Banking Laws (Amendment) Bill, 2024

December 5, 2024

GS Paper II Polity

The Lok Sabha passed the Banking Laws (Amendment) Bill, 2024 via a voice vote.

About Investor Education and Protection Fund (IEPF)

Establishment: The IEPF was established under the Companies Act, 1956, as amended by the Companies (Amendment) Act, 1999.

Aim: To promote investor awareness and ensure the protection of investors’ interests.

Administrative Authority: The Investor Education and Protection Fund Authority (IEPFA), operating under the Ministry of Corporate Affairs, is responsible for administering the IEPF.

Enroll now for UPSC Online Course

Key Changes under Banking Laws (Amendment) Bill, 2024

Feature	Earlier Provision	New Provision
Nominees	Up to 2 nominees	Up to 4 nominees, with option for simultaneous or successive distribution
Substantial Interest in Shareholding for Directorship	₹5 lakh	₹2 crore
Tenure of Directors in Co-operative Banks	Maximum 8 years	Maximum 10 years
Common Directors in Co-operative Banks	Not allowed	Allowed for central co-operative bank directors on state co-operative bank boards
Unclaimed Amounts	Unclaimed for 10 years transferred to IEPF	Unclaimed for 7 years transferred to IEPF
Claiming from IEPF	Limited to legal heirs	Individuals can directly claim transfers or refunds
Auditor Remuneration	RBI approval required	Bank’s decision
Definition of Fortnight	1st-15th and 16th-end of month	1st-15th and 16th-end of month (clarified)

Check Out UPSC CSE Books From PW Store

About Nominee

A nominee is a person designated to receive benefits or assets on behalf of another individual. This person is often chosen for convenience, privacy, or legal reasons.
A nominee could be:
- Family Members: Spouses, children, or parents are common choices.
- Trusted Friends: Close friends can be nominated if they’re reliable.
- Legal Entities: Trusts or companies can be nominated.
Common Uses of Nominees
- Financial Accounts: To simplify account management and ensure smooth transfer of assets in case of the account holder’s demise.
- Insurance Policies: To designate a beneficiary who will receive the policy’s proceeds.
- Property Ownership: To hold property on behalf of another, often for tax or privacy reasons.
- Company Directorships: To appoint a person to represent the company’s interests.
Legal Implications: Nominee agreements should be clear and legally binding.
Tax Considerations: Nominating a foreign entity might have tax implications.
Privacy Concerns: While nominees can provide privacy, it’s essential to balance this with transparency.
Regulatory Compliance: Nominee arrangements must comply with relevant laws and regulations.
Legal Provisions for Nominees in India: Indian Contract Act, 1872 governs the legal relationship between the account holder and the nominee.
- Various other acts, such as the Banking Regulation Act, Insurance Act, and Companies Act, also contain provisions related to nominations.

Also Read
UPSC Daily Editorials	UPSC Daily Current Affairs
Daily Current Affairs Quiz	Daily Main Answer Writing
Check Out Previous Years Papers From PW Store	UPSC Test Series
Check Out UPSC NCERT Textbooks From PW Store	Check Out UPSC Modules From PW Store