Key Points
Bill aims to improve bank governance and depositor protection
Eight amendment themes address multiple bank service areas
Parliament's approval marks significant regulation milestone
Union Finance Minister Nirmala Sitharaman on Wednesday moved the Banking Laws (Amendment) Bill 2024 in the Lok Sabha.
Through the bill, the government seeks to improve governance standards and ensure consistency in banks' reporting to the Reserve Bank of India.
The amendments will also ensure better protection for depositors and investors and improve the quality of services in public sector banks.
The proposed amendments seek to increase the tenure of directors other than the chairperson and full-time directors in cooperative banks from eight years to ten years.
Replying on the bill, Finance Minister Sitharaman said that the Banking Law (Amendment) Bill will impact five different acts, making it unique. It is also unique as eight teams worked on amendments, she added.
"This particular Banking Laws (Amendment) Bill will have an impact on five different acts. It is unique in that sense and it is unique that eight different themes of amendments--meaning amendments for one particular thing and amendment for another particularity and so on--are being covered to achieve the purpose, which was taken in the Budget speech, " she said.
Sitharaman outlined the initiatives taken by the Union government and said that as of January 29, 2025, during the last five years, the Directorate of Enforcement has taken up nearly 912 cases related to bank fraud, including those pertaining to wilful default.
In these cases, approximately Rs 44,204 crore of proceeds of crime have been attached/seized/frozen, she added.
As per the Finance Minister, in eight cases, assets amounting to Rs 22,276 crore have been restituted to banks/legitimate claimants/victims of money laundering.
A total of 144 accused persons have been arrested, and 239 prosecution complaints, including 66 Supplementary Prosecution Complaints, have been filed before Special Courts, she added.
FM Sitharaman further said that 23 accused persons have been declared proclaimed offenders and nine have been convicted under PMLA, adding that as on December 31, 2024, nine individuals have been declared as Fugitive Economic Offenders (FEOs), and assets worth Rs 749.83 crore have been confiscated.
She said that 55 crore Jan Dhan accounts have been opened, with 55 per cent held by women.
Praising the initiatives, she added 2023 Global Partnership for Financial Inclusion report says that by leveraging DPIs, India achieved over 80 per cent bank account penetration--a feat that would have otherwise taken 47 years through traditional means.
