The Banking Laws (Amendment) Bill, 2024, which was cleared by the Lok Sabha a couple of days ago, addresses some of the key customer issues such as having multiple nominees for an account. The Banking Regulation Act allows account holders to appoint a nominee, who can access or deposit articles or locker in case of death of the person who nominated him or her. The current amendment allows the appointment of up to four nominees, who are authorised to access the account either successively or simultaneously.
Having a nominee simplifies the process of transferring funds at the time of the account holder's death. However, it is not mandatory for the account holder to appoint a nominee, making customers and bank staff ignore this requirement. According to a report, nearly 70 per cent of demat account holders opted out of nomination because of their being lethargic about filling a simple form.
The current amendment too does not make it mandatory, which allows customers to opt out if the bank policy allows him or her to do it. In such a case, it does not matter whether an account holder is allowed to have one nominee or four nominees.
As on March 31, 2024, unclaimed deposits stood at a whopping Rs 78,213 crores, which grew 24 per cent over the year ago figure of Rs 62,225 crores. One of the main reasons for this accumulation of unclaimed deposits is the lack of nominees. If the government wants to address this issue, it should have made nominations compulsory — perhaps it needs to wait till another round of reforms.
Other reforms include redefinition of fortnight for cash reserves, extension of tenure of directors of co-operative banks and a hike in the limit for substantial interest in a company from Rs 5 lakhs in late 1960s to Rs 2 crores.
