A new bill proposed in Parliament has a provision that says the deposit and locker holders You may nominate up to four candidates instead of one.
The bill containing this provision is Bill to reform banking legislation which was tabled in the Lok Sabha on Friday.
The bill also contains provisions on new reporting dates, among other things.
The Banking Laws Amendment Bill “seeks to improve governance standards, provide consistency in banks’ reporting to the RBI, ensure better protection for depositors and investors, improve audit quality in public sector banks and extend the tenure of directors (except the chairman and whole-time director) in cooperative banks,” a government source said. reported Hindu Line of business.
It is interesting to note that the Bill seeks to amend a number of laws such as the Reserve Bank of India Act, 1934, the Banking Regulation Act, 1949, the State Bank of India Act, 1955, the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980.
The Bill proposes changes to the Banking Regulation Act to facilitate the existence of a large number of nominees for the payment of depositors’ money, the release of the contents of safe deposit boxes and the return of items held in safe custody at banks.
Two options
The change of nominators will have some conditions. There will be two options to choose four nominees. The main holder(s) must give priority to all four or mention the share of each nominee. If the depositor chooses priority, the nomination will be effective only in favor of one person in the order of priority.
This means that the nomination of the first nominee will be effective if he or she survives the person(s) who made the nomination.
Following the death of the first, second or third person, the appointment of the next person will become effective. The priority mechanism for nominations made in the case of lockers and safe deposit boxes will also be enabled.
What are unclaimed deposits?
Balances in savings or current accounts that are not operated for 10 years or time deposits unclaimed for 10 years from the maturity date are classified as ‘unclaimed deposits‘.
There could be multiple reasons for this, such as the death of the main incumbent followed by no nominations.
Accordingly, banks transfer these amounts to the Depositors Education and Awareness Fund maintained by the RBI.
One of the main reasons for maintaining a large number of nominees for depositors’ money is to reduce unclaimed deposits in banks.
Unclaimed deposits in public and private sector banks combined exceeded ₹42,000 crore of around ₹33,000 crore a year ago, data as of March 31, 2023, shows.
In the meantime, it is vital to note that depositors have the right to reclaim deposits at a later date from the bank or banks where such deposits were held along with interest, as applicable.
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