Banking Laws (Amendment) Bill 2024 introduced in Lok Sabha: What’s new in law? Key points

With an aim to make significant changes to key banking regulations, Union Finance Minister Nirmala Sitharaman introduced the Banking Laws (Amendment) Bill, 2024 in the Lok Sabha during the Parliament session on Friday.

Banking Laws Bill 2024: What are key changes? 

1) The bill aims to increase the option for nominees per bank account to four from the existing one, among others. 

2) Another amendment involves redefining 'substantial interest' for directorships, potentially raising the threshold from the current ₹5 lakh, set nearly 60 years ago, to ₹2 crore.

3) In addition, the Bill aims to give banks more flexibility in determining the pay for statutory auditors.

4) It also proposes changing the regulatory reporting dates for banks to the 15th and last day of each month, replacing the current second and fourth Fridays.

5) Approved by the Union Cabinet last Friday, the Bill seeks to amend several laws, including 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.

Finance Bill 2024

On Wednesday, the Lok Sabha cleared the tax proposals presented in the union budget for FY25 along with amendments proposed by FM Sitharaman, including the restoration of inflation adjustment benefit in taxing gains from property sales.

She said that amendments are brought to the Finance Bill as the National Democratic Alliance (NDA) government follows the practice of broad-based consultation across the country after presenting the union budget so that the budget reflects the common man's aspirations.

The minister proposed in her reply to the discussion on the Finance Bill in the House that when long term capital asset of land or building acquired before 23 July is sold, tax payers can compute the applicable tax on capital gains under the new scheme at 12.5% without indexation as well as under the old scheme at 20% with indexation and can pay the tax which is lower of the two.