The key provisions of the Act on Banking Acts (amendments), 2025, including a higher Prague for a substantial interest, will enter into force on 1 August, the Ministry of Finance said.
The aim of the amended legislation is to strengthen the administration of banks, to protect depositors and investors, improve audits in the public sector banks and increase the function of directors (except chairmen and directors to the time) in cooperative banks.
Act on Banking Acts (amendment), 2025 was announced on 15 April 2025, contained a total of 19 changes within five legal regulations – the Reserve Bank Act in India in 1934, the Banking Regulation Act, 1949, the National Bank in India, 1955 and Bank Company (acquisitions and transmission), 1970 and 1980.
The central government announced 1st August 2025 as the date on which the provisions of certain sections would come into force.
Some of them include the implementation of an improved threshold for cooperatives in cooperative banks. The amendment redefined the “substantial interest” for the headquarters that increased to £2 crore instead of the current limit £5 Lakh, which was set almost six decades ago.
These provisions in the Act further balance the possession of the director in cooperative banks with the 97th institutional change by increasing maximum tenure from 8 years to 10 years (except for the chairman and director for the whole time).
Transfer permit
PSBS will now also be allowed to transfer junk shares, interest and redemption of bonds to the Fund for Education and Protection of Investors (IEPF), thus bringing them to the practices followed by companies under the Company Act. Changes also seize PSB to offer reward to statutory auditors, facilitate the involvement of high -quality audits and strengthen standards of audit standards.
The implementation of these provisions means a significant step to strengthen the legal, regulatory and administrative framework of the Indian banking sector, the statement of the Ministry of Finance said.
The proposed changes in banking laws also revise the data of reporting reports on the submission of legal messages by banks to India Reserve Bank to show every Friday by the last day, month or quarter.
The Minister of Finance made a notice of the amendment to the Banking Regulation in the budgeting speech 2023-24. In fact, the bill was first introduced on August 9, 2024, but could not be admitted for discussion and passage. Lok Sabha cleaned the bill in December 2024, while Rajya Sabha approved it with several amendments made by March 26. Lok Sabha then approved it in April and changed the law into the law.
(Tagstotranslate) Banking Acts (T) 2025
