Govt had announced its intent to privatise two PSBs, along with IDBI Bank, but indications are that only stake sale in the financial institution-turned-retail lender will go through.TOI had reported on key provisions on Aug 3 after the cabinet had cleared the proposals. The bill seeks to provide for up to four nominees by a bank account holder and also extends the facility to bank lockers.
Introduced by minister of state for finance Pankaj Chaudhary in the Lok Sabha, the Banking Laws (Amendment) Bill, 2024, has a provision for simultaneous and successive nominations. This means the nomination of the first nominee will be effective upon the death of the deposit or accountholder. The nomination of the second nominee will become effective only on the death of the first, it proposed.
“Where the order of nomination is not mentioned, persons shall be deemed to have been nominated in the order in which their names appear in the nomination,” the bill said. The change in the nomination mechanism is seen to be crucial to ensure that deposits do not go waste as banks are known to make it cumbersome to transfer funds to heirs, resulting in nearly Rs 78,000 crore lying unclaimed with private and state-run players.
The bill also seeks to transfer unclaimed dividends, shares and interest or redemption of bonds to the Investor Education and Protection Fund, allowing individuals to claim transfers or refunds from the fund, thus safeguarding investors’ interests. Another proposed change involves redefining ‘substantial interest’ for directorships, which could increase to Rs 2 crore, instead of the current limit of Rs 5 lakh, which was fixed almost six decades ago.
Congress member Manish Tewari opposed introduction of the bill saying the power to legislate with regard to co-operatives vested with state govts. RSP member N K Premachandran opposed amending five legislations through one bill, while TMC member Saugata Roy termed the bill “superfluous” and said the amendments proposed in the bill could have been done through administrative decisions. Responding to opposition’s remarks, FM Nirmala Sitharaman said the various amendments done in the Banking Regulation Act with respect to cooperative banks were not just one or two but several.
