Banking Bill Transforms Nominee Rules and Loan Limits

Parliament has passed the Banking Laws (Amendment) Bill, 2024, allowing bank account holders up to four nominees. The bill redefines 'substantial interest' in banks, raises loan limits, and extends directors' tenure in cooperative banks. It aims to enhance regulatory compliance and improve the banking sector's resilience.

Parliament has given the green light to the Banking Laws (Amendment) Bill, 2024, marking a significant shift in bank account nominee rules. The Rajya Sabha passed the bill via voice vote, following the Lok Sabha's approval.

The legislation permits account holders to appoint up to four nominees, a move that modernizes outdated norms. It also redefines the term 'substantial interest,' raising the limit to Rs 2 crore from Rs 5 lakh, addressing a standard unchanged for nearly sixty years.

Finance Minister Nirmala Sitharaman highlighted the government's dedication to tackling wilful defaulters and improving banking practices. The amendments increase cooperative bank directors' tenure and adjust regulatory reporting requirements, impacting five other acts altogether.

(With inputs from agencies.)