Major Overhaul in Banking Laws: Enhanced Governance & Protections
The Banking Laws (Amendment) Act, 2025 introduces significant changes for public sector banks, enhancing investor protection, auditor remuneration, and aligning governance with the Companies Act. Key updates include raising the 'substantial interest' threshold and increasing cooperative bank directors' tenures, marking a crucial step for India's banking sector reform.
- Country:
- India
The Indian government has announced amendments to the Banking Laws (Amendment) Act, 2025, which now permits public sector banks to move unclaimed shares, interest, and bond redemption money to the Investor Education and Protection Fund, in accordance with the Companies Act.
These amendments also allow public sector banks to offer competitive salaries to statutory auditors, a move designed to attract top-tier audit professionals and enhance auditing standards overall, as per a recent Finance Ministry release.
Significant revisions include elevating the 'substantial interest' threshold from Rs 5 lakh to Rs 2 crore, the first such update since 1968. The notification further extends director tenures in cooperative banks in line with the 97th Constitutional Amendment, emphasizing improved governance within India's banking framework.
(With inputs from agencies.)
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