Banking Laws (Amendment) Bill, 2024

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

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• It amends the:
• • Reserve Bank of India (RBI) Act, 1934
  • Banking Regulation Act, 1949
  • State Bank of India Act, 1955
  • Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970
  • Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980.

Key Changes under Banking Laws (Amendment) Bill, 2024

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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.