Banking Laws (Amendment) Bill 2024
The Finance Minister, Nirmala Sitharaman, emphasized the ongoing "relentless action" against wilful bank defaulters, clarifying that loan write-offs do not equate to waivers, as borrowers remain liable to repay their dues. She stated that banks continue recovery actions on written-off accounts through various methods.
Key Provisions and Amendments
- The Rajya Sabha approved the Banking Laws (Amendment) Bill 2024, which had already been passed by the Lok Sabha.
- The bill seeks to:
- Provide options for depositors to make successive or simultaneous nominations.
- Allow public sector banks (PSBs) to transfer unclaimed shares, interest, and bond redemption amounts to the investor protection fund.
- The bill affects five different acts, making it unique.
- Amendments to the Banking Regulation Act include:
- Sections 45ZA, 45ZC, and 45ZE now allow up to four nominees for deposits, articles in safe custody, and safety lockers, offering greater flexibility and convenience.
- Redefining "substantial interest" for directorships by increasing the threshold from ₹5 lakh to ₹2 crore.
Government Actions and Achievements
- In the past five years, the Directorate of Enforcement has undertaken approximately 912 cases related to bank fraud, including wilful defaults.
- About ₹44,204 crore of proceeds of crime have been attached, seized, or frozen.
- As of December 31, 2024, nine individuals have been declared as Fugitive Economic Offenders, and assets worth ₹749.83 crore have been confiscated.
Performance of Public Sector Banks (PSBs)
- PSBs have significantly improved their performance, recording the highest ever aggregate net profit of ₹1.41 lakh crore in FY24 and ₹1.30 lakh crore up to December 2024.
The Minister highlighted that the government's efforts extend beyond structural reforms, indicating an enhancement in the overall banking sector's health and efficiency.
