The Parliament has passed the Banking Laws (Amendment) Bill, 2024, enabling bank account holders to appoint up to four nominees. The Rajya Sabha (RS) approved the bill on March 26, 2025, after the Lok Sabha cleared it in December 2024. The bill, aimed at simplifying nominee management for financial security, faced criticism from Opposition parties, who demanded deeper scrutiny.
Key Provisions of the Banking Laws (Amendment) Bill 2024
The Banking Laws (Amendment) Bill, 2024 introduces significant changes in nominee rules for bank accounts. Here are the key provisions:
Multiple Nominees:
The bill allows bank account holders to designate up to four nominees.
In case of the account holder’s death, the nominees will be entitled to claim the account proceeds as per the proportions mentioned by the holder.
Simplified Nomination Process:
Account holders can add or modify nominees through a streamlined process, making it easier to update nominee information.
Financial institutions are expected to implement transparent procedures for nominee verification and claims.
Legal Safeguards:
The bill aims to offer legal protection to nominees in the event of disputes, ensuring rightful claims.
Banks will be required to adhere to clear documentation protocols for nominee records.
Opposition’s Concerns and Call for Scrutiny
Despite being passed by both houses, the bill faced strong resistance from the Opposition:
Lack of Proper Scrutiny:
Several Opposition leaders argued that the bill did not undergo adequate parliamentary scrutiny.
They claimed that the government fast-tracked the bill without thorough debate, raising transparency concerns.
Protection of Nominees’ Rights:
Opposition members highlighted the need for stronger safeguards to prevent misuse of the new nominee rules.
Concerns were raised about nominee disputes and potential legal complications in the absence of clear inheritance laws.
Concerns Over Financial Transparency:
Some MPs argued that allowing multiple nominees could complicate inheritance claims and raise transparency issues in banking practices.
Government’s Justification and Response
Union Finance Minister Nirmala Sitharaman defended the bill, stating that it is designed to simplify the nomination process and ensure smoother inheritance claims.
She clarified that allowing multiple nominees will reduce legal disputes in the future by providing account holders the flexibility to distribute proceeds among family members.
Sitharaman assured that the government would frame guidelines for banks to prevent potential misuse and ensure compliance.
Impact on Bank Account Holders
The Banking Laws (Amendment) Bill 2024 is expected to have a significant impact on account holders:
Enhanced Financial Security:
Allowing up to four nominees offers better financial planning options.
It ensures that the account holder’s wealth is distributed according to their wishes, reducing legal hassles for the family.
Reduced Disputes:
By specifying nominee proportions, the bill aims to minimize family disputes over inheritance.
Clear nomination records will help in faster claim settlements.
Simplified Documentation:
The bill mandates banks to maintain clear records of nominees, making it easier for legal heirs to claim proceeds.
Political Reactions and Public Response
The passage of the Banking Laws (Amendment) Bill 2024 has triggered mixed reactions:
BJP-led NDA praised the bill as a progressive reform that will protect the financial interests of account holders.
Opposition parties accused the government of bypassing proper scrutiny and demanded further debate.
Financial experts have welcomed the bill but urged the government to issue detailed guidelines for banks to ensure smooth implementation.
Conclusion
The passage of the Banking Laws (Amendment) Bill 2024 marks a significant reform in India’s financial sector, allowing account holders to appoint multiple nominees. While the bill aims to simplify nominee management and reduce inheritance disputes, the Opposition’s concerns over lack of scrutiny cannot be ignored. Moving forward, the government must ensure transparent implementation and establish clear regulations to prevent misuse.
FAQs: Banking Laws (Amendment) Bill 2024
1. What is the Banking Laws (Amendment) Bill 2024?
The bill allows bank account holders to nominate up to four individuals to claim their deposits after their death.
2. Why is the bill facing Opposition criticism?
Opposition parties claim the bill was passed without proper parliamentary scrutiny, raising concerns about potential legal and financial issues.
3. How will the bill benefit account holders?
The bill ensures better financial security and simplifies the nomination process, reducing inheritance disputes.
4. When was the bill passed?
The Lok Sabha passed the bill in December 2024, and the Rajya Sabha approved it on March 26, 2025.
