Banking Amendment Bill 2024: Major changes ahead for your bank accounts

New Delhi(The Uttam Hindu):The Central Cabinet has already approved the Banking Amendment Bill 2024. Under this new law, amendments are proposed to the Reserve Bank of India Act, 1934, the Banking Regulation Act, 1949, the State Bank of India Act, 1955, and the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980. The government plans to pass this bill in the ongoing winter session of Parliament. Let’s take a detailed look at the changes:

1.Changes to Your Bank Account:

Once the new law is passed, there will be significant changes to your bank account, particularly regarding nominees. Under the new provisions, a bank account holder will be allowed to appoint up to four nominees.

Whenever we open a savings account, invest in mutual funds, purchase property/shares, or opt for life insurance, we are required to appoint a nominee. Now, the government is looking to increase the number of nominees to four. This decision is being driven by the large amount of unclaimed money sitting in banks.

As of March 2024, the government estimates that ₹78,000 crore in unclaimed funds remain with banks, with no one coming forward to claim them. The Ministry of Finance and the government are concerned about this issue, and through the Banking Amendment Bill, they aim to ensure that unclaimed money reaches the rightful heirs.

2.Dividends and Unclaimed Funds:

Through amendments to the State Bank of India Act and the Banking Companies (Acquisition and Transfer of Undertakings) Act, the government aims to allow unclaimed dividends, shares, interest, and matured bonds—if not claimed within seven years—to be transferred to the Investor Education and Protection Fund (IEPF). This will allow investors to claim their funds or refunds from the IEPF, thereby protecting their interests.

3.Changes in Banks:

The new law also includes provisions related to bank directors. According to the amendment, directors of central cooperative banks will now also be allowed to work in state cooperative banks. It’s important to note that cooperative banks are established under the State Cooperative Societies Act and are registered with the Registrar of Cooperative Societies. These banks now come under the regulation of the RBI.

4. New Powers for Banks:

The new law grants government banks the authority to set fees for auditors. This will enable banks to hire top talent at the senior level and enhance the quality of audits within the banks.

5. Reporting Changes for Banks:

Under the new law, banks will also have more flexibility in submitting reports to the RBI. Previously, these reports were required to be submitted every Friday, but now they can be submitted on the 15th day, at the end of the month, or at the end of the quarter. This adjustment will provide banks with more time for reporting.