Lok Sabha on 3rd December 2024 debate the Banking Laws (Amendment) Bill, 2024, spearhead by Union Finance Minister Nirmala Sitharaman, as per report. FM propose the bill in Parliament on 3rd December 2024 and was approve for presentation by a voice vote.
Finance minister said that since 2014, the government and the Reserve Bank of India (RBI) have been “extremely cautious” so that banks remain stable.
Nirmala Sitharaman Said :
“The intention is to keep our banks safe, stable, and healthy, and after 10 years, you are seeing the outcome,”.
During the debate on the bill, it face criticism from the opposition for being a “step towards privatisation”, as per report.
About Banking Laws (Amendment) Bill, 2024
- The propose amendment allows bank account holders to have up to four nominees in their accounts.
- It also redefines the ‘substantial interest’ limit for directorships, increasing the cap from Rs. 5 lakh to Rs. 2 crore. The current limit was fix almost 6 decades ago.
- As per Nirmala Sitharaman, this amendment gives depositors the option of successive or simultaneous nomination facility, while locker holders will have only successive nominations.
- It proposes increasing the tenure of directors (excluding the chairman and whole-time director) in cooperative banks from 8 years to 10 years to align with the Constitution (Ninety-Seventh Amendment) Act, 2011.
- It also proposes allowing a director of a Central Cooperative Bank to serve on the board of a State Cooperative Bank.
- It seeks to give greater freedom to banks in deciding the remuneration to be paid to statutory auditors.
- It 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.
Moving the bill for consideration and passing, Nirmala Sitharaman said that it would “strengthen governance in the banking sector and enhance customer convenience with respect to nomination and protection of investors”, but opposition MPs were not happy.
Among the vocal critical comments came from TMC MP Kalyan Banerjee, who describe the amendment as a “donkey passage towards privatisation of the Indian banking sector.”
Kalyan Banerjee also raise concerns over cybersecurity, the need for robust IT and fraud detection systems, and “strict adherence to data privacy regulations.”
Kalyan Banerjee said :
“While the bill ostensibly seeks to improve bank guarantees and investor protection, its real intent is to reduce the government’s minimum holding in public sector banks from 51 to 26 per cent,”.
His concerns about cybersecurity were echoe by Congress MP Karti Chidambaram, who demand a government response on what measures are being taken to tackle rising cyber frauds.
Karti Chidambaram also raise the issue of the “tyranny of KYC”, saying that it should be stop as multiple calls as people receive multiple calls from banks for KYC updating annually, despite no change in details.
Karti Chidambaram said :
“In order to make life easier for the customer, they must simplify and mandate that if there is no change (in KYC), there is no reason to update your KYC multiple times in a year,”.
