Amendment of Banking Regulation Act to Facilitate Claim Handling and Succession
Banking Regulation Act
Allow up to four nominees from one, ensuring easier claim handling and minimal hassle for legal heirs.
Amendments to be directed toward ensuring continuity and fewer disputes among legal heirs. As of March 2024, unclaimed amounts in banks have touched ₹ 78,000 crore. A streamlined settlement mechanism is needed.
• State Bank of India Act and the Banking Companies Act will be amended to enable transferring unclaimed shares, interest, and bond redemption amounts to the Investor Education and Protection Fund (IEPF).
• Definition of “substantial interest” would be updated with an enhancement in the shareholding threshold from ₹ 5 lakh to ₹ 2 crore.
• The reporting practices for banks would be changed, with the date of reference shifted from “reporting Friday” to the last day of fortnight, month, or quarter.
• Tenure of directors of cooperative banks shall be increased from eight years to 10 years for excluding the chairman and wholetime director.
• Director of a central cooperative bank can sit on the board of state cooperative bank.
• Changes will enable PSBs to offer competitive remuneration to statutory auditors, enhancing audit standards and financial oversight.
