Up to 4 nominees for bank accounts proposed as part of banking law tweaks

The proposed bill allows a bank account holder to have up to four nominees. This includes provisions for simultaneous and successive nominations, offering greater flexibility and convenience for depositors and their legal heirs, especially concerning deposits, articles in safe custody, and safety lockers, sources said.

It also seeks to enable the transfer of unclaimed dividends, shares, and interest or redemption of bonds to the Investor Education and Protection Fund (IEPF), allowing individuals to claim transfers or refunds from the fund, thus safeguarding investors’ interests.

The bill has proposed to extend the tenure of directors (excluding the chairman and whole-time directors) in cooperative banks from 8 years to 10 years.

The bill has proposed to allow a director of a central cooperative bank to serve on the board of a state cooperative bank.

It also seeks to improve audit quality in public sector banks and provide consistency in reporting by banks to the RBI.

As per the proposed bill, the banking sector has evolved over the years and with a view to improve bank governance and investor protection, it has become necessary to make certain amendments to the Reserve Bank of India Act, 1934, the Banking Regulation Act, 1949, the State Bank of India Act, 1970, and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980.