shares with unclaimed dividends for 7 consecutive years.
  • Unpaid interest or redemption amounts for bonds for 7 years.
  • Allows claimants to retrieve shares or funds transferred to the IEPF.

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